Cork’d is a New York based wine social network. The site has been very successful; however, it is at a point where it is encountering financial distress. Cork’d’s start-up funds are diminishing and they are shorthanded on developers. The company is confronted with two major alternatives (1) Stay with their current business model or (2) Create a different business model in order to not only stay on business but to compete and regain the members both individuals and wineries that they have lost to their competitors.
Since Cork’d inception in February 2006, the company was designed for and by wine lovers. Time showed that this industry had such a demand that needed more dedication and that is when…show more content… Major Strategic Alternatives
There are two major alternatives, which may be considered by Cork’d:
1. Current model is good but execution is weak
2. Different model is needed for generating revenues
Staying with the current model
This alternative would imply that only one source of income would be utilized. Therefore, their major marketing campaign would have to be concentrated on aggregate value to wineries through the website. However, Cork’d is behind building the website, which only indicates that not enough time is dedicated to the same. Emphasis would need to be put in how to provide better value to both wineries as well as users.
Adopting another business model
This alternative would imply a consideration to the following models:
- User fees
- Selling wine (becoming an online distributor to member wineries or commissions from various online distributors linked from the site)
The more advertisement, the more exposure the company will have. Even though, Gary mentions the website when he is invited to different shows; additional advertisement campaigns could be launched, such as advertisements on the website (wine related, i.e. wine accessories).
At the same time Cork’d is trying to make a decision, Cellartracker.com, a competitor is charging an user fee according to the amount of wines and comments each user has. That is a great idea. Cork’d needs to keep in mind