Transcript Industry Analysis for Martha Stewart Omnimedia

Session 1 Group 3
Internal Analysis
Martha Stewart Living Omnimedia
Ayse Cueto, Toi Valentine, Arielle Scoblinoko
Our Name:
IBC
Innovative. Brand. Consulting.
VISION STATEMENT: To be a leading consultancy firm that provides
innovative strategic planning to companies looking to expand their
offerings and enter new markets.
MISSION STATEMENT: Our mission is to be the leading strategic
planning firm that offers services to companies looking to expand their
consumer markets. We strive to provide our customers with quality
insights using the most cutting edge, innovative resources that allows for
seamless transitions or expansions into new markets. By keeping up
with ever changing markets, our goal is to sustain our, and our client’s,
success through consumer and market trend progression.
Competitive Advantage
-Extensive knowledge on entering new markets (strategies)
-Branding strategies
-Ability to break down companies and analyze what parts are successful
and what parts need immediate change
-Create strategies for short and long run benefits
Industry Analysis for Martha Stewart Omnimedia
Session 1 Group 3
1.
High Rivalry- Because there are many firms and much competition, large product
differentiation, and exit barriers, there is a high rivalry for MSLO.
-There are a large number of firms competing in celebrity brand names and household good brands
Oprah
2006 Sales alone $325,000,000. Harpo INC also accounts for other celebrity brands including Rachel Ray, Dr.
According
to a poll conducted by bloggingstocks.com in 2007, 73% said that Oprah was a better media
Rachel Ray
Tyra
Wamsutta
Brand by Springs Global which holds multiple brands in home goods industry. 2006 Sales $2,536,800.
Laura Ashley
An established home brand name sold at multiple retailers internationally. Sales $400,000,000.
Phil.
empire.
-Product differentiation
Multiple design and quality opportunities
”Our products compete in what is for Macys about a $4 billion category. Our goal is to claim 10% of this category”
Martha
Stewart Omnimedia CEO Susan M. Lyne 2/2008. MSO recently bought out fellow celebrity brand,
Emeril Lagasse
Different price points
Martha Stewart products available at Kmart and Macys, main competition includes retailers not supplying MSO
products, Target, Wal-Mart, etc.
-High exit barriers
Public Image
Large amount of money already invested
22.91% of public shares of MSO held by insiders,
Shareholders will be affected
43.60% held of public shares held by institutions
-Price of Market Share
2. Hard to enter industry- Because of the Martha Stewart name and the brand loyalty
that comes with that, it is harder to enter this particular industry of celebrity
brands.
Huge brand loyalty
established network of retailers and products
High absolute cost advantage
Government regulation doesn’t really affect
BARRIERS AND PROBABLITIY
High Risky Returns
Low
ENTRY
High
EXIT
Low
High
Low, stable
returns
Low, risky returns
High, stable
returns
High, risky
returns
3. Low threat of substitute products
Due to high brand loyalty associated with celebrity
Not many substitutes exist in homegood products.
Because there is less competitive threat from substitutes => does NOT affect price as much.
4. Bargaining Power for Supplier
Supplier has some bargaining power because there is only one manufacturer per product type of Martha
Stewart labeled goods
Buyers (Macys, Kmart, independent dealers of rugs, magazine shops) all purchase Martha Stewart Living
labeled products from those particular manufacturers only.
5. Bargaining Power for Buyer- Buyers do not have as much bargaining power as the
supplier because there are many different buyers of Martha Stewart labeled
products, while there is only manufacturer. However, these buyers have many other
relationships with other celebrity brands.
Macy’s, K-Mart, Wal-Mart, Independent Dealers (book Shops, Furniture Stores, etc).
They already have a large number of business partnerships with other brand name labels
Celebrity brand Emeril Lagasse, new partnership with WeddingWire, Jessica Simpson, and other celebrity
brands at Macy’s.
Dominant power in the specific level of retail
other celebrity brands provide a different range of products
Macy’s and K-Mart target different markets and levels of retail.
Competition Among Buyers
Because manufacturer can sell to different reetailers that sell celebrity brands, they can hold more
bargaining power than the buyers.
EX: K-Mart competing against Wal-Mart
SWOT Analysis Overview
Strengths: leverage in both media and merchandise
-several TV shows and websites
-4 magazines
-Sirius radio channel
-15 retail and manufacturing partners
-2 major brands-Martha and Emeril
Weaknesses: very spread out, lacks a focus.
-need to focus more on what could drive most impact
Opportunities: connecting the media and merchandise sides, great
opportunity to expand.
Threats: many of their target markets are suffering in a larger economic scale
-housing slump- less people purchasing homes/home goods
-economic crisis- less spending money -> retail industry in trouble (especially K-Mart).
Intensive Strategies
Market Penetration: This Martha Stewart living ad attempts to increase
product usage, frequency of use, and consumption of Martha Stewart Living
Gardening Products by taking the same tools and marketing them as tools for
Sustainable Living. During a time when Sustainable Living and Organic Food
has become a growing lifestyle and an individual's part in helping the
environment, Martha Stewart Living focuses on this growing trend and
promotes further use of her products in this more significant way.
Market Development: The concept behind this Martha Stewart advertisement
is that men too are consumers of Martha Stewart products, including grilling
supplies, cookbooks and course her TV show and magazines. The visual
attempts to expand and develop the Martha market by opening up new ideas
and specifically reach out to men, a market that has received little attention
from MSO.
Product Development: This Martha Stewart advertisement promotes an
extension of Martha Stewart products into children’s arts and crafts. The
selling point of the line is “easy-clean creative fun.” At this point Martha
Stewart advertises primarily to adults, but this advertisement promoting her
new “easy-clean creative fun” line extension speaks to children and their
parents.
Market Penetration Ad
Use MS gardening projects more than just for a hobby, start using them for a lifestyle.
Market Development Ad
Product Development Ad
Diversification Strategies
Related: Crayola -> kids crafts market
Febreze -> household cleaning market
Unrelated: Goody -> beauty/accessory market
Purina -> pet market
Integration: FORWARD (Martha Stewart Living Retail Store)
GRAND STRATEGY
GRAND STRATEGIES
*Strength/Opportunity (S/O) Based Strategy*
MSLO's strong hold on four major industries affords increased capitalization
based on elevated obsession and awareness of celebrity brand into the
children's arts and crafts market.
*Strength/Threat (S/T) Based Strategy*
The fact that MSLO’s "omnimerchandising" platform has a strong presence in
the home improvement market affords the brand to reduce fiscal effects from
the housing market slump by emphasizing the easy "do-it-yourself" home
improvement products.
Sources
http://www.reuters.com/finance/stocks/companyProfile?symbol=MSO.N
http://www.brandweek.com/bw/content_display/news-and-features/retail
-restaurants/e3ia9dec6e36d9df17442800c3aca3938bd
“Brand Loyalty to Martha Stewart Improving, Research Firm Says.”
By Maria Halkias
http://psucomm473.blogspot.com/2007/03/martha-stewart-rise-fall-and-rise-again.htm
http://www.novelguide.com/a/discover/cps_03/cps_03_00428.htmll
http://phx.corporate-ir.net/phoenix.zhtml?c=96022&p=irol-homeprofile
http://74.125.113.104/search?q=cache:M8m_nOTpWp0J:www.occ.treas.gov/handbook/mis.pdf+management+
information+system&hl=en&ct=clnk&cd=2&gl=us#19
www.marthastewart.com/corporateinformation