C05: Time Out - A new strategy to bring back global profit

Question 1

Business Model of Time Out

Answer 1

• Advertising revenues
• % sales of restaurants at TOM
• E-Commerce revenues
• Commission for opening markets

Question 2

Time Out Market Lisbon (1st Worldwide) - Why Lisbon?

Answer 2

• Why Lisbon? – open culture, increase in tourism, lower costs, climate good for tourism
• High variety and quality of food
• No reservation, no dress code
• Novel, interesting experience
• Convenient location
• Mix of high-scale restaurants and middle-scale restaurants
• Expectations of high scale restaurant > might expect better service
• Expectations of food-court > might complain about waiting times

> in advertisements put emphasis on entertainment that goes beyond food by concert hall, cooking academy, art exhibitions – but in reality majority just there for food

Question 3

Business challenges for Time Out

Answer 3

• Putting more emphasis on bringing information online instead of printing
• Revenue streams:
  > Advertising
  > Licensing fees
  > Commission for organizing live events
  > Sales of printed magazines
  > Commission for click-through sales
• Licensing of magazine > not everywhere self-published
  advantage of having local expertise in every published city
• publishing where many events are happening
• presence in many countries – customer from one place consumes also in another place
• Establishing time out markets in North America > cultural differences
  rather low + knowledge of the market as their publishing there for many years
• Customization regarding concerts, events, art exhibitions to adapt sth. local

–> balance between customizing and standardizing

Question 4

Characteristics to be standardized

Answer 4

• Publishing under “the best of the city” – local and individualized food (balancing menu and hiring chefs)
• Standardize quick serve with buzzers, point of sale interface, china, large tables (bringing people together, encouraging togetherness and communication)

Question 5

Which competitive advantages can Time Out company derive as the result of operating in several countries

Answer 5

• First mover advantage
• Trust in the content/offerings by customers
• Familiarity (attracts chefs)
• High end experience
• International brand and thus familiar
• 1+1=3 media and market synergies
• Reduction in marketing and advertising costs

Question 6

Should Time Out company own and operate Time Out Markets in various cities around the world or should it license the concept and the brand of Time Out Market to local owners/operators? Why?

Answer 6

• In most important cities to make it a rare experience to go there
• No licensing, keep control as a selection of chefs is of vital importance
• Also concept could be easily copied
• Lack of interaction between magazine and market, if they write a review they have to implement it in the market as well

Licensing of Magazines
Advantages:
- Extra revenue with minimum investment
- Easier to overcome entry barriers
- Local knowledge

Disadvantages:

• Risk of low quality
• Potential loss of control

Question 7

Ownership of TOM in Lisbon

Answer 7

• New concept advantage of full control
• Learning experience to improve new product
• Easier to generate synergies with other products