Citrus 2012 Case Report

CIMA Global Business Challenge 2012 CIMA 2012
Report for VYP

This report is prepared by Team Citrus From Zhejiang University
Siyun Wu
wusiyun614@gmail.com
Donglei Ma cornelia339@gmail.com Wenwen Bi zd.biww@gmail.com Yanxin He yyxxhhzz@gmail.com
Content
1 2 3 4 5 6 7 Introduction Terms of reference Identification and prioritization of issues Discussion of issues Ethical issues Recommendations Conclusions
Appendix
1 2 3 4 5 6 7 SWOT analysis Porters Five Forces Analysis PEST Analysis Prioritization Chart Financial analysis of corporate advertising videos The Changing Face of Corporate Video Industry in UK The Breakeven Sales of Merchandising Sales
CIMA (Chartered Institute of Management Accountants) T. 400 820 4080 E. gbc.china@cimaglobal.com Web. http://gbc.cncima.com
1 Introduction
Established in 2003, V and Y Productions (VYP) is an independent TV production company based in UK. VYP's competitive products and good brand reputation has placed it within the top 20 companies making TV programs in UK, with a reasonable market share 1.4%. However, due to the current economic environment's affection, an obvious reduction in commissioned and re-commissioned revenues for independent TV production companies has exerted a severe impact on VYP's profitability. In order to realize its aim of making successful programmes profitably, VYP needs to evaluate different proposals on new business and to conduct necessary improvement in existing business.
2 Terms of reference
This report is to show the results of our analyses, to provide several solutions to the problems the company is facing and to give assessments on the proposals presented in the scenario.
3 Identification and prioritization of issues

In order to achieve a long and prosperous business, VYP has always kept two values in mind: Reputation, which represents programme quality, brand recognition and corporate social responsibility, and Financial performance, which represents profitability, liquidity and risk profile of its assets. When dealing with these issues, Urgency is also an important consideration. Consequently, we have prioritized the problems and proposals of VYP according to their Reputation, Financial performance and Urgency. Issue Reputation w1 1 2 3 4 5 2 4 3 4 5 0.4 Financial 3 5 5 2 1 0.4 w2 Urgency 3 2 3 4 5 0.2 w3 Credit 2.6 4 3.8 3.2 3.4 Priority 5 1 2 4 3
Priority 1 Expand into Corporate Advertising Videos

An old friend at Zubinos Coffee Shops Ltd has approached Steve Voddil with a request to produce a corporate advertising video, which will be shown on local independent TV and other modern media channels. Steve thinks that corporate advertising video could be an exciting development exposing VYP to a new market for its services.
Priority 2 Fee Negotiation for New Childrens Programme

Following the success of a pilot programme, BBC is considering proceed with the first series of VYPs children programme Sammy Squirrel. The negotiation is going very well except for the ownership of merchandising rights. Given the comparatively high margin on the sales of puppets and other items based on Sammy Squirrel, VYP is considering whether to accept a lower fee in return for the right to sell the merchandise itself.
Priority 3 Accident at Studio

Recently a studio was urgently needed due to poor planning. VYP had the set builders work over night with few breaks in the day before filming began. During the building, one of the builders fell off a gantry and broke his arm as a result of tiredness and lack of concentrating. This is not merely an accident, however, as VYP seldom takes seriously its anti-social hours behaviour and even intentionally overuses the cheap labour.
Priority 4 Banks friend or foe? A new documentary of VYP

Currently, VYP is producing a documentary which attempts to explain the cause of the financial crisis in 2008. However, this documentary is now forecasted to make a loss due to the inaccurate anticipation and the poor cost control.
Priority 5 Re-commissioned Drama Series

Following the successful launch of a drama series, BBC offered to re-commission a second series of the rowing show. Re-commission is beneficial to VYP both on revenue and reputation. However, VYP finds that, the 10% reduction in the price squeezed its profit. In addition, one of the original rowers, John Strong is already contracted for the next 10 months.
4 Discussion of issues
VYP is operating in a highly competitive industry: TV programme producing. In order to achieve better understanding about VYP and its competitive environment, we made SWOT analysis, Porters Five Forces Analysis and PEST Analysis (shown in Appendix 1, 2 and 3, respectively), whose conclusions are the foundation of our discussion in this report.
4.1 Expand into corporate advertising videos

4.1.1 Suitability Growing market of corporate video The market for corporate videos is huge and expanding, with video types growing from less than 10 to more than 50. NewsMarket, the leading web-based video marketing and delivery platform, reported a 41% increase in corporate video on its site in 2007, while the number of clips ordered soared by 70% to more than 400,000. Customers trend Many companies take the trend to make corporate videos. BBC NEW BUSINESS showed clear data indicating that video drives higher sales. There is a conversion lift in the double digit percentages, and for some it translates into a 100% lift. Moreover, an official website with corporate video will rank higher in Google rankings and keep customers on their websites for longer period. A corporate video represents an efficient marketing technique only when it is brilliantly produced with best quality. Therefore, companies tend to hire a professional corporate video production company to make their advertising videos. Competitors situation
Therere several existing corporate video competitive companies such as Creationvideo, Tech-TV, and Harlequinproductions. Nowadays, the traditional video production companies are getting squeezed from both ends. They are seeing tremendous price pressure and are not able to sustain the same high rates that used to comfortably pay their overhead. Big studios, lots of expensive equipment, layers of manageme nt and admin are all luxuries that few production companies can afford today. 4.1.2 Acceptability According to our market research, it is reasonable for VYP get the contract of following 2 subsequent video. We make three different assumptions to simulate neutral, optimistic and pessimistic situations of the actual cost. Under these three assumptions, the total margin for 3 videos would be 5,467, 8,554 and 3,409 respectively (see Appendix 5). Since nowadays corporate videos use less actors and more real people saying real things (shown in Appendix 6), neutral and optimistic situations can be more plausible in this case. Therefore, this proposal is acceptable as long as more than one subsequent video is commissioned. 4.1.3 Feasibility Rich experience in video production and directors reputation accommodate VYP for the corporate advertising video market. However, VYP still have to bear in mind the differences between broadcasted programmes and corporate videos. Unlike TV programmes, corporate videos need detailed pre-production communication with the client company. Moreover, although corporate videos also need script, shoot and edit, the details and requirements can be very different from TV programmes. To smooth this change of strategy, we suggest VYP hire a producer with experience in corporate video
company or advertising design company.
4.2 Fee negotiation for new childrens programmes

4.2.1 Suitability Audience, especially children, would always hope to get further access to the cartoons or TV series they watch. As a result, related merchandise, especially toys, are extremely welcomed. Given the comparatively high margin, producers and broadcasters are all interested in the revenue brought by merchandise. One of the most successful examples of merchandise selling would be the puppets of Teletubbies. Teletubbies is a famous childrens television series created by Ragdoll Productions. The series was first aired on BBC on 31 March 1997, and was syndicated in the United States on PBS on 6 April 1998. Teletubbies received much attention shortly after its first show, both for its contents and for the related products. By 1999, Teletubbies were already the hottest selling toys in Britain; meanwhile, the American toy industry watchers predict that Teletubbies merchandise could generate up to $2 billion worth of sales within a year. Another similar case is the animation Pleasant Goat and Big Big Wolf in China. The intellectual property right of this animation is operated by Cartoon Express Co., which generates 85,000,000 RMB by manufacturing, distributing merchandise and leasing the Pleasant Goat and Big Big Wolf brand. The company is recently acquired by Imagi International Holdings Limited at a price of $1b RMB. The acquisition indicates a positive forecast on the merchandise market. 4.2.2 Acceptability In order to be equally profitable, the breakeven sales should be 22,050,000. (see
Appendix 7) According to our research, the first year merchandise sales of Sammy Squirrel is comparable to the sales of Teletubbies in 1997 in the UK. The report of BBC Worldwide shows that Teletubby generated more than 125m in 1997. Taking the inflation rate, which is 47.80% from 1997 to march of 2012, into consideration, we predict that the merchandise sales of Sammy Squirrel would be 185m, largely surpassing the breakeven sales. The result indicates that accepting a lower fee to get the intellectual property right is very profitable. However, the merchandising business also embodies certain risks. First, the merchandised sales would be very unpredictable. The merchandised sales is largely dependent on the popularity of Sammy Squirrels. However, VYP has no control over the broadcasters re-commission behavior, audiences taste or media exposure. Should there be any changes in these aspects, the merchandised sales is very likely to collapse, and if VYP has already ordered a large amount of products, it would burden a high possibility of loss. On the other hand, cost control is also a problem that VYP would face. Although outsourced, VYP still has to invest in design, manufacturing, sales & marketing and distribution. Lacking of experience, VYP might encounter unexpected costs that would affect its profitability.
4.3 Accident at studio

Poor planning, as one of the major causes of this accident, is the responsibility of the programme producers. Their team uses the IT system and the spreadsheet to do the planning work. Apparently, this problem can be solved by improving the IT system and training the staffs to make better planning.
Now, VYPs anti-social hours behaviours are remained to be discussed. Admittedly, the wages for set builders are cheap, but long working hours don't necessarily translate into increased productivity. Recent Europe-wide research conducted by Eurostat has demonstrated that those countries where workers put in the most hours don't necessarily top the league when it comes to being productive at work. Research in the UK has shown that a long-hours culture can in fact often be counter-productive in terms of worker productivity. Long working hours is also detrimental to work-life balance, health and safety. This problem is related to the VYPs corporate social responsibility and we will further discuss it in the ethical issue.
4.4 Banks friend or foe? A new documentary of VYP

4.4.1 Cost control expedient In the short run, this problem could only be solved by cutting the cost since there is no room to renegotiate the commission fee. The cost over-run is caused by the investigation which took longer than anticipated and the repeated interviews which are required for further clarification on a large number of inconsistencies in the evidence gathered. In order to achieve a breakeven position, the programme producer raised two possible solutions: 1. No more interviews, VYP must reduce the programme based on evidence it has to date; 2. Expensive computer graphics interface (CGI) usage will be cut back.
Otherwise, if more interviews as needed are included and CGI is made full use, an extra cost would be as much as 32,000+30,000=62,000. Besides, there are several other ways to cut the cost to avoid further loss. 1. If the programme is recorded outside the TV studio, the broadcast quality VT would be used, as well as the VT crews. All of these would lead to a higher cost so VYP should reduce the use of outside filming. 2. If the programme involves the use of actors or famous personalities, the fees will affect the overall costs considerably, so VYP should try to avoid these fees. 4.4.2 Long-term improvement Both the inaccurate anticipation and the poor cost control greatly influence VYPs profitability and its reputation. Considering that VYPs aim is to make successful programmes for profit, it is of great importance for VYP to improve its ability to forecast the cost for completion of programme and to make the programme come to fruition within budget. As mentioned above, the IT system is crucial to planning. Besides, the programme producers, who are responsible for the programme budget, use a database system for the submission of the forecast cost. The financial department then uses this data to prepare financial forecast for each commission programme. Moreover, the finance team works closely with the production team for each programme to closely monitor and control costs against the agreed programme budget. Obviously, the program producer and the financial department are responsible for the anticipation and the cost control and their most efficient tools are database and
spreadsheet. To improve their performance, two measures should be taken: firstly, more effort should be devoted to optimizing VYPs IT system and its database; secondly, both the production team and the financial team should be given more training and instructions on how to enhance the teams working ability. Besides, VYP could also introduce the production team some performance related bonus to stimulate their motivation in cost control. Moreover, as an independent TV production company, VYP has not fully equipped itself to make TV programmes at its own premises and does not own any studios or employ any videotape crews for VT filming. As a result, VYP has to hire studios and outsource videotape crews. Actually, the company is now generating reasonable profit and strong cash flows and during 2010 the VYP board even declared a dividend of 0.9 million. Apparently, VYP currently has the ability to equip itself its own premises. Even though, these investments may incur a considerable expenditure, in the long run, further costs could be saved. Even if VYP need to keep certain liquidity and cannot afford purchasing such equipment, it may consider financial lease. It is worth noting that VYP has seen its average operating profit margin on commissioned revenue fall from 10.1% in the year ended 30 September 2010 to 9.4% in the year ended 30 September 2011. This reduction is mainly due to the reduced commission revenues that the commercial TV broadcast companies are prepared to pay. A better cost control may alleviate this profit margin reduction.
4.5 Re-commissioned drama series

In order to make more profit from the re-commission programs, VYP should both negotiate with BBC on the re-commission fee and pay attention on the cost control. The
re-commissioned programmes are usually priced lower because of the savings such as the built studio sets, the ready research and ideas and the experience from previous series. In the case of the rowing show, however, the above savings are not all applicable. As a drama series that reflect the training and preparation of a rowing team, the programme has to take a lot of outdoor scenes and the shooting scene may have to take place in the city where the world championships would be held. As a result, the studio setting fee is very unpredictable and may cost even more than the previous series. In addition, the preparing processes for competitions are very similar to one another; to attract more viewers, VYP has to do more research and write more attracting stories. In a word, the case is very different from other re-commissioned programmes, and to guarantee the quality of the drama series, VYP should re-settle the price with BBC. On the other hand, VYP should also well apply its experiences gained from the previous drama, make good planning and save its costs to the greatest extend. In regard of the problem of actors, a flexible arrangement and good negotiation would be needed. John Strong has signed a 10-month contract while the drama series will take 4 months to plan and shoot, and will be broadcasted after 12 months. The best arrangement would involve only two months overlapping, and the arrangement is shown in the following graph:
John Strongs 10 month 4 month plan and shoot
Apr
March 31st 2012
Dec
Feb
April 1st 2013
As a result, VYP should make good planning, negotiate with John Strong and GGG in advance and try to shoot as many Johns parts as it could in February and March.
5 Ethical issues
5.1 Employees
Now VYP is condemned for its anti-social hours behaviours. The Working Time Regulations (1998) govern the hours anyone can work. They determine the maximum weekly working time, a limit of an average 48 hours a week on the hours a worker can be required to work. Violating the regulations may both incur unnecessary penalty and harm VYPs social image. Moreover, long working hours is detrimental to employees work-life balance, health and safety, thus negatively influencing the efficiency. VYP must take timely measures to avoid this problem and improve its employer-employee relationship.
5.2 High-quality TV Program

Some broadcast companies have countered that the viewing public will not necessarily notice the difference in program quality. However, as a responsible TV production company, VYP cannot be opportunistic. VYP must stick on strict standards of program quality to improve viewers experience and more importantly, to show the truth to the world.
5.3 Charity and Public-benefits Programmes

Under the motion of Steve, the VYP has donated 128,000 during the last financial year. VYP has also made documentaries concerning natural disasters and plight of child labour around the world. To further enhance its charitable activities, VYP could utilize the platform of telecasting. For instance, VYP can consider producing a programme for
people to seek for their relatives lost in disasters, making corporate video for charity organizations, or offering discount to NGOs who advertise on ethic issues.
5.4 Development of the Youth

VYP has been working on providing positions for young people to gain training or an insight into how TV programmes are made. VYP has a scheme allowing school children access to view VT filming of certain programmes several times each year. The scheme costs VYP around 24,000 each year in total. The penetration of corporate video requires new staff with design and advertising background, so VYP could offer some full-time junior positions to the graduates they have paid attention to.
6 Recommendations
6.1 Expand into Corporate Advertising Videos
VYP should take trend to penetrate the market of corporate video. In order to survive in this market, VYP should make efforts to initiate production meeting with clients and hire experienced corporate advertising staff.
6.2 Fee Negotiation for New Childrens Programme

We suggest that VYP accept a lower fee to make use of the high margin of merchandised sales. In regard of the potential risks, we also suggest that VYP consider leasing the merchandise rights.
6.3 Accident at Studio

At the moment, VYP should immediately take actions to respond to the set-builders injury. In the long run, the IT system should be improved and VYP should offer more training projects to the program production team. VYP should also convert its perspective on the balance between its interest in profit and its care about the employees.
6.4 Banks friend or foe? A new documentary of VYP

At present, VYP should try to cut cost in every possible way that does not affect the quality of the programme. Besides the two proposals raised in the scenario, VYP could also reduce the use of outside filming and the use of famous actors. In the long run, VYP should improve its IT system and enhance the employees
performance by offering training project and performance related bonus. VYP should also equip itself with studios and hire VT crew to save cost in the future.
6.5 Re-commissioned Drama Series

For the relatively low margin of the re-commissioned programme, VYP should negotiate with BBC on the re-commission fee and execute more strict cost control. For the actors contracts issue, VYP should make good planning, negotiate with John Strong and GGG in advance and try to shoot as many John s parts as it could in February and March.
7 Conclusions
According to our analyses, by following the recommendations of this report, VYP is sure to succeed in strategic transition and have wider development space.
Appendix 1
SWOT analysis
Strength 1. Experienced and skilled staffs 2.High reputation in producing documentaries, comedies and entertainment programs 3.High team spirit Weakness 1.The producer teams weak understanding of the cost control and poor performance in financial anticipation and planning 2.Lower margin on recommissioned works 3.Lack of equipment 4.Routine anti-social hours behaviors
1.A renewed interest from viewers for documentary program in Peak viewing time 2.The huge and growing market for corporate videos 3.The new area of merchandising rights
SO Expand into the new market for corporate videos Ensure the high quality of the new documentary, Banks, Friend or Foe? Expand into the merchandised sales market
WO Improve the IT system offer trainings to the production team and the finance team to enhance their performance in planning and cost control Facilitate itself with its own studios and hire VT crews
Opportunity Threat
1.The common practice of TV broadcast companies to offer a lower commission fee for re-commissioned programmes 2.The high competitive market of TV program production
ST Well apply experiences gained from previous series to the recommissioned programs
WT Negotiate with BBC on the re-commission fee for the program series Eliminate the anti-social hour behaviors and care more about the workers
Appendix 2
Porters Five Forces Analysis

Factors increasing Force
Large powerful customers: BBC, ITV, CH4, CH5 The customers currently offer a commission fee which is adequate to provide VYP a 10% profit margin Small companies who work exclusively for VYP have low power Not over reliant on any outsourcer Able to exert pressure to reduce fees of suppliers
Factors lowering Force
Buyers Power High
Suppliers Power Low
The outsourced companies provide VYP with the equivalent of around 400 person years of work
Competitors Power Medium New Entrants Power Medium
Severe competition from other indies Reducing commission revenue due to a price competition Low entry barrier: renting facilities and availability of outsourcers enable start up at relatively low cost and limited expertise In-house production Acquired programs Other forms of entertainment the Internet, sports
A growing market
Existing competition in a market where revenues are under pressure
Substitutes Medium
Customers need for original and innovative programming
Appendix 3
PEST Analysis
Political Broadcasting policy has made most effort focused on promoting competition and ensuring shared ownership of intellectual property (IP). Competition brought benefits , but too much fragmentation and rivalry amongst competing suppliers has also proven counter-productive Helped by the 2003 Communications Act, the most recent corporate trends have been towards consolidation of ownership within independent television production and a reduction in the number of rival suppliers Britain exhibits a continuing recession and a worsening deficit in the balance of its international trade in television material In this highly competitive industry, indies tend to lack bargaining power in their negotiations with broadcasters, who offer limited prices and delay payment A production environment conducive to creativity and entrepreneurialism can be seen as the necessary bedrock for a healthy and vibrant indigenous television economy Historic data about the state of financial health of the independent production sector confirms that turnover tends to be volatile and profit margins generally very slender Theres renewed interest from viewers for documentary programs More and more people would spend time on Internet instead of watching TV Exports of UK-made entertainment programs and formats have grown strongly in recent years Computer graphics -- a key element for future development -- must retain lead in this area Website broadcasts/YouTube channels -- both an opportunity and an threat New technologies -- 3D/HD TV could be costly to adopt IT system -- improve cost-control and efficiency
Economic
Social Technological
Appendix 4
Prioritization Chart
Issue Reputation W1 1 2 3 4 5 2 4 3 4 5 0.4 0.4 0.4 0.4 0.4 Financial 3 5 5 2 1 W2 0.4 0.4 0.4 0.4 0.4 Urgency 3 2 3 4 5 W3 0.2 0.2 0.2 0.2 0.2 Credit 2.6 4 3.8 3.2 3.4 Priority 5 1 2 4 3
Explanation on credits given: Reputation: We take three factors into consideration when giving credits to Reputation. The factors are: program quality, brand recognition and corporate social responsibility. Among the proposals and problems, we think the accident at studio has the greatest impact on the reputation of VYP, so we gave it the highest rate of 5 points. The new documentary problem will affect both the programme quality and VYPs social responsibility; the corporate advertising video intensely increases the brand recognition of VYP, as a result, these two issues are given 4 credits. The merchandised rights will also increase the brand recoginition but only on a moderate skill and mainly on the existing viewers, so it is given a medium credit of 3. The re-commissioned fee problem will only shadow a limited impact on the program quality, so it is given a low credit of 2. Financial: The credits of Financial impact are given on three factors: profitability, liquidity and risk profile. We think the corporate advertising video and the merchandised rights have the greatest impact on VYPs financial condition as they would generate more profits and put VYP under greater uncertainty. The re-commissioned fee is a problem mainly affects the profitability, so the problem is given 3 credits. The remaining two problems, the cost control of documentary and
the accident at studio, wouldnt have a very serious impact on the financial profile considering the relatively small budget. Urgency: From the Urgency prospect, we think the issues already in operation are given the highest credits, so the accident at studio and the new documentary are given 5 and 4 points respectively. The two contracts issues, re-commissioned fees and merchandised rights, also needs to be negotiated within a short time period, and are given medium credits. The corporate advertising video means entering a completely new market and involves a lot of consideration, investigation and preparation, and it is not regarded as an urgent issue. Consistency with CSR: The issues facing Papy are more or less consistent with CSR. Penetrate Health Store Market promotes Papys idea of Healthy eating, while Internet Shopping of Organic Expansion greatly reduces the amount of carbon emission. These two issues are given the highest credit. Acquiring AW and Customer Loyalty all involves adjustments that either corrects the inconsistency or reduces waste and energy consumption. These two issues all have medium impact on the CSR. Fundamental Analysis only entails trivial matters concerning CSR, and thats why it is give the lowest consistency. Impact on Shareholders Value: Starting up a new business has a significant and long-term impact on shareholders value, thats why Penetrate Health Store Market and Acquire AW Superstores both get our highest ranking. Besides, the analysis of current operating performance can also reveal the existing problems and may greatly increase the shareholders value, so Fundamental Analysis is also given a high credit. Organic Expansion and Customer Loyalty only aim to increase Papys revenue in a highly competitive market. Moreover, these two issues do not require a substantial initial input. They are given a medium level of impact.
Appendix 5
Financial analysis of corporate advertising videos

Neutralism Revenue Studio hire Actors Film crew Scripting Music Total costs Margin Margin % 1st video/ 17,000 5,000 4,000 6000 1,200 1,500 17,700 -700 -4.12% 2nd video/ 17,000 4,250 3,400 5,100 1,020 1,275 15,045 1,955 11.50% 3rd video/ 17,000 3,613 2,890 4,335 867 1,084 12,788 4,212 24.78% Total of 3 videos 51,000 12,863 10,290 15,435 3,087 3,859 45,533 5,467 10.72%
Optimism Revenue Studio hire Actors Film crew Scripting Music Total costs Margin Margin %
1st video/ 17,000 5,000 2,800 6000 1,200 1,500 16,500 500 2.94%
2nd video/ 17,000 4,250 2,380 5,100 1,020 1,275 14,025 2,975 17.50%
3rd video/ 17,000 3,613 2,023 4,335 867 1,084 11,921 5,079 29.88%
Total of 3 videos 51,000 12,863 7,203 15,435 3,087 3,859 42,446 8,554 16.77%
Note: there are 40% chances of the optimistic situation
Financial analysis of corporate advertising videos (Ctd)

Pessimism Revenue Studio hire Actors Film crew Scripting Music Total costs Margin Margin % 1st video/ 17,000 5,000 4,800 6000 1,200 1,500 18,500 -1,500 -8.82% 2nd video/ 17,000 4,250 4,080 5,100 1,020 1,275 15,725 1,275 7.50% 3rd video/ 17,000 3,613 3,468 4,335 867 1,084 13,366 3,634 21.38% Total of 3 videos 51,000 12,863 12,348 15,435 3,087 3,859 47,591 3,409 6.68%
Note: there are 60% chances of the pessimistic situation
Appendix 6
The Changing Face of Corporate Video Industry in UK

Traditional approach
Focus of corporate video Your business or product
What works today
Whats changed?
The focus of video used to be just about promoting your brand - that usually meant a lot of talk about yourself. Production costs have dropped and corporations are being far more tactical with their use of video today. People trust friends and colleagues considerably more than they trust corporations. Soon, everything will be online broadcast media, corporate communications, presentations, etc. Actors still have a place in video, but nothing can replace the value of a real employee representing your company in your corporate video. Sounding helpful is better than sounding important. Important is about you. Helpful is really about the customer. It used to be that marketing would set aside $50,000 for one video. Today it might make more sense to set aside $50,000 for
Solving your customers problems
Budget
Large
Small Medium
Access to videos
Tightly controlled by the sales team or marketing
Created with the express purpose of being shared everywhere.
Primary delivery method
- Tradeshows - Meetings - Sales Calls
Web, as well as other traditional methods
Typical message delivery
Actor, presenter or professional voice-over
Real people saying real things
Desired perception of a corporate video Frequency of production
Authoritative
Informative
1 or 2 videos a year
10s or even 100s of videos
ten or more videos. There will always be a place for large scale video productions but the vast majority of videos will be targeted videos delivering a single message to a single audience. Your website isnt the destination you think it is. Creating content that can be viewed wherever your customer happens to be makes a lot of sense.
Scope of video production
Broad a single video covered as much ground as possible
Narrow video focuses on a specific audience with a targeted message
Where videos should be found
On your website
Wherever your client happens to be: YouTube, a business portal, on their mobile phone, searching, etc.
Uses of Video
- TV Commercials -Sales Presentations - Homepage of your website.
- Customer Testimonials - Video Case studies - Product explainer videos - Product FAQ - Event promotion - Recruiting The number of uses of video - Viral Video continues to grow every day. - Content marketing - Infomercials - Interactive video - Video press releases - Community relations videos - etc.
Appendix 7
The Breakeven Sales of Merchandising Sales

Revenue Program fee Revenue/h Total hours Cost Profit 6,300,000 6,300,000 350,000 18 C 6,300,000-c
Revenue Program fee Revenue/h Total hours Merchandised sales Cost Program cost Merchandised cost Profit
4,095,000+0.4s 4,095,000 227,500 18 0.4s a+0.3s C b*0.75*0.4 4,095,000-c+0.1s
Breakeven sales
22,050,000

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Report for VYP

Donglei Ma cornelia339@gmail.com Wenwen Bi zd.biww@gmail.com Yanxin He yyxxhhzz@gmail.com

3 Identification and prioritization of issues

Priority 1 Expand into Corporate Advertising Videos

Priority 2 Fee Negotiation for New Childrens Programme

Priority 3 Accident at Studio

Priority 4 Banks friend or foe? A new documentary of VYP

Priority 5 Re-commissioned Drama Series

4.1 Expand into corporate advertising videos

company or advertising design company.

4.2 Fee negotiation for new childrens programmes

4.3 Accident at studio

4.4 Banks friend or foe? A new documentary of VYP

4.5 Re-commissioned drama series

5.2 High-quality TV Program

5.3 Charity and Public-benefits Programmes

5.4 Development of the Youth

6.2 Fee Negotiation for New Childrens Programme

6.3 Accident at Studio

6.4 Banks friend or foe? A new documentary of VYP

6.5 Re-commissioned Drama Series

Porters Five Forces Analysis

Factors lowering Force

Buyers Power High

Suppliers Power Low

Competitors Power Medium New Entrants Power Medium

Existing competition in a market where revenues are under pressure

Customers need for original and innovative programming

Financial analysis of corporate advertising videos

Note: there are 40% chances of the optimistic situation

Financial analysis of corporate advertising videos (Ctd)

Note: there are 60% chances of the pessimistic situation

The Changing Face of Corporate Video Industry in UK

What works today

Solving your customers problems

Tightly controlled by the sales team or marketing

Created with the express purpose of being shared everywhere.

Primary delivery method

- Tradeshows - Meetings - Sales Calls

Web, as well as other traditional methods

Typical message delivery

Actor, presenter or professional voice-over

Real people saying real things

Desired perception of a corporate video Frequency of production

10s or even 100s of videos

Scope of video production

Broad a single video covered as much ground as possible

Narrow video focuses on a specific audience with a targeted message

Where videos should be found

- TV Commercials -Sales Presentations - Homepage of your website.

The Breakeven Sales of Merchandising Sales

4,095,000+0.4s 4,095,000 227,500 18 0.4s a+0.3s C b*0.75*0.4 4,095,000-c+0.1s

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