1. What is the business model of Cork’d?

Initial Business model:

Cork’d was launched as a website dedicated to wine loves where they get a common platform

to rate and review wines. Initially Cork’d used an ad-based business model where it generated

revenue by the Ads posted in the website.

New Business Model: (Re-launch, May 2009)

Cork’dwas re launched in 2009 with a bit different model. Unlike previous model, it was

Advertisement free in order provide users the best possible experience and in order to create

brand loyalty among its customer. The new model of Cork’dhas two categories of customer as

Individuals and Wineries. The individual users can create account for free and can upload

profiles, interact with other users, choose friends, maintain a wine cellar, create a wine

shopping list, interact with wineries etc. along with the basic feature to rate and review wines.

Whereas Wineries has to pay $ 999 as annual fee and they can maintain profile pages where

they could post information, provide links to their own websites and can interact with fans of

their wine. Wineries are identified as verified when the have access to a particular profile which

is possible when you have paid the fee. Whereas the unpaid accounts are redirected to bare-

bones page where they could click on ‘claim’ and upgrade to full membership. Verified wineries

are occasionally featured on the site’s home page. Cork’d also featured wine from verified

winery owners for publication in Cork’d weekly email newsletter.

Modified Business Model: (Re-launch, September 2009)

Cork’d introduced a ‘newbie bags’ that users could earn once they performed certain activities

like uploading a picture, posting minimum number of reviews in order to keep user engaged. It

also introduced a feature to ensure that new articles were available on the site on regular basis.

It’s also planning to release new mobile application for easy access.

2. Do you agree with the decision to charge wineries $999 for an account? If yes, justify. If

not, what alternative would you propose?

Apart from normal services like providing online platform for wine selling, Cork’d offered its users the

best possible experience and attracted great number of users.The users remained loyal for the long

term, thus helping the wineries build a market which is continuously developing and sustaining. By

creating an ad-free site it has improved the customer experience, through reviews and detailed

information on wines and vineyards. As a part of promotion ,interviews on verified wineries were

published in weekly newsletter. This would obviously help wineries to build their market share and

increase brand equity.All these developments were involved to improve the experience for the specific

user for wines and increase brand loyalty and equity.Compare to other sites which were offering

membership fee based on no. of bottles were not really involving in building market share of wineries

registering.As this would increase sales and hence revenues for wineries in long term,I think the price is

charge –able and stays justified.