Business model of Forbes ~ Business Plan, Revenue Model, SWOT Analysis

Introduction

Forbes is a company that has built a reputable brand in itself. Forbes has traditionally made money from subscriptions, single purchases, and advertising revenue. However, profiting from this paradigm is becoming increasingly complex and the entire media sector is affected. The business model of Forbes involves its business plan, revenue model, competitors, SWOT Analysis and many more.

Business Plan

With the focus on direct-to-consumer conversion, this investment will allow the company to design bespoke products that address these distinct business cohorts.

Forbes is a media and publishing firm based in the United States, formed in 1917. The company regularly covers business, technology, financial markets, financial planning, sports, and various other issues.

Forbes is focusing on trying to convert the regular subscribers into buying additional material like educational products, etc. The company now wants to utilize its proprietary technology stack and analytics to convert readers into long-term.

The company now wants to utilize its proprietary technology stack and analytics to convert readers into long-term, engaged platform users, including memberships and recurring subscriptions to premium content and highly targeted product offerings. In other words, they are focusing on trying to convert the regular subscribers into buying additional material like educational products, etc.

Revenue model

When the company started initially, its model was based on the fact that they were providing information that was verified and well researched.
The subscription model is the most important way of revenue for the company. The company tried to make fixed customers when selling physical copies. Although when they shifted to the online platform, they followed a similar pattern.
It is an example of a traditional revenue model. Companies buy advertising space on your site or magazine, also known as the advertising business model. Organizations express their intended content in text or visual format in the purchased advertising space. Companies pay you to promote their ads using standard advertising space for a price in the magazine, pay-per-click (PPC), pay-per-view (PPV), and other agreed-upon strategies online.
Live events have become a significant source of revenue.
Individuals and firms recognized on a Forbes Ranking, Cover Story, or other feature can repurpose the content for use on their owned and sponsored media platforms to highlight their excellent publicity and industry leadership. Billboards, print ads, banner ads, social media displays, television ads, and so on are examples of these.

Competitors

The New York Times
The Fiscal Times
Alister & Paine

SWOT Analysis

Strengths

High Margins – Forbes Fm charges a premium compare to its competitors. According to Naga Lakshmi Damaraju, Harshdeep Singh of Alliance Management at Forbes Marshall case study, this has provided Forbes Fm resources to not only thwart competitive pressures but also to invest into research and development.
Strong Balance Sheet and Financial Statement of Forbes Fm can help it to invest in new and diverse projects that can further diversify the revenue stream and increase Return on Sales (RoS) & other metrics.
Strong relationship with existing suppliers – As an incumbent in the industry, Forbes Fm has strong relationship with its suppliers and other members of the supply chain. According to Naga Lakshmi Damaraju, Harshdeep Singh , the organization can increase products and services by leveraging the skills of its suppliers and supply chain partners.
Successful Go To Market Track Record – Forbes Fm has a highly successful track record of both launching new products in the domestic market but also catering to the various market based on the insights from local consumers. According to Naga Lakshmi Damaraju, Harshdeep Singh , Forbes Fm has tested various concepts in different markets and come up with successful Strategy & Execution solutions.
Superior product and services quality can help Forbes Fm to further increase its market share as the current customer are extremely loyal to it. According to Naga Lakshmi Damaraju, Harshdeep Singh in Alliance Management at Forbes Marshall study – there are enough evidences that with such a high quality of products and services, Forbes Fm can compete with other global players in international market.
Managing Regulations and Business Environment – Forbes Fm operates in an environment where it faces numerous regulations and government diktats. In Entrepreneurship, Financial markets, International business, Joint ventures, Supply chain areas, the firm needs to navigate environment by building strong relationship with lobby groups and political network.
Robust Domestic Market that Forbes Fm Operates in – The domestic market in which Forbes Fm is operating is both a source of strength and roadblock to the growth and innovation of the company. Based on details provided in the Alliance Management at Forbes Marshall case study – Forbes Fm can easily grow in its domestic market without much innovation but will require further investment into research and development to enter international market. The temptation so far for the managers at Forbes Fm is to focus on the domestic market only.

Weakness

Lack of Work force diversity – I believe that Forbes Fm is not diverse enough given that most of its growth so far is in its domestic market. According to Naga Lakshmi Damaraju, Harshdeep Singh , this can reduce the potential of success of Forbes Fm in the international market.
Low Return on Investment – Even though Forbes Fm is having a stable balance sheet, one metrics that needs reflection is “Return on Invested Capital”. According to Naga Lakshmi Damaraju, Harshdeep Singh in areas Entrepreneurship, Financial markets, International business, Joint ventures, Supply chain that Forbes Fm operates in the most reliable measure of profitability is Return on Invested Capital rather than one favored by financial analysts such as – Return on Equity & Return on Assets.
Inventory Management – Based on the details provided in the Alliance Management at Forbes Marshall case study, we can conclude that Forbes Fm is not efficiently managing the inventory and cash cycle. According to Naga Lakshmi Damaraju, Harshdeep Singh , there is huge scope of improvement in inventory management.
Implementation of Technology in Processes – Even though Forbes Fm has integrated technology in the backend processes it has still not able to harness the power of technology in the front end processes.
Forbes Fm business model can be easily replicated even with the number of patents and copyrights the company possess. The intellectual property rights are very difficult to implement in the industry that Forbes Fm operates in. According to Naga Lakshmi Damaraju, Harshdeep Singh , Intellectual Property Rights are effective in thwarting same size competition but it is difficult to stop start ups disrupting markets at various other levels.
Project Management is too focused on internal delivery rather than considering all the interests of external stakeholders. This approach can lead to poor public relation and customer backlash.

Opportunities

Lucrative Opportunities in International Markets – Globalization has led to opportunities in the international market. Forbes Fm is in prime position to tap on those opportunities and grow the market share. According to Naga Lakshmi Damaraju, Harshdeep Singh , growth in international market can also help Forbes Fm to diversify the risk as it will be less dependent on the domestic market for revenue.
Changing Technology Landscape – Machine learning and Artificial Intelligence boom is transforming the technology landscape that Forbes Fm operates in. According to Naga Lakshmi Damaraju, Harshdeep Singh , Forbes Fm can use these developments in improving efficiencies, lowering costs, and transforming processes.
Developments in Artificial Intelligence – Forbes Fm can use developments in artificial intelligence to better predict consumer demand, cater to niche segments, and make better recommendation engines.
Reducing Cost of Market Entry and Marketing into International Markets – According to Naga Lakshmi Damaraju, Harshdeep Singh, globalization along with boom in digital marketing and social media has considerably reduced the risks of market entry and marketing in international market.
Access to International Talent in Global Market – One of the challenges Forbes Fm facing right now is limited access to high level talent market because of limited budget. Expansion into international market can help Forbes Fm to tap into international talent market. According to Naga Lakshmi Damaraju, Harshdeep Singh , it can also help in bringing the talent into domestic market and expanding into new areas Entrepreneurship, Financial markets, International business, Joint ventures, Supply chain.
E-Commerce and Social Media Oriented Business Models – E-commerce business model can help Forbes Fm to tie up with local suppliers and logistics provider in international market. Social media growth can help Forbes Fm to reduce the cost of entering new market and reaching to customers at a significantly lower marketing budget. It can also lead to crowd sourcing various services and consumer oriented marketing based on the data and purchase behavior.

Threats

Increasing bargaining power of buyers – Over the years the bargaining power of customers of Forbes Fm has increased significantly that is putting downward pressure on prices. The company can pursue horizontal integration to consolidate and bring efficiencies but I believe it will be a short term relief. According to Naga Lakshmi Damaraju, Harshdeep Singh , Forbes Fm needs fundamental changes to business model rather than cosmetic changes.
Government Regulations and Bureaucracy – Forbes Fm should keep a close eye on the fast changing government regulations under the growing pressure from protest groups and non government organization especially regarding to environmental and labor safety aspects.
International Geo-Political Factors – Since the Trump election, geo-political factors have taken a turn for growing protectionism. Developments such as Brexit, Russian sanctions, foreign exchange crisis & inflation in Venezuela, lower oil prices etc are impacting international business environment. Forbes Fm should closely focus on these events and make them integral to strategy making.
Threats of New Entrants because of Reducing Costs and Increasing Efficiencies – As Forbes Fm can leverage low cost of reaching customers using social media and e-commerce, so can the competitors – both local and international competitors.
Growing Protectionism – Forbes Fm should hedge the risk against growing protectionism ranging from – storing data into international market to diversifying risk by operating into countries at different economic cycle.
Credit Binge post 2008 Recession – Easy access to credit can be over any time, so Forbes Fm should focus on reducing its dependence on debt to expand. The party has lasted for more than a decade and rollback from Fed can result in huge interest costs for Forbes Fm.