Harlequin Five Forces Analysis
Threat of Entry
High economies of scale required. For an entrant to gain success in romance novel market, it must possess mature sales, production, and distribution to operate effectively, which also leads to great risk. High product differentiation required. Other companies start to add more features while Harlequin products remain relatively unchanged. Significant capital requirement required. This is evident in Simon and Schuster’s case, in which it bears a high upfront investment for this battle. Access to distribution channels is medium to difficult. Harlequin has gained exclusive access to groceries, but failed on stand-alone retails. Other competitors either choose regular bookstore or similar as Harleuqins’; however, it might be difficult to entrants to gain access to these channels by themselves. Government policy has been very protective to authors; however, no clear restrictions on product images.
Increasing buying power due to additional competing products Low switching cost
Changing target markets
A variety of choices
Poor retention rate, high return rate
Loss of existing customers and high cost of attracting a new customer American Romance Series to meet consumer’s tastes
Threat of Substitutes is high due to technology advancement and demand diversification. Evident in Harlequin’s attempts of film, magazine and scholar’s choice (bookstore). Suppliers Power
Increasing supplier power due to promising offer from Simon and Schuster Loss of excellent authors who later generate sales for Simon and Schuster shows that authors possess significant supplier power Other supplier powers such as sales force, printing business are relative stable Industry Competitors, Rivalry among existing firms
Low growth rate as more competitors are competing for a stable market other competitors are earning market share at Harlequin’s expenses oligopolistic market is another factor of intense...
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