Technology and Innovation

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and publications, this programme will be recorded in front of a live audience, giving Ms. Stewart “the opportunity to meet and interact with those who share our dedication to better living She is also slated to visit viewers at home, listen to their concerns, and assist them with their various decorating, organizational, and similar problems. The plan is that this will not only create a profitable and popular television show where Ms. Stewart can additionally promote her many product lines, but will serve to restore and recast her image as a wholesome, caring person who wants to help America live better lives. Product dilution is a potential problem that may result from the company’s current strategic plans. MSO is reported to be shifting its focus from home decorating and food, areas in which it has long been dominant, to health categories. For example, the company recently acquired Body & Soul Magazine, and the Self Healing Newsletter promoted by Dr. Andrew Weil. This could be a potentially beneficial situation, expanding the brand’s reach and diversifying products in the face of increased competition in the home and food categories. However, such moves could also present a problem long-term; as customers then develop a less-clear image of what the Martha Stewart brand stands for, lessening its competitiveness. Another potential problem already mentioned is increased competition in the home, decorating, and food categories. Cable television shows based on decorating and food are growing rapidly, with many hosts of such programmers in addition to various celebrities developing their own lines of household products or decorative items. For example, hosts of US cable show Trading Places and ABC’s Extreme Home makeover have both launched interior design collections based on their popularity as show hosts. Such launches tend to be in the general, lower-end market where celebrity name recognition is of increased draw. Increased competition, particularly in the lower-end product area in which MSO is so successful, is likely to lead to price cuts by all those in the market. As more and more products become available, reducing prices is one of the most often employed strategies to remain competitive and increase market share. Unfortunately, this could translate into lower profit margins for MSO, whilst the competition itself could lead to a reduction in sales. This scenario could be equally applied to the print publishing arm of the company, which has seen a substantial reduction in pages and advertising over the past two years, due in part to Ms. Stewart’s personal issues but more significantly to increased competition in the genre. One integral part of the strategic plan for the company should be to begin developing new spokespeople to represent MSO in the event Ms. Stewart becomes no longer available. The company is doing a bit of this with its move into radio; MSO will launch a twenty-four hour radio channel on the Sirius Satellite Radio network. As such, it will have a number of non-Stewart representatives offering a variety of home, food, and health programming, and has been guaranteed pounds sixteen million over the next four years by Sirius, with also possible revenue-sharing based on subscriptions. This does not address the very visible Ms. Stewart on magazines and television, but it is a start. The company needs to begin grooming a few able representatives who could take over various areas of the Martha Stewart brand and possibly even develop brands based on their own names or on some type of label that can be continued without concern of losing its spokesperson. The company also needs to further develop its administrative players to rely less on Ms. Stewart in this arena. Another component of corporate strategy should be to increase the use of the many different vehicles and components of MSO to promote each other. Ms. Stewart has paint lines, decor lines, books, magazines, television and now radio programmes. Whilst making publications and programmes blatant advertisements for MSO products is undoubtedly a turn-off for many potential customers, there are certainly subtle and tasteful ways of cross-promotion that could be undertaken in greater emphasis. This is particularly important in the face of increased competition, and a way to differentiate the MSO product lines from their many and increasing competitors. Martha Stewart is a formidable and extremely successful entrepreneur, who has built an entire product and media empire around her own image. Whilst she has been undoubtedly successful in her various pursuits, recent events bring to the forefront the need for the company to make significant strategic changes. These include moving away from one-person centre product lines and a organization built around personal image, to one that embodies the ideals Ms. Stewart represents, and to recasting the companies image in light of these changes so as to make it more competitive in the long-term.

Strengths

* Innovation

* Online growth

* Loyal customers

Weaknesses

* Bad communication

* Over leveraged financial position

* Weak management team

Opportunities

* Acquisitions

* Online

* Takeovers

Threats

* Competition

* Cheaper technology

* Economic slowdown

* External changes (government, politics, taxes, etc)

* Lower cost competitors or imports