Strategic Analysis - Harper Collins Publishers Company - Case Study Example

Strategic Analysis Report on HarperCollins Publishers Company Name Institution Date Table of Contents Table of Contents 2 Introduction 3 Analysis of the External Environment 4 Rivalry 4 Threats of Substitutes 4 Buyer’s Power 5 Supplier’s Power 6 Threat of New Entry 6 Analysis of the Internal Environment 7 Economic and Creative Advantages of HarperCollins Publishers 7 HarperCollins Publishers’ Creative Strategies 9 Ethical Analysis of HarperCollins Publishers strategies 11 Recommendation for HarperCollins Publishers’ Future Strategic Development 12 Conclusion 13 References 14 George, M. (2010). Understanding Business Environment (Macro and Micro-Business, Competitive Advantages, Porter's Five Forces and Limitation Of Porter's Five Forces. Business Environment. Vol.1. 15 Hill & Jones. (2001). Strategic Management An integrated Approach. New York: Houghton Mifflin. 15 Porter, M, Argyres, N, & McGahan, A. (2008). An Interview with Michael Porter. The Academy of Management Executive. Vol. 16:2:44. 16 Introduction HarperCollins Publishers was established in 1819 by William Collins and Charles Chalmers in Glasgow. The company had to prevail over several early hindrances and Charles left the business in 1825. In 1841, the company somehow stabilized as a printer of bibles and in 1848, the company became an established publishing venture, where it specialized in publishing educational and religious books. In 1917, the company began publishing fiction works, for example Agatha Christie’s first books as well as other fiction books were published from this firm (James, 2008). In 1999, News Corporation bought the Hearst Book Group including William Morrow & Company as well as Avon Books. In due course, HarperCollins Publishers has become a diverse and creative company. It published diverse titles, consisting several aimed at a young audience. It is the publisher of best-sellers including Coraline by Neil Gaiman and Scott Adams' Dilbert books. HarperCollins Publishers publishing groups consist of HarperCollins General Books, HarperCollins Children's Book Group, as well as HarperCollins UK. In addition, the company also has international operations within Canada, Australia, and also India. Its Zondervan entity publishes Bibles along with Christian books. HarperCollins Publishers also sells e-books from its website and through further online retailers (Katie, 2010). Analysis of the External Environment External environment has a direct impact on the strategy of any organization. Porter’s model offers an outline that impacts competitive environment as well as access the configuration of competition and opportunity. Porter’s five forces model include Rivalry, Threat of substitution, Buyer’s power, Supplier’s power in addition to Threat of new entry (Porter, Argyres, & McGahan, 2008). Rivalry HarperCollins Publishers has several competitive rivals within publishing industry, such as Penguin Publishers, Random House, Pan Macmillan, and Pearson Education among others. HarperCollins Publishers and its competitors compete among themselves on factors such as price, quality, product and place. According to Porter (2008), competition is deemed as the most powerful of all forces, competition among competitors drives proceeds to zero. This kind of competition among these publishing companies within the publishing industry has an effect on their profitability. For instance, for HarperCollins Publishers to retain their clients they introduced heavy discounter strategy which consequently, HarperCollins Publishers discloses its worst performance sale within UK since the most recent depression because of heavy discounter (Porter, 2008). Threats of Substitutes Product substitute is the product one can get within another company within the same industry; this can be because of the differences within price as well as quality of the products being substituted. Within the UK, the publishing market has been allied with a high competitive environment particularly with the high intensity of substitute’s products available. Because there is presence of large substitute products which may result in HarperCollins Publishers losing some of their clients which consequently will have an impact on its market share (Machin & Thompson, 2003). Currently, Penguin Publishers remains HarperCollins Publishers’ greatest competitor. HarperCollins Publishers competitive advantage in regard to its ability to seek out low cost production opportunities which offer a benefit to the consumers in the form of reduced prices compared to new or smaller publishing companies. All this has enabled HarperCollins Publishers to retain its clients as well as maintain its position in the market as the leading publishing company within UK (Porter, 2008). Buyer’s Power Porter, 2008) notes that the buyer within a company is the clients who buy its products. If clients are strong, there is a probability that competition between companies and hence there influence will tend to be weaker. This implies that the power of buyer will be determined by the number of clients. HarperCollins Publishers buyer’s power is strong where the buyers demand lower price and high quality books and other services from the HarperCollins Publishers. Since HarperCollins Publishers is aware that the customers can move to another publishing company, HarperCollins Publishers introduced heavy discounter which had an effect on their UK sales performance within 2010 (Katie, 2010). Supplier’s Power Supplier’s power affects the organization’s production costs as well as impacts value developed by an industry. A strong supplier determines the price of the company’s products. This is because suppliers are the strongest in case switching costs is high, if precuts do not have or have few substitutes and also when the organization is dependant on the suppliers (George, 2010). Nevertheless, within HarperCollins Publishers, the company is more powerful than its suppliers which the products’ price are compromised and this keeps their production costs low which drive HarperCollins Publishers definite products price low, for the company to retain and maintain market share within publishing industry. For instance, HarperCollins Publishers’ suppliers once complained that the retailers were not allowing them to raise their price (Porter, Argyres, & McGahan, 2008). Threat of New Entry Threat of new entry refers to the threat of impending competitors aiming at entering the market and influence the profitability of the industry to gain market share which is dependant on the capacity of the company to enter the market. The main barriers preventing potential competitors of HarperCollins Publishers to enter the publishing industry include government policies, high costs of entry, promotion and advertising costs (Laermer, 2008). For example, recently HarperCollins Publishers launched an extremely costly advertising campaign and such action can scare away small publishing companies from entering the market. Another example is that HarperCollins Publishers publishes its books in bulk and hence this generally lowers the production cost, and as a result their books are relatively cheaper and thus it would be extremely difficult for small publishers to enter the market and compete with HarperCollins Publishers (Lydia, 2009). Analysis of the Internal Environment Economic and Creative Advantages of HarperCollins Publishers HarperCollins Publishers basically generates its money through charging author fee for various services, which include custom cover design as well as marketing and distribution to online retailers. It also delivers the books for sale to its customers. The company allows the author to develop the book free, but then generate their profits on printing mark up as well as through splitting the profits with the author. The most enticing characteristic with HarperCollins Publishers is that the authors find it easier for their books to be put on the market. This is because it is a well known company and the customers are more willing to buy books that have been published by such a renowned and trusted publishing company. The company also distributes books for sale for its clients, which is also an advantage to the company since this is an appeal a number of authors (Coyne, & Sujit, 2006). HarperCollins Publishers offers a wide collection of tools and service to enable the authors to make their own choices during the publishing procedure. The authors publishing with this company retain all their rights, retain editorial control and also they are at liberty to decide the precise selection of services that best suits their objectives. As a result, HarperCollins Publishers allows all its authors to control their own publishing destiny and this has earned the company steady and numerous clients (Coyne, & Sujit, 2006). HarperCollins Publishers assists authors in self-publishing numerous titles and hence irrespective of whether the author is writing a religious book, fiction, educational, juvenile, poetry or any other genre, the company helps them reach their publishing aims. Through the company’s exclusive publishing procedure, the authors are able to maintain control of their books. From editing as well as proof reading to cover design and page layout: from royalties and distribution to marketing and return-ability, the authors with this company are entirely able to decide on what they want for their books. Moreover, the company has a personal team of author advocates that supports and encourages the authors throughout the entire publishing process. Because HarperCollins Publishers provides a wide range of professional editorial, marketing as well as publishing services, they normally offer their clients the best services and hence the books are able to compete effectively within the marketplace. Through the company’s Libraries as an initiative of publishers, the company is efficient in handling the needs of special vertical industries as well as educational presses through supporting digital efforts and availing critical historical collections for sale online and also through other retail channels (James, 2008). Furthermore, HarperCollins Publishers has several economic advantages which include brand recognition, a larger marketing budget, which includes great marketing, editing as well as design, bigger print runs, and larger advances and also better distribution of the published materials to the book stores and clients. The company also offers large advances to its clients and hence it is likely to attract more customers meaning higher returns to the company (James, 2008). Moreover, since HarperCollins Publishers is a big publishing company, it has lower production costs. As a result, it is able to sell its published books at much lower prices; yet it is still able to pay larger royalties as well. James (2008) explains that, “more people buy their books since the lower price is an advantage to the clients and hence the company increases its returns in a big way.” Additionally, HarperCollins Publishers is a big company and hence it is less likely to run out during a critical time, in case there is sudden surge of publicity. Finally, the fact that HarperCollins Publishers is a renowned company attracts a lot of clients. Honestly, many authors would pride in having their books published by such a renowned company. This is because brand recognition has numerous benefits to the authors. The blend of the brand, the publisher's connections and a larger marketing budget provides a much better chance at big sales, media appearances and selling foreign, movie in addition to TV rights (James, 2008). Nevertheless, the key driving force of HarperCollins Publishers is its clients. In all interactions, the company strives to go beyond expectations; it has employees who carefully listen and respond, while making use of information, practical products in addition to quality services. Consequently, HarperCollins Publishers continues to grow and make innovations in publishing industry with a new vision, special programs and incomparable opportunities (Rainer & Turban, 2009). HarperCollins Publishers’ Creative Strategies HarperCollins Publishers offers Full Color Book Publishing. The company assists the authors in publishing almost anything in full color. From juveniles’ books to educational books, family photo albums to commercial materials, graphic novels to catalogues; generally, the services opportunities are inexhaustible. With seven entire full-color books publishing packages to select from, HarperCollins Publishers makes the authors decision to publish simple and straightforward. The company also offers a broad range of additional services and as Hill & Jones (2001) explain, this provides authors with more flexibility. To even simplify the publishing procedure more, the company’s competent publishing consultants are available to provide free consultation to assist the authors to pick the package that is right for them. Most authors as well as other clients acknowledge that publishing their full color book at HarperCollins Publishers; they are choosing the world’s most affordable and convenient route to accomplishing first rate digital color publication. “Once the books are published, the company avails them to the readers as well as booksellers worldwide within a beautiful, full-color edition and hence the company’s clients get a royalty on every copy bought by their audience” (Rainer & Turban, 2009). HarperCollins Publishers while publishing its books creates the finished Ad: through using computers and design. It utilizes software like Adobe Photoshop when creating images and also texts. Since these applications are able to manipulate images, the employees are able to create interesting eye-catching texts and visuals. Still, HarperCollins Publishers concentrates most on the author and the book. More than just the authors and books, the books the company publishes, it also publishes the idea of the book. The initiative of an individual’s unlimited and surprising creativity, daring and singularity; these are the key attributes that are easy to identify, from the imagination of the author, to the vision of the author. When the company’s employees identify these attributes, they identify all of the possibilities, inexhaustible as well surprising HarperCollins Publishers has an experimental unit that does away with the conventional profit distributions to authors. The approach HarperCollins Publishers takes is to provide less or no advance, but as an alternative split the profit by 50 percent, instead of the industry standard of fifteen percent with the author (Katie, 2010). To add on that, HarperCollins Publishers has web approach that is extremely critical to its publishing activities. In order to heighten book sales and reach the online market, the company provides a browsing feature on its website, where clients are able to read selected extracts from books before buying. Moreover, HarperCollins Publishers provides books’ excerpts to mobile phone users. The company was the first one to market using an innovative approach slushpile management with the beginning of the authonomy website (James, 2008). Ethical Analysis of HarperCollins Publishers strategies HarperCollins Publishers offers relaxed work atmosphere. According to the company’s employees, the workers are not pressured to get things done. The managers have confidence in the workers capacity to perform the jobs they were recruited to do therefore the tasks are not micro-managed. The working environment is very relaxing and casual. The company lets the workers have a great life balance. The company offers summer Friday hours to the employees (Maury, 2009). In addition, HarperCollins Publishers gives the employees great benefits package as well as a fairly accommodating attitude towards time off. The company had a lot of talented people who develop marvelous books. A solid reputation of great titles and an instantaneously recognizable company name. This company is also gender sensitive, for example it has a large female employee network, even though this is the standard within the industry. The previous HarperCollins Publishers employees also confess that the company has very fair working hours and a good-life balance. Most individuals are friendly and the overall culture in the company is very nice. HarperCollins Publishers is a very well respected company, looks great on resume, at attracts great authors, it’s a casual work atmosphere, benefits are pretty standard when compared to Coach House (Maury, 2009). Recommendation for HarperCollins Publishers’ Future Strategic Development HarperCollins Publishers should consider substantive audit as their main strategy in their operations. This is an analysis and recommendations procedure. Therefore, the management within the HarperCollins Publishers should evaluate the publishing needs of the company, content life cycle procedures in addition to the content. The recommendations are important to the company since they empower the company to optimize its content life cycle, take full advantage of content reuse and also chose the appropriate publishing technologies”, (Europa Publications Limited, 2006). The publishing strategies should include, analyzing the publishing need, content life cycle, auditing the content, analyzing the needs of the customers, tools selection as well as analyzing the marketing and returns and also how the books are received by the audience at large (Samuel, 2005). Analyzing the publishing requirements will assist HarperCollins Publishers in identifying the business goals, isolating the problems, identifying the challenges to be overcome and finally establishing success criteria and corrective actions required to move the industry forward. Eventually, it will be possible to identify the content management opportunities, establish the strengths and weaknesses and aid the industry in establishing a foundation on which to build success (Bob, 2006). On the other hand, the content life cycle analysis is important in identifying the problem areas allied to the creation, management and delivery of the content. Identification of the problems up front will assist the company in: determining the scope and functionality of the company’s unified content strategy, establish the criteria for selecting appropriate publishing and software tools.” Identification of the problems also defines the procedures that should be redesigned or created from scratch in order to support all publishing needs”, (Albert, 2005). It is also important to analyze the clients’ needs since this will help in the identification of the content requirements of the clients and recommend tactics that will help HarperCollins Publishers in developing a unified content strategy designed to fulfill those needs. The customer-needs analysis includes client research as well as client surveys. Furthermore, tool selection and report is valuable to HarperCollins Publishers in that it helps them select the publishing tools, for example, authoring processes, content management, workflow in addition to delivery, that best match the company’s special criteria (Raymond, 2003). The identified requirements are combined within the substantive audit in order to establish the tools that best meets the company’s needs. Finally, HarperCollins Publishers should analyze a report on return on investment, which will assist the company in determining the potential return on investments for their operations. Return on investment is based on the companies’ main opportunities for saving as established with the substantive audit and cost of both tools and implementation, in addition to additional elements including design, training and also content conversion costs. The report will also serve as a major component for HarperCollins Publishers’ business operations (Albert, 2005). Conclusion HarperCollins Publishers is the leading publisher within the UK by making use of its competitive advantage to compete effectively with its competitors as well as its rivals. For HarperCollins Publishers to retain and increase its market share, the company is supposed to be on look out of its potential competitors and rivals. Currently, there are many large publishing companies aiming at overtaking HarperCollins Publishers and gain greater market share. Therefore, HarperCollins Publishers ought to maintain or improve its competitive advantage by using a strategy of competitive pricing in addition to expanding its market and portfolio to maintain its leading position within publishing industry. Finally, PESTEL analysis and company’s structure are other aspects impacting the stability and competition of a company. This implies that HarperCollins Publishers should consider these aspects particularly within government policies and technology changes, for the company to align with the regulations governing business practice, since such practices can comprise their reputation and position within the market. References Coyne, K. & Sujit B. (2006). Bringing discipline to strategy. The McKinsey Quarterly. Vol. 4/1. Europa Publications Limited. (2006). International who's who of authors and writers. New York: Routledge. Laermer, R. (2008). Punk Marketing, Journal of Consumer Marketing. Vol. 24/7. Katie H. (2010). Publishing industry. Key Note market review. London: Key Note Ltd. George, M. (2010). Understanding Business Environment (Macro and Micro-Business, Competitive Advantages, Porter's Five Forces and Limitation Of Porter's Five Forces. Business Environment. Vol.1. Albert G. (2005). The book publishing industry. New York: Routledge. Bob, A. (2006). The Adams jobs almanac. Toronto: Bob Adams, Inc. 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