Harlequeen Enterprises

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Risk: Authors still deciding to leave and pursue self-publishing.

Mitigation of Risk: Increasing royalties and lowering the prices of e-books will increase the sales of e-books, which will provide the authors with higher royalties.

This option addresses critical issues #4

Option 4-Harlequin Mobile Application

The growth in the Audio book industry from 2014 to 2019 is estimated to be 7.8%. With the introduction of Harlequins 39,604 titles in audio books Harlequin can use its app’s database to make the audiobooks available for $4.99. The App will become comparable with our bench mark app Audible.com.

Cost: The total cost of developing and including all the necessary features in the existing Harlequin App to make it comparable to its benchmark; Amazon’s app Audible.com. The initial cost will be $468,264[1], the maintenance cost will be $409,975 annually

Benefit: The result of updating the Harlequin app will be an increase in profit by $265,266 in the first year and $313,575 the following year.

Risk: There is a risk of low adoption rate and risk of the current Harlequin app users not using it due to its previous 2.5 star rating on the App store.

Mitigation of Risk: During the initial launch of the updated App, Harlequin will promote the app through their Loyalty program, on the website and pay $3200 annual cost of banner advertising in the Apple app store books category. After initial launch, the App will require constant maintenance and updates to the new software in order to be compatible with the IPhone and Android and to maintain their standardized quality value.

This option addresses critical issues #3

Option 5-Status Quo

Another alternative is to keep running the business. In 2014 they lost 6% sales revenue and assuming they don’t make any changes, there net profit decreases by 10% every year. They will be able to sustain themselves for another 10 years with decreasing profits. But this will result in loss of number of authors as they will be switching to digital methods such as self-publishing. Also, considering Harlequin won’t be keeping up with the consumer preference towards e-book and keep on spending their resources on paperback. This would result in loss of market share as their paperback products will cannibalize their e-book product development resources.

Recommendations

Based on the decision criteria, Harlequin needs to implement options ____.

- Cost:

- Benefit:

- Risk:

- Mitigation of Risk:

- This Recommendation addresses

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