Case Analysis – Cityspace

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However, in order for the future expansion plans to come into fruition, it would need additional funding to continue to finance it operation.

- Assumptions

Financial Projection

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- Case Proper Analysis

Financial Analysis:

As can be seen in the financial model above, the company has been running negative income for the past 3 years and will continue to lost money in 1999. Its capital funding of about GBP 980K has already been depleted due to continuous need for cash to fund operations. It was only in 1999 wherein they added platforms in order for the product to be profitable to recover their expenses and return the capital of the investors. It is only in the 2000s where Cityspace is expected to recover their investment, and more time is needed before they start earning an acceptable amount of revenue to cover operational expenses and income for the investors.

This could possible pose as a problem for the VCs to provide investment funds to the company to support its expansion. Unless Deloitte could prepare a comprehensive/detailed business plan with projections for positive profit in the nearest possible time in order to entice VCs to invest in the company. The proposed additional platforms, although would need additional funding, a possible partnership could be established in delivering the new services. This partnership is not a new concept for Cityspace as this has been proved successful with NEC wherein they were able to save in manufacturing costs of the i+ kiosks.

Operational expense has been relatively heavy and has been eating up its thin gross income. The company is projected to operate profitable in 2000 but its negative capital position will remain negative as its income is unable to reduce the losses incurred for the past years.

Business Model:

- Growth Strategies

The strategy of Cityspace in terms of growing the company is introducing new platforms to the current i+ system. The additional platforms aim to increase the revenue of Cityspace to increase the value of the company and to encourage companies to invest in i+.

- Value Proposition

Cityspace promises its customer the convenience in going around Europe/London by providing listings for attractions, restaurants, theatre/cinema schedules and booking. The i+ would be like their tour guide in an unfamiliar place, without having to contract the services of one.

- Competitive Strategy

The competitive strategy of i+ is that it went beyond the function of just being an advertising listing for restaurants and attractions. The content of each kiosk is modified based on the requirement of the customer and advertisers. The i+ kiosks are strategically placed in locations with the busiest foot traffic. This ensures Cityscape that their kiosks are being accessed every so often.

- Market Segments

- Value Chain Structure

- Revenue Model

- Conclusion & Recommendation

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