Harlequin Case Analysis
CASE ANALYSIS MEMORANDUM - HARLEQUIN ENTERPRISES
May 10, 2013
Name: Asad Jawed
Student #: 135817660
BU601 - T5P
HARLEQUIN ENTERPRISES
To: The Torstar Board
From: Donna Hayes - VP of Direct Marketing
Date: June 1, 1993
Re: the launch of MIRA - single title initiative
Harlequin Enterprises has been able to capture 80% of the series romance market. Our great existing strategy (see exhibit 1) has allowed us to be the biggest player in the series romance market. Now we face the opportunity to capture a rapidly growing market of single-title women 's fiction novels. I recommend that Harlequin aggressively pursue the single-title market, using its extensive back list collection to reissue novels by best-selling authors.
Even though the consistent, well defined product, combined with an optimized supply chain and distribution in the series market has provided valuable margins, the stagnant growth in the series market is insufficient to meet company growth objectives. Operating income is currently projected to grow at 3% for next 5 years (see exhibit 2). With the launch of MIRA, Harlequin can add an incremental $10MM in the next year, and $57MM in the next 5 years. This is 16%-19% incremental profit (see exhibit 3).
We will have to focus on the women 's romance fiction segment of the market. At Harlequin, we have cost efficient printing resources, which allow us the flexibility to print single title. We will need to switch from same format printing, to match the need of each individual title. We also have great editor-author relationships. Using the backlist of best-selling authors will save the company $45MM in the next 5 years in author advances (see exhibit 3). Each unit is more profitable without an author advance. (exhibit 3). We will have to abandon our current process of front-list printing only. Coincidently, our editors will need to cultivate existing series authors into single-title authors, who ensure quality content to maintain our
May 10, 2013
Name: Asad Jawed
Student #: 135817660
BU601 - T5P
HARLEQUIN ENTERPRISES
To: The Torstar Board
From: Donna Hayes - VP of Direct Marketing
Date: June 1, 1993
Re: the launch of MIRA - single title initiative
Harlequin Enterprises has been able to capture 80% of the series romance market. Our great existing strategy (see exhibit 1) has allowed us to be the biggest player in the series romance market. Now we face the opportunity to capture a rapidly growing market of single-title women 's fiction novels. I recommend that Harlequin aggressively pursue the single-title market, using its extensive back list collection to reissue novels by best-selling authors.
Even though the consistent, well defined product, combined with an optimized supply chain and distribution in the series market has provided valuable margins, the stagnant growth in the series market is insufficient to meet company growth objectives. Operating income is currently projected to grow at 3% for next 5 years (see exhibit 2). With the launch of MIRA, Harlequin can add an incremental $10MM in the next year, and $57MM in the next 5 years. This is 16%-19% incremental profit (see exhibit 3).
We will have to focus on the women 's romance fiction segment of the market. At Harlequin, we have cost efficient printing resources, which allow us the flexibility to print single title. We will need to switch from same format printing, to match the need of each individual title. We also have great editor-author relationships. Using the backlist of best-selling authors will save the company $45MM in the next 5 years in author advances (see exhibit 3). Each unit is more profitable without an author advance. (exhibit 3). We will have to abandon our current process of front-list printing only. Coincidently, our editors will need to cultivate existing series authors into single-title authors, who ensure quality content to maintain our