Leonard H. Stern School
NEW YORK UNIVERSITY
Theory – Sales: Answers *
is TWQ’s best strategy?”
- TWQ’s best strategy is to make a false announcement
that it is not going to set up a cross-platform selling unit because it
(secretly) wants FOZ to say Yes and announce first while TWQ secretly
prepares to set up a unit.
it is vital for TWQ to keep its plans secret from VVY, it should quietly
let FOZ know by signaling in
some way of its plans in hopes that FOZ will announce Yes and, thus, create
the maximum advantage (Box 2, YNY, 6,1,2) for TWQ, because if FOZ says
Yes, then VVY will say No.
FOZ announces first, VVY will say No and not follow FOZ because of pride
and the animosity between the CEOs.
As soon as FOZ announces, then TWQ announces its cross-platform
unit immediately to get the most favorable outcome (Box 2, YNY, 6,1,2). Even though a YNN outcome (Box 3, YNN,
6,2,1) has the same advantage for TWQ (6), it would prefer FOZ had the
second best outcome (2) rather than for VVY to have it because FOZ is
weaker of the two.
FOZ says Yes first, then TWQ has to say Yes to avoid either a NNY (Box 7,
2,1,6) or a NYN (Box 8, 1,4,4), as both are very bad outcomes for
either VVY or FOZ says Yes to cross-platform
selling, TWQ must say Yes, so it must prepare now for the eventuality.
must say Yes because it has the most to gain (25 vs. 23,21)
by saying Yes and the most to lose by saying No (5 vs. 4,3).
FOZ does not announce that it is setting up a cross-platform sales unit
by March 1, TWQ must announce its unit on that date in order to have
two-and-a-half months to contact major advertisers and their agencies to
do big cross-platform deals before the upfront market breaks and
television network budgets, the biggest chunk of major advertisers’
budgets, are spent.
FOZ announces before March 1, then TWQ must announce the next day so it
can get on the street and begin selling cross-platform deals at the same
time that FOZ does so that FOZ doesn’t make any deals before TWQ
can. TWQ will be able to make the
biggest deals because it has the most assets, especially a huge
Interactive presence in the market, which gives it a decided advantage in
is VVY’s best strategy?”
must announce first, if at all possible, knowing that FOZ won’t copy it
because of the CEO competitiveness and hope that TWQ will not be able to
get its act together in time for the upfront market, which will give VVY
its best advantage (Box
4, NYN, 2,6,1).
if TWQ has announced No and VVY suspects it’s a false announcement and
will announce Yes as soon as one of the other companies does, VVY will
have its second-best outcome (Box 6, YYN, 4,4,1) if FOZ says No.
VVY announces first and TWQ does get its act together and announce soon
after and FOZ doesn’t announces, as expected, VVY would have its
second-best advantage (Box
6, YYN, 4,4,1).
has the second most to gain by saying Yes and the second most to lose by
So, VVY must announce Yes.
is FOZ’s best strategy?”
must announce Yes immediately in order to block the possibility of VVY
saying Yes and potentially put itself in its best position (Box 7, NNY, 2,1,6) and hope that TWQ can’t get its act together in
time for the upfront market.
announcing Yes immediately, FOZ gets out on the
street with the weakest assets, but the first to offer cross-platform
deals, thus giving it an advantage.
TWQ announces Yes soon after FOZ announces Yes, FOZ doesn’t gain a big
2, YNY, 6,1,2) but it is still better
off than with any decision combination if it says No.
In all of the above strategies,
speed, nimbleness, and flexibility are of the utmost importance. If TWQ doesn’t begin to organize a
cross-platform team immediately, it won’t be ready for the network television
upfront market. It has to start now
because of its inherent bureaucracy.
Even it if decides on a false announcement strategy, TWQ must start
organizing immediately. If VVY
hesitates, it will let FOZ, which is a smaller and more nimble, steal its
thunder, which means FOZ won’t organize a cross-platform team, and it will lose
the upfront opportunity. Eventually, VVY
will have to sell cross-platform deals, and if it waits, its CEO will lose
faith and look like a follower, which he hates.
Speed is most critical for FOZ so it can trump the possibility of VVY
announcing a cross-platform unit and get the biggest jump on the upfront
market. He who hesitates is lost in this
* Prepared by Charles Warner