Page 1 of 25 Assessment and Analysis for Managers in Design .docx

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Assessment and Analysis for Managers in Design and Media
Arts
©2011 Miami International University of Art and Design
Blue Valentine Digital, LLC
Company Overview
The Business of Design and Media Arts
Creative work was once seen as a business with the least
sustainable competitive advantage.
Nevertheless, with the pace of technology, this perspective has
changed significantly. Design and
media arts businesses have now been placing emphasis on
marketing, Internet viability, and all
design and media impacts that follow to create the field as an
ongoing enterprise choice.
Design is a strategic driver of organizations where designers
and agencies propose solutions that
help organizations achieve their strategic objectives. For
instance, designers need to determine
what the best communication tool is for a given objective. They
would need to evaluate the
communication angle of a design piece, whether it is the public
relations angle or from the
informational perspective.
As a student of design and media arts, you will be required to

recognize what awaits you when
your course is complete. This course will enable you to apply
your talent in the marketplace by
utilizing the principles of marketing, proposals, and business
operations to make executive
decisions.
To link creative skills with business understanding in order to
be successful, the case study
presented in this course explores various types of financial and
accounting principles that are
used in business. These principles will provide you with tools to
examine and assess executive
managerial decisions.
You will be presented with the case study of Blue Valentine
Digital, LLC (BlueVal), a private
digital media company, which has its headquarters in the West
Village in New York City. This
case study will provide you with the foundations to evaluate the
company’s different projects,
analyze their investment feasibilities, as well as make executive
and managerial decisions. The
objective of this case study is to understand accounting and
finance decisions from the
perspective of the owners and senior executives of the company.
The Market Need for BlueVal
With increasing global competition, digital media companies are
now required to create a
competitive advantage that goes beyond developing just a
normal Web site with a header graphic
and a three-column layout. Digital media companies are now
required to specialize in interactive
Web site design. A key aspect of establishing competitive

advantage in the design and media
industry lies in engaging in user-centered design. Companies
that understand user-centered
design are the ones that are able to develop customized
solutions for clients, being on the highest
end of innovation.
Such interactive, innovative, and aesthetic Web sites not only
showcase clients’ products and
services but also engage their potential customers in active
discourse. As such, digital media
companies that are diversely spirited as well as different often
create titanic gaps between
themselves and competitors. Moreover, the need for
aesthetically eye-catching, user-friendly, and
business-personality-linked Web sites has been the most
significant modality of conducting
business in the twenty-first century. Nevertheless, the greatest
challenge in the business-
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customer relationship is demonstrating to clients the return on
their investment while struggling to
keep their projects under budget.

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An Introduction to Blue Valentine
Blue Valentine Digital, LLC, is a media design agency that
provides interactive and digital
marketing solutions. The company develops brand assets and
Web sites that engage its client’s
constituents as well as tracks blog discourse. Its solutions
include technology-capable strategies
such as user experience analysis, return on investment (ROI)
and dashboard measurement,
creative solutions (including video and animation), media
buying, and planning solutions.
The Company’s Actors
The founder, Jason Viola, chairperson and CEO, is one of the
preeminent authorities on digital
strategy and Web application development in the world. He is
consulted at the highest levels for
S&P 500 leaders such as Lilly, American Express, Citigroup,
Merck, Armani, Versace, and Dash.
Jason is a frequent and highly welcomed speaker at major
industry conferences and is regularly
published in widely read trade journals. He is regarded as an
expert in interactive marketing,
regulatory compliance, and direct-to-consumer Internet
marketing.

Prior to founding Blue Valentine in 2000, Jason’s career in
digital development began in 1990
even before anyone outside the academic community had heard
of the World Wide Web. He
designed some of the earliest corporate Web sites and Web-
based software applications and has
won dozens of industry awards throughout his career, which
spans over twenty years. Under
Jason’s mastery, Blue Valentine has grown from a computer-
laden office in a garage in Hoboken,
New Jersey to a prominent New York City operation.
In 2004, Blue Valentine was in need of a media department, and
so, Reese Miller was taken on to
head the company’s media operations. Reese has had plenty of
experience delivering
exceptional media. In Blue Valentine, he challenged his media
skills at delivering goods to some
top brands. Within a short time he created a remarkable
presence with a media machine.
At Blue Valentine, Reese uses his research and creative talent to
develop dynamic media plans
that put the client’s message out to the right audience for
maximum impact. His vast, digital-
media experience plays a significant role in launching brands,
expanding databases, and
strategic planning.
Lisa Angelica is Blue Valentine’s vice president and general
manager. Lisa directs all aspects of
interactive marketing production at Blue Valentine, consults
with clients, and mentors a growing
staff of the industry’s best project managers. As a champion of
the user experience, her main
goal is to provide digital solutions that offer constituent users a

decidedly superior experience and
achieve profound experiences with the digital brand.
Angelo Rico is the senior vice president and creative director of
Blue Valentine. Angelo has been
working in interactive and creative media since the 1990’s. As a
former partner in a well-known
company, Angelo has created groundbreaking, original work for
A-list medical schools and
hospitals since before the concept branded content was the
industry buzzword.
Planning a New Venture
Blue Valentine is a privately held company. Jason Viola is the
owner and significant decision
maker. Jason as well as other senior staff see the potential of
Blue Valentine moving into the
healthcare field and offering interactive healthcare solutions to
major teaching hospitals not only
throughout the U.S. but also globally. Currently, the company is
pitching to well-known research
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institutions in the U.S. In order to achieve the goal of being a
preeminent leader in healthcare
solutions, senior staff members have decided that Blue

Valentine should issue an initial public
offering to raise capital or court private equity firms to ensure
that these initiatives are
sustainable.
Lisa suggests that BlueVal draft an executive summary, which
will serve as the beginning of a
prospectus and introduce the company to prospective investors.
Executive Summary
A. The Company
Blue Valentine is an interactive media agency specializing in
sales and marketing solutions
primarily to healthcare clients. It has won numerous awards,
including some of the medical
marketing industry’s top honors. The awards include patient-
oriented Web sites on Crohn’s
disease, physician information Web sites on asthma, and a
campaign supporting a drug for
rosacea. Blue Valentine performs the following services:
Provides computer-related and Web site design services. It
offers creative design,
media buying, and planning search-marketing companies.
reach, search engine
visibility, accessibility, and readability.
language blog processing,
clickstream tracing, and intercept surveys to monitor the
audience’s habits.

viral marketing services.
advertisement campaign
services.
B. Company’s Mission
Blue Valentine creates unforgettable brand knowledge for the
significantly increasing digital
world. A privately held, full-service agency, Blue Valentine is
committed to technology-enabled
research, strategic planning, creative design, messaging, and
analytics. Equipped with the most
sophisticated research tools developed from the world’s
foremost professionals in the digital and
social media landscape, Blue Valentine retrieves and assesses
competitive audience insights
from the complexity of the digital landscape.
Today, social and digital media is changing the relationship
between designers and clients,
allowing the opportunity to collaborate and to place designers
as facilitators of complex design
processes. Designers are becoming experts at the process of
designing and not necessarily
perceived as the experts who have all the answers to design
questions. The complexities of the
market make it a land of nonexperts.
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Operations and Market Opportunities
Blue Valentine—A Model of Sustainability
Blue Valentine provides the following services:
-related and Web site design services
and planning search marketing
companies
Internet research related to audience reach, search
engine visibility,
accessibility, and readability
marketing services
Blue Valentine’s plan is to target medical research institutions’
need for Web site design and
social media solutions. There are many hospitals and healthcare
organizations that utilize Web
site services and digital media.
Jason Viola has consistently argued that marketing strategy is a
critical business decision for
healthcare organizations. He recently developed a white paper
that supports the theory that

healthcare marketing mechanisms—such as print media,
television, and radio—are simply too
expensive for the services healthcare organizations provide.
Based on many conversations with
doctors and administrators at leading healthcare institutions, he
suggests that consensus grows
among providers that these strategies are just too expensive to
provide information that can be
evasive.
Moreover, these types of channels do not forge bonds between
the clients and their constituents.
With the arrival of social and digital media, marketing
strategists are now able to connect clients
with their constituents. Jason still believes that healthcare
information is still daunting;
nevertheless, social and digital media mechanisms have
provided ways to deliver specific
information and improve relationships between medical service
providers and their patients.
The white paper also suggests that entities embracing digital
and social media can provide
training opportunities for current staff to share information and
best practices. Additionally, these
organizations can use these platforms to recruit new employees.
Considering the increasing cost
of healthcare and the growing number of healthcare institutions,
Web site design services,
analysis, and social media tools will help hospitals and
healthcare organizations stay up-to-date
with their patients as well as stay connected to the healthcare
community as a whole.
Generally, large-scale healthcare institutions typically have the
technical infrastructure and capital

resources necessary to build expansive media or technological
systems. The decision to pursue
large-scale medical institutions would benefit Blue Valentine’s
design and consulting modalities.
However, after conducting client surveys and evaluating the
results, the senior management team
identified that BlueVal’s skill would most likely excel in very
specific healthcare markets.
At this point in the organization’s development, the team
categorically decides that their best
option would be to develop modalities for smaller healthcare
institutions. As such, the
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development of these solutions would prepare them to enter the
larger healthcare market. These
smaller projects would generate income from Web site
development, Web video, constituent
feedback and interaction, and brand marketing; all of these
activities are aimed at increasing
clients’ ROI.
The following initiatives represent revenue optimization:
1) Revenue from Search Engine Optimization Modalities

Search engine optimization (SEO) is the process of refining a
Web site’s place in search results.
This is performed by increasing the information on the Web site
to include keywords or phrases
commonly used by individuals when looking for a particular
Web site. Site structure, navigation,
coding, and naming conventions are also important to consider
when optimizing a Web site to
improve its placement in search results. Results found through
SEO are often called organic,
natural, or algorithmic search results.
2) Revenue from Open Platforms—Facebook, Twitter, and
YouTube
Social networks provide a meeting place for consumers to share
experiences. Consumers,
especially medical consumers, are willing to share information
with one another. BlueVal
understands that these platforms allow healthcare providers
access to real-time feedback so that
they can adjust their processes and train staff accordingly.
3) Revenue from Web 3.0 Applications
Web 3.0 succinctly introduces a person behind the Web. As
such, the Internet can provide the
capacity to track, gather, and synthesize information about the
user’s history, favorites, likes, and
dislikes and then provide helpful suggestions.
Team BlueVal has developed a software to provide these
capabilities, but it is still in the testing
stages, hampered by a lack of investment as well as the political
will of senior management.
However, newer team members firmly believe that by providing

this modality, end users can
simply enter two or three part questions and the search
capabilities of the solution will be able to
synthesize the information quickly and astutely.
4) Revenue from Branding
Creating strategic content network solutions.
Revenue Streams from Future Innovations
Blue Valentine is committed not only to developing applications
for healthcare providers,
permitting digital and social media, but it also explores ways to
help clients differentiate
themselves from their fellow providers by developing their own
communities as well as offer
groundbreaking features and applications that will greatly
benefit all healthcare community
members.
As difficult as it is for Blue Valentine team members to gather
data to estimate costs and
revenues, the opportunity for growth in digital and social media
is extremely evident. In the 1990s,
the US market for interactive healthcare digital and social
media solutions was growing rapidly,
paralleling the growth of the Internet capabilities (Hawn, 2009).
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Angelo Rico cited market projects estimating a large transition
from current to future capabilities.
A few examples of these projects are as follows:
healthcare service providers
to anonymously rate their medical care with doctors and
hospitals using criteria provided
by the National Institute of Health (NIH).
send and receive instant
messages as well as enable video chat with their doctors to
receive immediate answers
to healthcare questions. In rural areas, where sophisticated
medical procedures are
limited, this modality will connect patients to larger medical
teaching hospitals.
applications to a healthcare
provider’s already established social network can be expensive.
Nevertheless, in future
social networking Web sites, similar to Facebook, consumers
will be provided with the
ability to schedule appointments, view and pay their medical
bills, and see portions of
their medical records.
The Health Insurance Portability and Accountability Act
(HIPPA) and confidentiality laws
have prohibited general access to this information without
permission. However, once

protocols are in place, healthcare providers may consider
uploading, to a social media
Web site, new patient or other informational forms that can be
downloaded and printed in
order to make a patient’s check-in smoother on arrival at the
healthcare provider’s office.
require personality tests to
match compatible users in order to form a successful
relationship, social networks or
networks within institutional Web sites could be devised the
same way to match patients
to the right doctor.
Jason researched criteria provided by the American Medical
Association. Based on this
information, he developed surveys that will be sent to regional
healthcare providers and
healthcare consumers. Once information is gathered and
analyzed, he hopes to develop
algorithms to match patients with doctors.
pharmaceutical companies to connect
with doctors and consumers, finding new ways to evaluate
combinations of treatments
that will take into account specific characteristics of patients,
such as weight, blood
pressure, etc.
Blogging—A Potential Project
BlueVal professionals are encouraging the utilization of
blogging for its healthcare organizations
to reach out to their community as well as new audiences to

share educational and thought-
provoking information about procedures and healthcare.
Blogging allows for industry networking,
quality discussion, and interaction where patients and families
can share their experiences with
each other and with the public.
BlueVal is looking toward creating the following for its client:
communication
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This initiative was developed after demographic targets were
identified and numerous surveys
were sent to healthcare facilities throughout the country.
Relative data was then collected and
analyzed.
Market Demand and Managerial Decision Making

Blue Valentine’s senior management knows that the
approximate costs associated with
development and implementation of these new protocols may
not be that easy to gather.
Nevertheless, they need to put together a demand analysis for
their products and services to
develop accurate forecasts.
Lisa is aware that BlueVal requires a significant accounting
platform to keep track of various
market factors that could affect profitability. Typically, the
factors include the following:
lar digital and social media
protocols
implement the same
technology
start-up costs for newer
firms
Demand Analysis
Sudden shifts in demand for their technology solutions could
contribute to Blue Valentine’s risk.

Lisa informs the team that a demand analysis would serve two
of their managerial objectives:
1) It would provide the insights necessary for effective
management of demand—to
determine whether office space is suitable—as well as the need
to hire additional project
managers and staff.
2) It would aid in forecasting sales and revenues.
A major uncertainty for the managers is the digital and social
environments. Blue Valentine
managers are uneasy regarding the demand for their
technological solutions. The team plans to
use forecasting, prediction, and estimation to reduce their
uncertainty. Having this information
would allow them to prepare for their business needs, that is,
capital and labor requirements as
well as cash flow and funding needs.
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Reference:
Hawn, C. (2009). Take two aspirin and Tweet me in the
morning: How Twitter, Facebook, and other social
media are reshaping health care. Health Affairs, 28(2), 2361–

2368.
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Marketing the Company
Each potential project of Blue Valentine would need a
customized presentation. Senior
management needs to expand and hire professionals in the
digital and social media industry to
market the company’s products and services. The new hires
must possess the right qualities and
qualifications for the job.
They would need to understand the following clients’ needs and
wants:
certain healthcare solutions that
would fit with client operations.
healthcare needs identified.
client in a way that makes
sense for them and their business.

convenient.
lution would
continue to improve the
client’s ROI.
The creative executives and solution engineers in the company
would continue to identify and
implement new product ideas. Senior management understands
that certain conditions must be
met and certain organizational resources need to be acquired to
help the teams develop optimum
solutions. In order to start the process, Angelo Rico understands
that the following concepts
should be executed:
t must be given by senior management and
colleagues
—the match between what senior
management states and what
it does
—maintaining an
open market place for ideas
in which the potential strengths of new ideas are always
identified before their potential
weaknesses.
In keeping with the recruitment needs and with the help of
Angelo Rico, three project managers
were recruited to travel the country marketing the healthcare
digital and social technological

services Blue Valentine has to offer.
Blue Valentine’s initial development, Search Engine
Optimization (SEO) Version 2, effectively
positions healthcare institutions through impact content and
reduces competitor encroachment.
The senior management has defined two phases to begin
launching strategies to market SEO
Version 2 and the other new initiatives.
Phase I involves the testing of SEO Version 2—before and after
implementation—to determine
the extent of its viability with clients and client constituents.
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Phase II involves raising additional resources for the projects in
the prelaunch stage or have at
least 80 percent completed. With each project, the managers are
required to evaluate project
cash flows and determine the present value of each project
compared with the upfront costs.
They are asked to develop a capital budget and start a risk
management plan. With each project,
the managers are responsible for reviewing the financial
projections and submitting budgets to
senior management so that the team can make sound managerial
decisions.

For most managers, financial criteria are the prescribed method
to evaluate projects. Such
methods are appropriate when there is a high level of assurance
associated with estimates of
future cash flows. Lisa and Angelo are considering two
financial models: the Payback Model and
the Net Present Value Model.
The payback model determines the amount of time it takes to
recover the initial project
investment. Shorter time periods to obtain the additional
investment are more desirable than
longer payback periods. The payback model is the most widely
used model because it is the
simplest to calculate. It focuses on cash flows, which is a
significant criterion in business
investment. Accordingly, some managers use the payback
method to primarily reject the more
risky projects.
The net present value (NPV) model uses management’s least
desired rate-of-return on
investments to measure the present value of all net cash inflows.
This entails using a discount
rate to adjust for today’s dollars. If the result is positive, that
is, the project meets the minimum
desired rate of return—cash inflows exceed cash outflows—the
project is considered for
adoption. However, if outflows exceed inflows, then the project
is rejected.
Lisa understands that qualitative criteria must also be evaluated.
Firms must endeavor to reject
lucrative initiatives that are outside the scope of their strategic
plan and mission statement.

Understandably, BlueVal cannot support projects that do not
have high profit margins but support
strategic reasons including:
generation products
vernment intervention and regulation
Generally, most of the company’s business decisions are long
term. Nevertheless, the objective
always remains the same—to protect the corporate image and
enhance brand recognition. In
making sound, managerial decisions, the team understands that
thorough portfolio management
requires multi-criteria models.
While Jason, Angelo, and Lisa believe that it is important for
the company to be profitable, they
also believe that the organization should develop a relationship
with the community. They feel
socially responsible to the community to do no harm. Together,
they have written a vision
statement for the organization:
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-quality products and services that
will not harm the
environment.
reliable.
et reasonable goals for staff and clients.
As the number of projects successfully develop to fruition,
project managers will be promoted to
regional managers and relocated to where healthcare solutions
are demanded. Once domestic
infrastructure is established and operating for these clients, the
management team can survey
international markets.
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Quality and Regulatory Management

Whether online or offline, the healthcare industry is heavily
regulated. Therefore, team Blue
Valentine has to be familiar with industry standards and develop
digital media guidelines to
adhere to these industry standards and …

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