1) What is a Business Model?
A Business Model is an overall plan in which a company implements towards their overall objective in which they are hoping to achieve. The main purpose of a business model is to provide a diagram in which shows how the company will be able to achieve their objective of increasing revenue and profit. Companies/businesses used business models because they include all of the activates and helps firms to participate within their marketplace. Although Business Model may sound simple enough, business models have a wide variety of imitations in which helps achieves different businesses objectives. When doing any of the many different types of business model the many questions that must be answers is “how are you as
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As advertising agencies purchase their spots it generates revenue for that particular station or stations. For the Fashion Channel, this business model is extremely important towards their future success in which they need to stay in the lead with their competitors (Lifetime and CNN). “Traditionally, the goal of broadcast advertising is to display and accentuate lifestyle and leave an impression (Chron).” As the Fashion Channel has seen a decrease towards rating of their network, TFC need to compete against a broad range of networks for advertising revenues. By attracting premium advertisers towards their network channel, not only will it bring more revenue towards the station but also attract a unique group of viewers which are interested towards the attractive advertisers.
Subscription Model – This type of business model refers towards customers in which purchase for a premium price in which to receive their particular content. “Users are charged a periodic – daily, monthly or annual – fee to subscribe to a service (Digital Enterprise).” For the Fashion Channel, this business model aims towards customers in whom they want to receive quality content which targets their needs and wants towards fashion and style. As TFC operates under the “basic channel”, consumers must pay a monthly fee for the basic lineup of channels and incremental fees for premium channels and on-demand programming. As this model is important towards TFC, cable affiliate fees
A business model is an important and integral part of the business a strategy of any firm whether big or small. The way a business model is developed determines and indicates the values, ethics and principles on the lines of which the business at large will be operating. It also indicates how the business is going to function and covers various internal and external dimensions of a business and the organization as a whole.
Strategy refers to an organization’s “overall efforts to gain and sustain competitive advantage” (Rothaermel, 2013, p. 9). An organization’s business model, on the other hand, “details the [organization’s] competitive tactics and initiatives”, which includes the steps necessary to put the organization’s strategy into action (Rothaermel, 2013, p. 11). The strategy is the theory of how the organization will make money, while the business model is the action necessary to achieve the theoretical strategy (Rothaermel, 2013).
Business model entails many facets. To narrow down the meaning of business model, it refers to the way businesses intend to create products to sell and to generate revenue in a particular industry (Ovans, A., 2015). As business decided elements necessary to accomplish goal and objectives, they must consider many factor that influence business models. According to Band (2009a), people, process & strategy effect business models. People effects business models through skilled or unskilled employees, organizational structures and incentives. Studies found that user adoption is the top problem that organizations face when implementing CRM solutions. Lack of training and education compound implementation CRM solutions. Change in
The Fashion Channel (TFC) was a widely available niche cable network which only offers fashion-oriented programming. It was very successful until other regular networks began to copy its concept and take market share of it, which as a result, had a severe negative effect on TFC’s advertising revenue and affiliate fees. The problem is how to develop the segmentation and positioning, change the current
Due to entry of other networks in the competition, the situation has started to become more challenging for TFC as many advertisers are moving to its competition. Hence, when selecting the appropriate strategy, consideration of the channel’s collaborators is also necessary for TFC in order to build or maintain a good reputation and relationship.
The Fashion Channel is a cable TV network that exclusively offers programs for a fashion-oriented audience. Initially, TFC was able to grow without any targeted segmentation or detailed branding strategy. TCF is still the only fashion channel but channels such as CNN and Lifetime are introducing fashion segments to their programming and in return have increased competition and threatened market share. The growth of The Fashion Channel depends highly on proper market segmentation. The addition of fashion segments by CNN and Lifetime means advertisers and viewers have alternative choices. These recent changes in the market have stimulated TFC to reconsider their approach towards their marketing strategy in order to secure their position as market leader. To advise with the marketing strategy at TFC, Dana Wheeler was hired. The focus of the new marketing strategy should be on the segmenting of the network.
Business models have a huge impact on how an organizations operate. It is crucial that an organization chose a business model before inception in order to succeed. Basically, business models have become the new basis of competition, replacing product features and benefits as the playing field on which companies emerge as dominant or laggards (Plantes, 2013).
Please read and analyze this case on market segmentation and targeting options for a cable television network dedicated to fashion programming. No research into the industry or firm is necessary. Please use only the information provided by the case.
Management level uses the business model to establish the strategies for the company’s operation and thus create competitive advantage over the company’s rivals and make more profit.
A business plan is the core of your business and a must have. It is the roadmap that brings your business idea into a reality. A business plan is a written document that describes in detail how a business, usually a new one, is going to achieve its goals. It guides your business from the start- up stage to developing, growing and managing your business. It can also be used to get funding.
Unfortunately, the competition has caught up and networks such as CNN and Lifetime have begun to offer competitive programs and thus competitive advertising outlets for the target audience. As a result, advertising sales is projecting a 10% decrease in the price for a unit of advertising (CPM) if the current strategy does not change. An internal weakness of TFC is that it does not know its customers intimately; as stated in the case “the channel didn’t have much in the way of detailed information about its viewers” (Stahl, 2007). Without this information TFC is unable to compete effectively against other networks who do know the target audience and their attributes and trends. If TFC is unable to maintain or increase its overall satisfaction ratings, they might face the possibility of being dropped by a network and lose a second source of revenue, affiliate fees.
Improved Advertising: The Fashion Channel (TFC) should concentrate more on improving its advertising strategy. This would be more beneficial for TFC, if it focus on targeting the viewers of certain age groups. For example, the advertisers are ready to pay premium CPM for the target group of 18-34. Focusing of such groups, TFC can substantially grow its advertising revenues (Stahl, 2007).
A business model is a company’s perception and conception of how the set strategies that a company pursues
As mentioned in the article, a good business model tells a good story. Effectively communicating an organization’s business model and strategy to all the members (employees) of the organization can enhance the company’s performance. By understanding where each individual stands and how they contribute to the value chain,
However, this paper chooses this definition as theoretical perspective of analysis for this paper subject to the following modifications: A business model is overall framework and philosophy by which a company (intends or) creates value in the market place through enhancement of its own combination of raw or in-put materials to create products (tangible and intangible including services), product packaging and systematic distribution in order to generate some or the best possible profit.