The Growth Of China Local Advertising Agencies

This essay particularly examines the growth of local advertising agency (LAA).It analyzes the current positions of LAAs and summarizes the confronted problems into external and internal categories.Then Michael Porter's Five Forces model is adopted to highlight competitions from buyers, suppliers, substitutes, potential entrants and competitors. The industry structure that China's LAAs have to live with is also examined. Because the most powerful rivalries are still international ad agencies, so from perspectives on a few specific levels of operation, a thorough comparison on the strengths and weaknesses of both parties are made. Finally it concludes that there are still spaces for LAAs to growth into market giants if they can take advantages of market dynamics and be persistent.Based on these findings, it argues that LAAs have four strategic options to take: 1) Be innovative and self-affirmative to consolidate competence; 2) Concentrate on specific industries or a focused area; 3) Multiple funding to facilitate sophisticated growth; 4) Strategically partnership with advertisers.After twenty years' development, a few very competitive LAAs have come out of surface despite the fact that each has a unique story to tell. Undoubtedly, their successes are very useful for those that are not so successful. Therefore in the end the author summarizes a few growth models in the hope that this may help LAAs in China to accelerate their development.