- •Introduction
- •Terms of reference
- •Prioritization
- •3.1 Top priority – Proposal to expand into corporate advertising videos
- •3.2 Second priority - Fee negotiation for new children’s programme
- •3.3 Third priority – Re-commissioned drama series
- •3.4 Fourth priority – “Banks – friend or foe?” – a new documentary by vyp
- •4.0 Discussion
- •4.1 Proposal to expand into corporate advertising videos
- •Variant 1
- •Variant 2
- •Variant 3
- •1.Sutability of the market
- •2. Acceptability
- •3. Feasibility
- •4.2 Fee negotiation for new children’s programme
- •4.4 “Banks – friends or foe?”
- •5. 0 Ethical issues and recommendations on ethical issues
- •Recommendations
- •6.1 Proposal to expand into corporate advertising videos
- •6.1.1 Recommendations
- •1) Short-term recommendations
- •2) Long – term recommendations
- •6.1.2 Justification
- •6.1.3 Actions to be taken
- •6.2 Fee negotiation for new children’s programme
- •6.2.1 Recommendations
- •1) Short-term recommendations
- •2) Long-term recommendations
- •6.2.2 Justification
- •1) Short-term recommendations
- •2) Long-term recommendations
- •6.2.3 Actions to be taken
- •6.3.1 Recommendation
- •6.3.2 Justification
- •6.3.3 Actions to be taken
- •6.4.1 Recommendation
- •6.4.2 Justification
- •6.4.3 Actions to be taken
- •Conclusion
- •Appendices
- •Appendix 3. Porter 5 forces analysis. Independent tv production industry
- •Bargain power of customers: High
- •4. Threat of substitute products: Medium
- •If programme ideas are innovative, then there is no threat
- •5. Intensity of competitive rivalry: High
- •Appendix 4.The market growth potential - pest analysis
- •Appendix 5. Industrial and financial analysis.
- •Appendix 6. Profit and Margin for 3 variants of actor’s salary. Номер!!!)
- •Appendix 7.
3.4 Fourth priority – “Banks – friend or foe?” – a new documentary by vyp
Notwithstanding the urgency of the issue this has been placed as fourth priority due to its practical content and a comparably small sum of money in question. This problem deals with operational issues and emphasizes the lack of cost control and of thorough planning, but it doesn’t have a strategic aspect and is less serious than other problems.
4.0 Discussion
4.1 Proposal to expand into corporate advertising videos
Steve Voddil’s friend has approached to him with an idea for VYP to produce advertising video of Coffee Shops, which will be shown on local independent TV. It has also been suggested that more modern channels might be appropriate.
This is considered to be the top priority as it is a new global market, on which the company may have the profit and that is the main aim of the company.
TV industry is changing and innovative, so to keep audience the company should follow the new trends and penetrate a new a market or improve efficiency of the production.
This issue is considered to be a strategic proposal as company wants to penetrate into a new market of corporate advertising.
In preliminary data of cost and revenue of Steve Voddil, it is mentioned that for every £1 spent on studio hire the film crew will cost £1.2 then we consider that the film crew will cost £6,000 for one programme. It is essential for the company to make high-quality advertising videos to attract customers. As for actors we have taken into consideration 3 variants (Appendix 6)
Variant 1
If the actors cost £2,800 then operating profit margin will amount to 2.9%. Taking into account the assumption that 15% of the costs might be saved for subsequent attempts then the profit margin will be 17.5%. Though the margin for the second video might be high, there is a risk that the video will be inferior in quality to those videos made by special advertising agencies, as less qualified actors are hired.
Variant 2
If the actors cost £4,800 then operating profit margin for the initial video will be -8.8%, and 7.5% for the subsequent video. This variant will not be worthwhile, as the company will bear losses for the initial video, and margin for the second video will be relatively low. But there is a chance that the video will be effective, as qualified actors take part in the advertising, so VYP may demand higher revenue from the company which request video.
Variant 3
If the actors cost £4,000 then operating profit margin for the initial video will be -2.9%, for subsequent videos the margin will be 11.5% . The margin for the second video will be adequate enough in comparison with margin for making documentaries and drama series. As the actors are qualified and the margin is reasonable enough we recommend the company to produce a corporate advertising video in the long-term period.
As this is strategic proposal we should asses the following:
1.Sutability of the market
The level of competition among companies producing corporate advertising video is high in UK. Companies which are specializing in advertising production have lower costs than VYP, so this market is not appropriate enough for VYP in short-term.