Strategy and a Company's Business Model

Read the overview below and complete the activities thatfollow.

While the company’s strategy sets forth an approach to offeringsuperior value, a company’s business model is management’sblueprint for delivering a valuable product or service to customersin a manner that will yield an attractive profit. In this exerciseyou will be asked to evaluate the business model for SiriusXM.

The two elements of a company’s business model are (1) itscustomer value proposition and (2) its profit formula. The customervalue proposition is established by the company’s overall strategyand lays out the company’s approach to satisfying buyer wants andneeds at a price the customer will consider to be a good value. Thegreater the value provided and the lower the price, the moreattractive the value proposition is to customers. The profitformula describes the company’s approach to determining a coststructure that will allow for acceptable profits given the pricingtied to its customer value proposition. The lower the costs giventhe customer value proposition, the greater the ability of thebusiness model to be a moneymaker. The nitty-gritty issuesurrounding a company’s business model is whether it can executeits customer value proposition profitably. Just because companymanagers have crafted a strategy for competing and running thebusiness does not automatically mean that the strategy will lead toprofitability—it may, or it may not.

Go to investor.siriusxm.com and check whether Sirius XM’s recentfinancial reports indicate that its business model is working. Areits subscription fees increasing or declining? Is its revenuestream from advertising and equipment sales growing or declining?Does its cost structure allow for acceptable profit margins?

Are Sirius XM’s subscription fees increasing or decreasing?Explain your answer. Make this original and within the last 3yrs