competition as new companies enter the market, combined with lower commissioning rates from the broadcasters as they face up to reduced licence fee and advertising incomes during the post- recession period.
An acquisition of either Company A or Company B will provide VYP with a bigger presence in the potentially lucrative drama genre and the expertise that would be acquired offers the potential of improved future profit margins. The impact on VYP will be large both financially and also culturally, as the integration of the two entities will impact significantly on VYP's existing staff.
Company B has requested an initial response within two weeks which gives this issue a high level of urgency. This would be a shift in strategic direction for VYP and the combination of high impact and urgency makes this the number one issue.
The reputation and future success of VYP is intrinsically linked to its staff and the introduction of the proposed scheme will impact staff financially and emotionally, as it will affect perceptions of their relationship with management. If adopted, the scheme may help to address the issue of falling profit margins.
The future of VT editing is currently being discussed which means that a quick resolution of this issue is required. Raj and Paul also hold 10% of the share capital each, which is significant in the context of control of VYP.
ABC'sMD is keen to receive a prompt response and a number of other production companies are believed to be interested in this project, giving this issue a degree of urgency. However, this does not represent a change in strategic direction or involve significant up front costs and for these
(Ansoff's matrix). Large initial costs and a lack of management experience has meant low margins of 7.6%. This market segment commands a high average commissioning revenue per hour and the acquisition of either Company A or Company B and the synergies resulting from shared best
Company A has achieved a good record of having shows re-commissioned and the successful cost control that has been implemented is something that VYP could learn from as it looks to implement cost saving measures.
also be helpful in building VYP's relationship with the BBC which is committed to spending 30% of its programming budget on regional productions. Building a regional capacity is an important issue; in 2008 Talkback Thames invested heavily in opening a new office in Scotland.
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