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Harlequin: The Mira Decision

Harlequin: The Mira Decision

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Harlequin: The Mira Decision

The publishing sector is one of the operational areas that require the operators to be keen on how they go about their activities to record the desired outcome. The case describes how Harlequin puts effort to remain competitive in an area where other players are striving to achieve the top position. Apart from focusing on creating an internal and external working environment that is conducive, the company must pay particular attention to other strategic means of remaining on the leading position, especially with its plans of entering the single-title business.

  1. Company’s Description

Company’s History

Harlequin Enterprises Limited commonly referred to as Harlequin has its headquarters in Toronto, Canada and specializes in the publication of single-title romance and women’s fiction books. The company that started its operations in 1949 after its establishment by Jack Palmer, Doug Weld, and Richard Bonnycastle through a partnership began to apply improved forms of publication in 1968 after taking over the activities of Mills & Boom which had its leading station in the U.K (Ivey Publishing, 2003). The company recorded a growth of 25% annually in the 1970s when it became the largest publisher of women’s series romance fiction globally. Tostar, a leading newspaper publisher in Canada, acquired all the activities and equipment by Harlequin during the early parts of the 1980s as a strategy for improving the business operations.

The Company’s Products

The company that operates in the book publishing industry as already stated pays attention to the production of publication of single-title romance and women’s fiction books. The world’s leading romance publisher started with producing series romance novels which put it in the limelight for many years. The company, nevertheless, acquired the desire to publish single-title romance novels after it became evident that many readers prefer this form of publication. The insight prompted the team to develop a task force in December 1992 that would look into the possibilities of entering into the line of production. Dona Hayes who serves as the deputy president of direct marketing stated that “The trend in the sector reveals that the needs for single-title women’s fiction novels continue to expand while the demand for the series romance appears to be stable”(Ivey Publishing, 2003, pp. 1). The company formed MIRA in 1993 amidst several challenges to take charge of the publication of single-titled works that would exclusively pay attention to women’s fiction.

The Market

Harlequin appears to cover an extensive market cover which gives it the chance to collect enough revenue that would sustain its activities. The company had sold its books to more than one hundred international markets by the 1990s, and this was made possible with the translation of the stories to more than twenty three languages across the globe (Ivey Publishing, 2003). The corporation managed to conquer a significant market share because of its diversity in production, primarily due to its participation in the production of male-action adventures and series mystery. The case study informs that Harlequin had about twenty million readers in North America alone and approximately fifty million readers in other parts of the world. The organization estimated that a majority of their readers might be married, educated, and working outside their homes with a majority of who purchase the books spending at least three hours to read each day.

Suppliers

The company relies on suppliers just like any other business organization that deals with manufacturing or production. Even though the case does not give any clarity on the names of suppliers who deal with the company, and instead only mentions that qualified authors submit their work for scrutiny and publication, it is evident that the company has to source essential raw materials from somewhere. The company, for example, must be acquiring its machines and resources such as papers and inks from reliable suppliers who understand the nature of activities at the institution.

Competitors

Competition exists in the publishing industry, and it depends on the strategies the organization uses to enter the market. The different publishing divisions in this sector appear to dominate their regions although some seem to perform well in foreign states. The competitors strive to produce quality substance and also consider pricing as a strategic way of earning a more substantial portion of the market. The competitors also appear to offer the best guidance and deals to the authors of single-title works which are emerging as the new trend in the market. The following is a description of the three major competitors in this area;

Simon & Schuster (S&S) is an American-based company that functions as a subsidiary of the CBS Corporation. The foundation that commenced its operations in 1924 was founded by Richard Simon and Max Schuster (Greco, 2004). The distinguishing feature that makes this publishing firm quite competitive is that it has gained vast experience in the field of publishing because of its operations for many years. The company hires qualified editors who use the improved facilities at the company to produce quality work (Greco, 2004). The principal feature that differentiates S&S from Harlequin is that the American-based company has extensive skills in the production of single-titled works, unlike Harlequin which sometimes seeks guidance from S&S on how to improve in this area of production.

Kensington Publishing Corporation in New York is also a stiff competitor for Harlequin. Walter Zacharius and Roberta Grossman founded the publishing firm in 1974 and continue to operate as a family business (Greco, 2004). The company that produces more than 500 titles annually and boasts of a vast category of backlist that still captivates many readers. The company can attract readers who value different themes because it has some imprints that operate under its name with the leading ones being Zebra Books and Pinnacle Publishers (Greco, 2004). The significant difference between Kensington and Harlequin is that the New York-based publisher attracts works from African writers which is not a typical feature with the Canadian firm.

The third company that proves to be a worthy competitor for Harlequin is Avon Publications that served as a leading publisher in New York and the whole of America before becoming part of HarperCollins. The company commenced its functions in 1941 when a brother and sister (Joseph and Edna Meyers) were hired to take over the firm’s operations (Greco, 2004). The firm seeks to acquire a satisfying portion of the market by adopting modern technological ways of going about its activities. The company, for example, is investing much in developing a digital imprint platform that would significantly transform the publishing process (Greco, 2004). The main variation between Harlequin and Avon is that the latter has a category for coming books which is not covered by the Canadian company.

The Current and Future Challenges

Harlequin deals with some challenges that it must address now and in the coming years. Apart from the competition that comes from other operators in the industry, the company has to deal with the changing customers’ wants and desires. The company, for example, now has to come up with plans on how to enter the single-title market which appears to overwhelm the series category. The changing nature of the market means that the company might have to expand its workforce by hiring individuals who have extensive knowledge of what is required to excel in this area. The firm understands that entering the single-title market will pose some challenges every book will require its distinctive features and will also need a new marketing strategy (Ivey Publishing, 2003). The company might in future have to deal with increased competition, and might even have to cope with the effects of increased cost of doing business.

  1. Case Analysis

External Analysis

The company performs an external environmental scanning which enables it to know how the external environment impact on the business performance. The company, for example, seeks to understand the effects of competitors on its activities. The external environment that influences the company’s operations falls into the specific and generic sectors. An example of a particular external environment is publishing in the single-title market as opposed to romance series, while an example of a generic setting is engagement in marketing activities in different markets and the possible effects.

Analyzing the Porter’s five forces provides an extensive overview of Harlequin’s external environment. The company’s performance relies on the concepts of buyers and sellers’ bargaining power which are key facets of the theory by Michael Porter (Mwangi et al., 2014). The document by Ivey Publishing (2003) gives the example of 2009 the late 1980s and the beginning of 1990s when the sellers’ bargaining power shifted upwards which gave the company the chance to escalate its prices. The organization, nevertheless, must lower its prices when the buyers’ power shifts upwards. The company must also consider the effects of the threat of new operators, the threat of substitutes, and industry rivalry which have a significant effect on the firm’s outcome. The threat of new entrants which Mathooko and Ogutu (2015) describe to be the emergence of new competitors such as is the case with Kensington Publishing Corporation that entered the sector much later in 1974 as opposed to Harlequin that entered the field much earlier (1949) may lower the profit margin. The emergence of substitutes such as the development of films that tell the same stories as the novels may also disrupt revenue generation although this does not come out in the case study document. Finally, it is important to be wary of the rivalries that may occur within the industry and which hamper good business relationship. Harlequin, for example, may become envious of S&S’ supremacy in the area of single-title novels not knowing that this may dampen the cordial connection that exists between the two giants.

Performing an external analysis of the different managerial levels and their impact on the business provides awareness on whether the leadership structure is capable enough to manage an institution of such magnitude. The process further enlightens on what the company needs to do to improve how the leadership learns from others who operate in other firms within and without the industry. Finally, performing an external environment analysis has benefits and challenges that the managers must understand. The primary advantage of conducting the exercise is that it makes it clear for the business how it may fit into the market. The challenge that the company needs to look out for, however, is the additional expenditure that the process needs to become successful.

Internal Analysis

The internal environmental scanning at the organization shows that the agency relies on the performance of other players to measure its performance. The publisher uses its resources to achieve the heights that would make it gain a competitive advantage over other operators. The company strives to achieve competitive advantage by focusing on the production of women romance novels which is not familiar with other operators.

Performing a SWOT analysis will help one gain an extensive knowledge of the internal environment that influences performance. One of the evident strengths of the company is that the editors work hard to produce works that are free from errors and that the work is of high quality. The editors assess various elements of the writings including the plot, characterization, storyline, setting, level of romance in the story, the amount of fantasy, and level of imagination. The evaluators also spend considerable time and energy to consider the effects of the individual and social problems that emerge stories and also ensure that the work has an ending that will have some impact on the reader. The evident weakness is that the publisher lacks proper value chains in other nations which force it to hire distributors in some foreign markets thus adding to the expenditure. Harlequin should take advantage of a large number of people who read its books to come up with better services that would attract more readers. The team should also maximize the opportunity MIRA provides to become more influential in the market. Finally, the treat that might affect the business activities is no care is put to remedy the situation is the emergence of competitors who are equally appealing.

The publisher has its distribution channel in Canada but employs distributors in other parts of the world to sell the business products. The organization, for example, hires Pocketbooks to be in control its distribution romance series in the U.S. The publisher also offers books to mass merchandisers, bookstores, supermarkets, and drugstore, apart from using the Harlequin’s Reader Service Book Club to provide direct-to-reader services (Ivey Publishing, 2003). The publishing firm also divides responsibility among different leaders who focus on their area of service. Maher (2017) mentions that at Harlequin, the current president and CEO take the leadership and below him are officers such as the company’s chief digital officer, the general manager of global operations, and the managing directors of branches in different nations (Mahar, 2017). The company also provides positions like the editorial director, director of new product development, director of retail marketing, and vice-president of market research and analysis among others. Finally, it is important to mention that performing an internal investigation is vital to an organization because the process enlightens on the areas that require improvement although the procedure may need time more time and resources.

Business-Level Strategy

The company as already indicated has a significant market share in Canada and other parts of the globe where the organization functions. The firm manages to conquer the market because of the excellent quality, predictable sale traffic, and the ability to offer affordable products. The report by Ivey Publishing (2003) indicates that the number of romance novel sales in North America have increased since 1985 to 1990 with the publisher selling 77 million copies in 1985 which further shifted to 85 million copies in 1990. The market share for Harlequin during this period surpassed that of other publishers thus showing the publisher’s position in the market. The chart below provides a summary of Harlequin’s romance novel sales in North America compared with other players;

  1985 1986 1987 1988 1989 1990
Harlequin series
romance
77 79 80 82 83 85
Other romance series
publishers
12 12 13 13 14 14
Single-title romance
books by other
publishers
72 79 86 94 102 112
Total romance books 161 170 179 189 199 211

Romance novel sales in North America – Source: Ivey Publishing, 2003

Functional-Level Strategies

The functional strategies at the company play an important role in marketing the company’s activities. The publisher adopts a marketing technique that it feels will make it reach its customers most quickly and conveniently. The firm started by marketing its products on TV but later focused on print media. Harlequin settled on some of the leading women magazines such as Glamour, Good Housekeeping, and Cosmopolitan and magazines that focus on general topics such as People. The company also set lower prices ($4.40) compared to the $7 set by other competitors that attracted many readers (Ivey Publishing, 2003). The functional-level strategies at Harlequin are set to meet the consumers’ wants.

Corporate-Level Strategy

Harlequin engages in activities at the corporate level with the belief that it will improve its services. The management agreed to be part of Torstar after entering into an acquisition deal. The firm later comes to an agreement with S&S which enable it to acquire Silhouette which is one of the leading imprints for S&S. The deal also allowed S&S to become the leading distributor for Harlequin’s series fiction in the U.S. The deals Harlequin forms are strategic and beneficial to its activities because according to the article by Lundan and Hagedoorn (2001) forming partnerships with other organizations create the opportunity serve more customers and also makes it easy to handle challenges. Even though the company loses its sole authority by becoming part of Torstar, it still retains its loyal buyers.

Expansion Strategy

The company feels that transforming its form of packaging will enable it to venture into the international markets where buyers have different views and likeness. The firm believes that making its products different from the traditional single-title publishers regarding content, basic formatting, size of artwork, and length will not only make its product consistent in foreign markets but will also facilitate the process of penetrating into the new markets (Ivey Publishing, 2003). The expansion will see the publisher increasing the number of pages from the current 192-256 pages to 250-400 pages as a way of introducing something new at the international level.

Recommendations

The company should consider several factors if it has to deal with the current and future problems. First, Harlequin should maintain its production of quality works because this is what many customers want. Gashti et al. (2011) assert that consumers would be willing to pay higher amounts of money if the quality of the products they acquire is of high value. The team, therefore, should work towards improving its quality if it aspires to remain relevant for many years to come. The company should also focus on expanding its activities in other areas such as the Asian-Pacific region and Africa where it appears to have little impact. The leadership at the company should borrow the example of other leading players in the industry such as S&S and Kensington that are liaising with imprints in America and beyond. Finally, the company needs to adopt the concept of business forecasting which is appropriate in predicting future changes in the market. Using the tool will allow the business planners make appropriate plans when it appears that hard times might surface in the coming months or even years.

Update

The description of the activities by Harlequin in the 20th century indicates that the company is headed towards the right direction. The leaders at the organization need to focus on proper ways of improving their services and focus on what the future markets might require. The management should look at past trends and use the information to predict future scenarios. The team should not relent in its services and should always to ready to deal with the constraints it encounters while handling its operations.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preparation Questions

Question One – Why it is difficult for competitors to Imitate Harlequin

Many book publishers have over the years attempted to gain entry into the segment in which Harlequin operates but they all withdrawn. S&S tried to enter this area during the 1980s when the romance wars were at the peak, and it succeeded in dominating the U.S. market shares because of its pride as a sizeable single-title publisher with founded paperback distribution. Loriana  Sacilotto who is the director of retail marketing at the company explains that several reasons explain why other players do not achieve the same standards as Harlequin. The main reason according to the director, however, is that whereas the others pay attention to a broader perspective, Harlequin focuses on women’s fiction. The leader further states that the other operators do not have the same consumer relationship and trust as Harlequin.

Question Two – The differences and similarities in series romance business and traditional single title fiction

The production of in series romance business and conventional single-title fiction have some similarities and differences that readers must understand to be able to choose what suit their desires. The first similarity between the two forms is that they all focus on a particular theme or themes depending on the writer’s choice. The second analogy is that a publishing house must oversee the authors’ works before recommending it for sale. The two types, however, differ in the sense that whereas the story in series romance continues from one chapter to the other, single title fiction focuses on a single story from the beginning to the end.

Question Three –Harlequin’s contribution to the single-title business

The joining of the single-title market by Harlequin is likely to introduce some changes in this area. The operators in this sector are expected to pay more attention to coming up with high-quality works when new entrants present this form of production to maintain a steady rate of sales. The publishing house will also add new styles of developing romance women fiction. Finally, Harlequin’s ways of production are likely to influence how the other players build relationship and trust with the buyers. The company should use its resources and expertise to venture into the single-title market because it seems that many readers prefer the stories that end in one publication to the series. It also appears that many authors are operating in this area which means that Harlequin will have increased operations and more returns.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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References

Gashti, M., et al. (2011). Study the effects of customer service and product quality on customer satisfaction and loyalty. International Journal of Humanities and Social Science, 1(7), 253-260.

Greco, A. (2004). The book publishing industry. New York, NY: Routledge

Ivey Publishing. (2003). Harlequin enterprises: The MIRA decision. Ontario: Ivey Publishing.

Lundan, S., & Hagedoorn, J. (2001). Alliances, acquisitions, and multinational advantage. International Journal of Business, 8(2), 229-242.

Maher, J. (2017). HarperCollins, Harlequin shift executive leadership. Retrieved from https://www.publishersweekly.com/pw/by-topic/industry-news/publisher-news/article/73907-harper-restructures-international.html

Mathooko, F., & Ogutu, M. (2015). Porter’s five competitive forces framework and other factors that influence the choice of response strategies adopted by public universities in Kenya. International Journal of Educational Management, 29(3), 1-18.

Mwangi, M., et al. (2014). The application of porter’s five forces model on organization performance: A case of Cooperative Bank of Kenya Ltd. European Journal of Business and Management, 6(16), 75-85.

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