Case ID: E330A
Solution ID: 14777

Focus Media A Building a Chinese Media Giant Case Solution

Case Solution

In 2003, Focus Media developed digital outside marketing in China, placing LCD shows in locations in primary commercial structures which had high traffic and waiting occasions, for example lobbies and elevator waiting areas. The organization leased space from building proprietors, and offered advertising, running 12 minute loops with 30 second ads. This provided marketers having a specific means to access middle and earnings customers, and was much more effective than conventional television advertising. Only specific customers saw the advertisements, as low-earnings people didn't arrived at these structures, and customers preferred watching advertisements when they anxiously waited compared to getting absolutely nothing to do (as opposed to television advertisements, that they felt to become a nuisance). When a company was established within this market, possessing most building contracts, it had been hard to dislodge. Focus Media invested heavily to rapidly to achieve charge of the forex market. It had been soon lucrative, and purchased others in related companies. Focus Media went public on Nasdaq in 2005, and started obtaining other advertising companies. By 2007, it had revenues in excess of $500 million, greater than $250 million in cash, an industry capital of $6.5 billion, and was incorporated within the Nasdaq 100 non-financial firms. Considering this rapid, effective growth, the organization looked towards the future with optimism. There have been suggestions it might acquire SINA, the key Chinese Internet portal. Expansion with other nations seemed to be possible. Considering this success, the case asks students to think about how the organization should best proceed.

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