Oz Tube is a social media platform based in Australia that promotes and advertises local events and businesses. This network conducts its commercial operations by using the strong and viable element of social networking. This business is one of the fastest-growing advertising companies, with a focus on video creation and online marketing. The advertising materials for OZ Tube are aimed towards those between the ages of 18 and 35. Through the two communication channels, this business offers services to the tourist and hospitality industries. OZ Tube is only active in Brisbane and south-east Queensland. The majority of the material is aimed towards the local people in this respect. All of OZ Tube’s hospitality material is targeted towards the young in these two regions. OZ Tube Productions collaborates with hospitality establishments and other recreational places to create custom video content that caters to the interests of young people (Tunji, 2011). In addition, the OZ Tube website offers information on what is going on in the local hospitality venues and any other relevant recreational event 24 hours a day, 7 days a week. Due to changes in the necessary content of advertising episodes in videos and on the internet, all promotional programs and films created by this business change rapidly with the times. We can evaluate the atmosphere of a dynamic process in which OZ Tube wants to create a new television program named The Pulse at this moment (Tunji, 2011).
Just like any other video programs hosted by OZ Tube, The Pulse carries the contents of hospitality and tourism events and venues. This is one of the contemporary TV programs aimed at facilitating delivery of promotional contents to the target generation. The Pulse will revolve around the aspect of entertainment, travel ways and recreational places. Video contents covered in the episodes aims at highlighting the main messages regarding these places at any given time. This TV program still targets the youth population of Brisbane and south-east Queensland. In this regard, the program communicates the major events happening in entertainment places and recreational facilities to the local population and in a timely manner (Frederick, 2009). In the context of entertainment, this TV program covers contents relating to any local entertainment events happening within a certain timeframe or even which theatres show whichever blockbuster movie in the market at that time. A business plan is required in this case by the company’s management responsible for the development and execution of The Pulse. This business plan will act as a barometer of the current and future state of things in terms of the company’s business objectives. The plan also helps to highlight important elements of the process, such as financial projections and potential hazards (Frederick, 2009). The Pulse, like any other commercial venture, will be subjected to a financial analysis to determine the project’s viability. A project is viable if the anticipated outcomes are in line with the company’s goals. In order to evaluate the project’s financial feasibility, a comprehensive financial study is required. In addition, information on the underlying project’s risk assessment will be used to support the feasibility decision.
One of the financial statement the will serve as a appropriate tool in the project’s financial analysis is the balance sheet. The company’s balance sheet reflects the current assets and liabilities that pertains the business and financial statements of the underlying project. This balance sheet guides the interested stakeholders, especially external financers like the sponsors in availing funds to the Pulse. The pulse aims at producing 13 weekly episodes. Therefore, successful production of these episodes need substantial amount of finances. Financial ratios calculated from the balance sheet depict the ability of the company to carry out the project in a financially stable manner (Frederick, 2009). In addition, values like profitability ration calculated from income statement will back up the statistical values obtained from the balance sheet values. All these values helps the project managers in planning for every step required to implement the project effectively. The company’s marketing department uses the values calculated from the financial status of the inventory in stipulating its marketing practices. Turnover ratio enables The Pulse marketers in determining the rate at which the project’s products and services will be received in Brisbane and south-east Queensland (Frederick, 2009).
Cash Flow Statement
OZ Tube Balance Sheet as at 31’st August 2012
A break even analysis is a financial figure obtained from the values relating to cost of production and the sales of products or services made. A break even point is calculated from cost and sales of products or services contained in the income statement. A break even point is a point where no profit or loss has been made in the production or service provision processes. At this point, the total cost of production is equals to the total sales made oven a given period of time. A break even point is a point which indicates the lower profit limit when determining the appropriate profit margins. In the calculation of a break even point, the fixed cost is divided by the unit selling price and the variable cost is subtracted from the result. After the calculation of a break even point, any other additional unit above the point results in a profit while any other unit below the break even point results in a loss (Frederick, 2009).
In this context of The Pulse, we will determine the fixed cost, unit selling price and the variable cost. Upon determination of these elements, we can apply the appropriate formula to determine the break even point that can be used to guide OZ Tube’s Pulse project. From the profit and loss accounts, fixed cost = 166,754. Price per unit=7,900. Variable cost =4000. Break even point= Fixed cost/ (Price per Unit-Variable cost). 166,754/ (7900-4000), =42 Units. In this regard, the break even point for the company’s service is 42 units.
Business projects are not risk-free. In this regard, The Pulse may experience some risks and obstacles in its execution. One risk is the aspect of competition. Advertising industry, especially in a capitalistic environment is competitive. Therefore, other video and internet promotion companies may come up in Brisbane. This will present some competition challenges to OZ Tube. The Pulse may loose the expected market share to these competitors. Subsequently, company’s sales will drop significantly; hence affecting realization of its business objectives (Tunji, 2011).
Obstacles and Risks
Intense competition may not allow OZ Tube to get the 13 Pulse episodes to a commercial TV. In addition, financial frustrations due to competition may not allow the company to move on with the project; hence The Pulse may stop after production of the 1’st series. In order to implement the two strategies in a smooth manner, the company should develop suitable alternatives for the problem.
Alternative Course of Action
The Pulse project managers should consider gaining substantial financial strength that will facilitate provision of funds needed to pay wages for the project’s technical teams. In addition, the company can overcome the forces of competition by adjusting to market trends, especially technological advances in a timely manner. The company should take advantage of any new video production technology in the market. The Pulse can also address competition by establishing good customer relations during production of the first episodes (Tunji, 2011).
Effective implementation of the project by following all the required steps will result in a successful business opportunity. Sales will start to peak following the ideal product development circle. After successfully completing the first 13 episodes, OZ Tube may embark on developing the second series. Market reception and the influence of external forces determine the procedures to be adopted in implementing the second stage. On the other hand, OZ Tube may revert to taking the company public. In addition, a company can be liquefied through acquisition process. These sale processes will be guided by the financial statements formulated in the later sections (Frederick, 2009).
Continuity of Business Strategy
In case the company wants to continue with its business practices, it can formulate comprehensive business strategies which specify the plans for developing the second series. Furthermore, the business should outline the processes for converting episodes from online recordings to suitable commercial TV channels. OZ Tube may select another company to carry out the second phase of the project, which is creating videos for commercial TV networks, in order to ensure the project’s success (Frederick, 2009).
- Tunji, S. G. (2011). Entrepreneurship Marketing: Principles and Practice of Sme Marketing. New York: Taylor & Francis.
- Frederick, G. C. (2009). Marketing for Entrepreneurs: Concepts and Applications for New Ventures. New York: SAGE.