Essay About Traditional Book Industry And High Volume

Harlequin
CASE 9 – Harlequin1. Why has it been so difficult for competitors to enter Harlequin’s market segment?What aspect of the value chain create Harlequin’s advantage?        Traditional book industry:Well-known authors, innovative storiesRisky because success on a book is not guaranteed.Marketing costs for each book (focus on the author)Percentage of returns is high on averageEach book is differentPublishing rightsBook storesValue chain of Harlequin:International successThey have a lot of cash[pic 1]Authors:>100Know how to write Hq storyNot well-knownEditing:Editors check that the content matches with what Hq novel should beProduction:Same formatAlways 192 pagesCost efficienciesLarge volume, production is cheapFixed amount of novels/monthMarketing: Concentrated to the target consumerMarketing on a “brand” and not every novelDistribution & Sales:Supermarket and drug stores (occupied self-space)Book clubPrice is lowHigher predictability of sales, lower return rate.Standardization all the way: content, length, size, basic formats.Consistency (quality)Price /cost (same size, high volume)Brand (Sell the brand instead of writers) Consistent product. First mover advantage for shelf-space.The ones that are important are the ones difficult to imitate.Authors and editors have the knowledge. Why hard to imitate? Tacit knowledge: you know how to do sth but not able to explain it to therefore copy. Learnt though experience. Same target market: females over 15 -> they know their target very wellMass market focusDistribution: in supermarkets, standard packaging, monthly standing order system through Pocket Book DistributionHard to copy because of self-space in supermarket (entry barrier)Harlequin model advantage – key driversLower riskLow cost and higher marginFaster (in time) to get to the marketKnow well the customers as they are well defined → adaptation to the segment is easierSend a consistent signal about the brand → you know as a woman that you are going to enjoy it, you know what you are buying. Supermarket distribution: very unusual way of buying book but very successful → one key driverWhat could they do:Diversify: –         Product (movies, magazines, medical novels)