To: Harlequin Enterprises
From:
Subject: The MIRA Decision
Date: September 13, 2014
CRITICAL ISSUES
The launching of MIRA is a big decision for Harlequin. Mira is a new line of single-titled women’s fiction novel. Harlequin needs to develop and execute new strategies in order for them to explore and be successful in the new single- titled women fiction market compare to their series romantic novels.
The primary critical issue facing Harlequin is the "steady loss of share in a growing women's fiction market", due to the growing popularity of single-title novels. With the volume sales dependence that is inherent in series publishing, the unit sales stalling that occurred in the late 80’s and early 90’s acted as a warning signal to Harlequin. While Harlequin was the dominant and very profitable producer of series romance novels, research indicated that many customers were reading as many single-titled romance and women fiction books as series romance novels. A change in pricing strategies enabled revenues to continue to rise, but this was a short-term solution and Mira has the potential to become a long-term solution. However, there are a number of issues surrounding the launch of Mira.
Conversely, Mira represents an extremely high risk undertaking for Harlequin with significantly higher costs for production, distribution and marketing. A single-title novel is a unique product, which requires a publisher to generate higher per-unit sales volumes; create individual design, marketing and promotion campaigns; and provide higher returns to authors and third parties.
Production changes, at least in terms of product dimensions, could have significant unforeseen impacts on the economies of scale currently enjoyed within the production and distribution supply chains. If Mira is to compete with existing single-title publishers, long-term author contracts, royalties and advances could put extreme financial pressure on Harlequin and represent a significant level of investment, which may or may not be realizable in the long-term.
Distribution chain within the U.S, Harlequin mostly relied on Simon and Schuster’s sale force. Since Simon and Schuster was a major single –titled publisher they may not know how much support MIRA would be afford.
Limited diversification, Harlequin has little expertise in the broader realm of women’s fiction outside of the romance genre, which may limit their abilities to select and develop successful authors and titles, as was the case with the 1987 Worldwide Library failure. Although, the worldwide experience gives Harlequin a true appreciation of their strengths and provides a strong foundation from which to avoid future mistakes.
Another critical issue that Harlequin must look at is the recruiting of talented authors and editors who are well vest in the writing of single –titled novels
Therefore, the failure of a single-title novel to achieve break-even sales targets has far-reaching consequences; and can seriously damage reputations upon which future sales would depend.
.RECOMMENDED STRATEGIES
The following recommended strategies will help Harlequin in the MIRA decision.
The addition of a single titled novel would make a welcome contribution to overhead cost. The current overhead cost was $0.09 per book. Harlequin already have infrastructure in place so therefore the introduction of MIRA will not pose additional indirect cost for the company. MIRA do not need new infrastructure to operate.
Strategy #1: Redevelop its distribution chain within the U.S.
Single-titled women’s fiction required more mainstream distribution focusing on retail bookstores. In addition standing order distribution, a hallmark of Harlequin’s series romance business model would have to be abandoned in favor of relying on orders generated by the distributor’s sales force for single-titles. Success in the United State will be a key for MIRA so therefore Harlequin needs to consider offering better margins to its distributors especially Simon and Schuster sale force than those it offered for series romance distribution.
Leverage with retailers, access to mass market. Retailers should be encouraged to shelve MIRA books separately from the series offering.
Strategy #2: Ability to recruit the most talented writers from the hundreds of would- be writers. Giving harlequin series authors to write single title in-house; leverage the authors strengths through career development, then providing incentives not based on price of the book since the price of the book is low.
Back-listing books can help improve brand imaging and promoting developed authors.
Adequate promotion of authors is important for managing costs
.Strategy #3: Tapping into Harlequins extensive backlist collection.
Harlequin need to tap into its extensive backlist collection of novel and reissue a selection of novels by current best selling authors currently signed with rival single title publishers. The physical size and page length of the book could be extended from 192 to 250 pages by adjusting format. Also a new MIRA branded cover could be produced to repackaged the book.
Strategy #4: Expand beyond the romance genre. If MIRA targeted women’s general fiction and women’s romance fiction they would appeal to 81% of the total women’s fiction market. This means that MIRA should expand beyond the romance genre. This will bring diversity and women always want a change or something new.
According to the market research, “customers were reading as much single-title romance and women's fiction books as series romances.” This implies that there is significant overlap with other subject areas and market segments within Harlequin’s existing readership base and it should be possible for Harlequin to cultivate their customer loyalty and translate it to direct-to-reader sales in other genres. The critical issue here is that the demand for single- titled women fiction continues to grow while demand Harlequin series romance remains stable. This actually means that with time the demand for the single- titled women fiction will surely overtake the demand for harlequin’s series romance books.
Harlequin had a strong distribution networks for its series romances through supermarkets, drugstores and discount department stores. Mira books will be heavily distributed in bookstore using the same channel as the series product. If retailers shelve the book separately it will draw a lot of attention from customers. It is conceivable that successful single-title authors who published their early works with Harlequin could be convinced to return to Harlequin, depending on the financial incentives; but, this is a long-term question, governed by authors’ contractual obligations and the success of Mira in the short-term. However, the back-list of novels created by successful authors who published their early works with Harlequin comprises an easily marketable, cost-effective and potentially profitable resource, that would enable Mira to capitalize on established reputations and in-direct public. Also Harlequin authors and editor relations remained strong Harlequin has the resources and capabilities it needs in order to succeed with Mira. Although the company currently has a different business model, it has the same basic components and critical resources necessary to create and manufacture the product
ACTION PLANS: (Completion times may be concurrent and not contiguous)
Strategy #1: Redevelop its distribution chain within the U.S ACTION | RESPONSIBLE TEAM | COMPLETION TIME | 1.Select market experts and do pilot test on its distribution chain | Chief Executive OfficerMarketing DirectorChief financial OfficerChief Operating Officer | 3 Months | 2. Decide on distribution points within the United State with concentration bookstores. | Chief Executive OfficerChief financial OfficerChief Operating Officer | 3 Months | Evaluate the result of the pilot project | Chief Executive OfficerChief financial OfficerChief Operating OfficerChief Editor | |
Strategy #2: Ability to recruit talented authors ACTION | RESPONSIBLE TEAM | COMPLETION TIME | Recruit talented authors and select authors to write a single title novel in-house | Chief Executive OfficerChief financial OfficerChief Operating OfficerHuman Resource Director | 6 weeks | Leverage the author’s strength.Provide incentive for them to stay | Chief Executive OfficerChief financial OfficerChief Operating Officer | 3 Months |
Strategy #3: Tapping into Harlequins extensive backlist collection ACTION | RESPONSIBLE TEAM | COMPLETION TIME | Identify and select which books could be back listed. | Chief EditorChief Operating OfficerChief Financial OfficerAuthors | 6 Weeks | selection of novels by current best selling authors currently signed with rival single title publishers | Chief EditorChief Operating OfficerChief Financial OfficerAuthors | 6Weeks |
Strategy #4: Expand beyond the romance genre ACTION | RESONSIBLE TEAM | COMPLETION TIME | Give attention to writing both women general fiction and romance novel | Chief EditorChief Operating OfficerAuthors | 3 Months | Identify what may appeal to the consumer | Chief EditorAuthors | 3Months |
JANE ATTIPOE
MGT 696. ADMINISTRTIVE POLICY AND STRATEGY
HARLEQUN ENTERPRISES: THE MIRA DECISION
