Posted: May 25th, 2022
Strategic Management Case Study of Atom Films
Summarize AtomFilms business model using the Who, What, How framework. Assess whether and why the elements of the business model are mutually consistent and reinforcing.
Examining the AtomFilms business model in accordance with the Who, What, How framework would necessarily begin by reviewing the qualifications and credentials of Mika Salami, the company’s founder. Salami possesses both a formal business education (MBA from INSEAD in France) and the specialized expert knowledge on short films that drives AtomFilms creative vision. In addition to Salami, AtomFilms is operated under the supervision of Jannat Gargi, who heads the content acquisition department, and Brian Burke, head of content distribution. Although these areas are identified as critical by the case study, the only subsequent information provided about either individual is that “Jannat Gargi’s approach to acquiring content was by building awareness at major film festivals by using a grassroots public relations: hosting parties, (and) giving away free stuff.” As far as What is concerned, the company relies on Salami’s expertise in the relatively niche industry of short film production, acting in the same capacity as a record label in the music industry, distributing short films produced by independent filmmakers. AtomFilms established itself as an industry leader in content distribution, by signing contracts to provide Air Canada with in-flight films and distributing an Academy Award-winning film on its first acquisition. In terms of How the company generates revenue, Salami created a wildly successful consumer website in 1999 to simultaneously capitalize on the advent of internet commerce and the growing interest in self-controlled media.
2.) Identify which of the strategies from Chapter 5 each of Mika’s possible approaches corresponds to (see Chapter 5 in the Fred David book).
The first possible approach available to Mika Salami — seeking corporate sponsorship — represents a combination of several strategic models. First, by opting to retain the current business model and expand the AtomFilms website capabilities, Salami would be pursuing the intensive strategy of market penetration, which is defined in the Fred David text as “seeking increased market share for present products or services in present markets through greater marketing efforts.” This would also be an extension of the defensive strategy known as divestiture, or the “selling of a division or part of an organization,” because ceding a constant presence on the website to a major corporation is akin to selling the AtomFilms brand to Ford or Volkswagen.
The second possible approach — introducing a subscription or pay-per-use fee to monetize consumer website traffic — is an extension of the intensive strategy called product development, which is when a company “seeks increased sales by improving present products or services or developing new ones.” Although the merits of a pay-per-use fee are highly debatable in today’s open-access era of online media distribution, the act of changing the AtomWorld’s business model and website design to monetize traffic meets the strategic standard.
The third possible approach — leveraging industry relationships to diversify into the offline film industry — is based on the vertical integration strategy of backward integration, or “seeking ownership or increased control of a firm’s suppliers.” This approach also involves the strategies of product development and related diversification.
3.) Using a framework of your choice (see Chapter 6), determine which of the strategic alternatives you would recommend that Mika adopt. Explain why.
Using the four quadrant Strategic Position and Action Evaluation (SPACE) Matrix, it is possible to determine the correct strategic approach from the following criteria: Aggressive, Conservative, Defensive and Competitive. The Space Matrix subjects the three possible strategic approaches available to Mika Salami to a comparison analysis based on two internal dimensions (Financial Strength [FS] and Competitive Advantage [CA]), and two external dimensions Environmental Stability [ES] and Industry Strength [IS]. Using the SPACE Matrix framework, I would seek to improve AtomWorld’s financial strength and competitive advantage by securing corporate sponsorship rather than moving to a subscription or pay-per-use fee model, because the young adults who comprise the company’s core demographic are far more willing to cope with an omnipresent Ford logo than they would be paying for content that has been provided for free during the last decade.
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