Harlequin Enterprises free essay sample

The Mira Decision Harlequin Enterprises has dominated the series romance fiction novel market since the 1970’s. Harlequin has fought off every major competitor in this genre and maintained consistent performance for multiple decades. Brand loyalty, worldwide production capabilities, production efficiencies, creative control, and distribution are the strengths that Harlequin utilizes to dominate the series romance genre. Having a consistent product has helped Harlequin establish a loyal customer base with over 70 million readers worldwide. Surveys indicate that four out of five readers continue to purchase Harlequin books the next year. To keep creativity at a high level Harlequin utilizes over 1,300 authors worldwide to develop the stories while the editors maintain strict control to ensure that the product remains consistent. This method allows Harlequin to maintain a high level of creativity and at the same time keep costs low since they do not have to pay up front the millions of dollars single title novel authors require. We will write a custom essay sample on Harlequin Enterprises or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Legal fees for retaining authors are also low for Harlequin since they use standardized contracts vs. custom contracts typical to the single title genre. Harlequin has a very strong distribution, selling and production system. Harlequin distributes and sells its products in two successful ways: direct retail sales and direct mail. Harlequin novels are available in over 250,000 retail outlets around the world. They do not solely rely on the typical â€Å"big box† book stores such as Barnes and Noble; instead Harlequin utilizes supermarkets, drug stores, kiosks, etc. The book dimensions are designed especially for the racks at the supermarkets. The other source of readership comes from Harlequin’s loyal â€Å"Reader Service† book club. Nearly 60% of all books sold in the U. S. were from the book club. Book club sales are sold at full cover price so Harlequin has healthy profit margins from this market. A weakness for Harlequin is that it is the leader in a market that is mature and experiencing slow growth. Harlequin’s entire business model is set up specifically for the series romance genre. According to Donna Hayes, VP Direct Marketing, â€Å"our strengths lie in series romance. † While harlequin series romance sales have increases roughly 9% in five years, single title romance book sales have increased over 35% in the same period. Harlequin has failed in previous attempts to enter the single title romance market. Their Worldwide Library single title romance program was shut down after two years on the market. A result of the Worldwide Library shutdown was the exodus of many of their popular authors. Many of these authors started their careers with Harlequin but left for other high profile single title publishers willing to pay large amounts to win over the authors. Deciding if Harlequin has a competitive advantage can be looked at from two angles both providing different results. In the series romance genre Harlequin certainly has maintained a competitive advantage over the years. It has consistently been the only player in the market as other publishers have tried and failed at the genre. Harlequin has been able to produce higher revenues and growth within this genre better than any other publisher. As previously discussed, it maintains the most sophisticated distribution system and global author team. That is where Harlequin’s competitive advantage ends. In the overall romance novel market Harlequin does not possess a competitive advantage. The series romance industry has very little opportunity to grow which is representative in Harlequin’s slow year over year revenue trends. The single title genre is growing at a much faster rate. Harlequin’s previous attempt at this genre failed. Harlequin is making a wise decision to enter the single title market with the MIRA program. In order to grow Harlequin must enter a market that provides an opportunity to grow. With a better focus and understanding of this genre Harlequin will be able to capitalize on their existing infrastructure to capture a share of this fast growing genre. Management has estimated that the MIRA novels would not create additional overhead costs and their printing costs were going to be $0. 71 per book vs. 0. 88 industry average. At the same time single title novels would bring $3. 38 in profit margin vs. the $2. 42 that series novels bring. Harlequin will also be able to tap their large roster of author’s for single title novel opportunities. Providing their author’s with an opportunity to expand into a new genre will bring Harlequin create loyalty and better relationshi ps with their authors. Utilizing current authors will help Harlequin get a jump start in the single title market by getting their loyal series customer base to start purchasing single title novels which would create instant revenue. This strategy could be phase one and phase two could be reaching out to new audiences at the big box book stores and online. Harlequin has the business model to capture a competitive advantage in the romance novel market. To do this, it must apply its successful blueprint in the series genre and adjust it to the single title genre. This strategy will allow Harlequin to increase revenue and profits at a higher rate than their competitors.