Cima Case Analysis 2012

3576 words - 15 pages

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FVYP (x) = ethics3 + strategy2 +operation1

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1. Introduction··········································································3
2. Prioritization of key issues ····················································· 3
3. Comprehensive analysis ·························································4
3.1 Ethical Emergency: Duty of Care········································ 4
3.2 Important Strategic Move: Entering Corporate Advertising·····4
3.3 Decision on Documentary: Cost vs. ...view middle of the document...

Introduction

At its eighth year of operation, VYP is now one of the top 20 independent TV production companies in the U.K. VYP currently faces a set of dilemmas, including ethical emergency, strategy choices, and operational challenges. Considering the corporate value of producing successful programs with innovative ideas, as well as the industry trend mixed with challenges and chances, we identified the core issues for VYP in each case and provided corresponding analysis and recommendations.

2. Prioritization

The main considerations we have in prioritizing the issues are business ethics, company objectives, development strategy, industry trends, and financial concerns.

The most urgent issue is that of the ethical emergency. Based on business ethics, VYP has the duty of care for its workers, including third-party workers, as it reflects the fundamental philosophy of a business. Immediate response to this issue is crucial in maintaining its business fundamentals.

The second most critical issue is the proposal raised for VYP to make online corporate advertising video to expand into a new market, which can be a crucial stimulus in maintaining VYP’s growth momentum. There is huge potential revenue to gain in the market for corporate advertising videos in online platforms. However, VYP holds no previous experience in the respective field and hence encounters a certain degree of risk. The management needs to decide whether to accept the proposal or not, by considering its short run and long run implications.

The new documentary project involves a potential growth opportunity, even though a loss might be incurred. Comparing with the previous issue of corporate advertisement, this issue involves less risk, factoring in VYP’s previous operational experience and know-how; however, the profitability is relatively lower.

The proposal of re-commissioning a second drama series is placed at the fourth, given that it is the traditional mainstream business with relatively low risk level, and VYP’s has previous experience in producing the widely accepted first series. Also, VYP’s stable position in this main business as well as the predicted lower operating margin weakens the urgency and significance of this case. Facing the ever-worse bargaining situation against broadcasters, VYP management needs to take action to maintain a higher profit margin.

Finally, a children’s program commissioned to VYP faces the decision of whether to accept the merchandising rights or not. Earning these rights in exchange for part of its commission revenue may bring attractive profit margin, but can also expose VYP to considerable risks in its liquidity. With regards to the strategic plan of VYP and resources needed in other projects, this proposal should achieve a balance of the desired levels of liquidity with the risks VYP can bare.

3. Analysis

3.1 Ethical Emergency: Duty of Care
The accident occurred in the studio hired by VYP, where a set builder...

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