HG495 – Case Analysis
This case analysis will be focused on the company QVC (Quality, Value, and Convenience). We will perform an analysis review, which, will provide a comprehensive insight into the company’s historical and current business structures, strategies and efficiencies in their operations. It will include a detailed SWOT Analysis (Strengths, Weaknesses, Opportunities and Threats) (Humphrey) and the primary activities of the Value Chain Analysis (Porter), to provide greater insight into the firms’ competitive advantage. These key concepts will be used to analyze QVC’s business model, define potential challenges and initiate a plan of execution. We will then recommend solutions such as advocating products with higher profit margins, finding evolving technologies and untapped markets and streamlining logistics. These strategies would expand the customer base and create higher ROI (Return of Investment), positioning the company towards timely growth.
QVC is a multimedia retailer, specializing in televised home shopping, broadcasting in five countries (US, UK, Germany, Japan and, Italy), 24 hours a day, seven days a week, to over 90 million households in the United States and 160 million homes worldwide. They offer a wide range of products with over 1500 major brands and 50,000 products, including beauty, fashion and accessories, jewelry, craft and leisure, home electronics, garden, and do-it-yourself (DIY), and clearance goods. The company has store operations in the US, which includes Delaware and Pennsylvania. QVC also has a lucrative website called iQVC (www.qvc.com) that generates over 1 billion of sales on its Internet operations. Since it was launched in 1986; QVC has rapidly grown to become the largest television shopping network. By 2006, its reach had extended to over 95 percent of all U.S. cable homes, as well as, over 25 million satellite homes. It shipped over 140 million packages during 2006 to customers around the world, resulting in almost $7.1 billion in sales and over 1 billion operating profit. Sales were made to over 10 million customers, who watched its shows across the US, UK, Germany, Japan and Italy.
Doug Rose, QVC’s vice president of merchandising brand development, claims that the interactivity in all aspects of the firm’s business and operations, including its television shopping channel, will need to become more pronounced. Making it easier for customers to act on what they see. QVC believes that it still has a lot of room to grow, since only about 2% to 3% of its television viewers currently purchase at any given time. Bringing that percentage higher is the main problem that affects the major revenue stream and would require an internal/external analysis (balance scorecard) to bring in new viewers/customers to purchase their products. There are other challenges that can attribute to generating more revenue, such as, selling products with higher margins and offering shopping channels to customers outside North America. They could also add more interactive features that would allow more access. Providing solutions to these challenges would create “big steps” in creating billions more in revenue and continued growth, further distinguishing themselves from their competitors.
To further analyze QVC’s challenges, we must take an analytical approach in identifying the key Strengths, Weaknesses, Opportunities and Threats of the company’s historical data, current business structures, past generated revenue, strategies and efficiencies of operation to further identify solutions.
• QVC has mostly exclusive products (1,500 brands and over 50,000 products). • QVC is on-air 24/7 yet operating expenses are relatively low. • More economical than direct mail, print advertising, or traditional retail stores. • Good quality control of products they...