Strengths Efficient warehouse management and distribution – Series products had a common format in length and size. Cover designs look and feel the same across product lines and countries. Standard size and format made warehousing more efficient and cost effective. They also allow standing order distribution which enable more accurate monthly print quantity forecast and print cost effectiveness.
Low printing costs – Harlequin subcontracted its printing requirements; thus it was able to lower printing costs by half compared to single-title publisher Dominant publisher of series nuance – Harlequin had 80% market share in the series romance market. As a dominant player, Harlequin had low advertising and promotion costs compared to other players. Broad variety of products – Harlequin positioned each series distinctively based on genre and level of explicitness. Overall its product portfolio provides a wide variety of stories to satisfy all readers’ tastes.
Consistent quality – Harlequin’s editors located in three different continents worked closely with authors to make sure a consistent finished product. Strong distribution network – Harlequin ad a broad and diversified distribution network across the globe. While owning a distribution system in Canada, Harlequin had independent distributors in other countries. Harlequin retailers ranged from supermarkets, drugstores, mass merchandisers, to specialty big-box bookstores, kiosks, tobacconists, etc.
Harlequin also offered direct mail service from which it was able to absorb the full selling prices without having to share with distributors or accept returns. Loyal readers – Due to consistent quality and variety of products, Harlequin had acquired a strong and loyal customer base. /5 of surveyed readers would continue to buy Harlequin books in the next year. Weaknesses Current distribution system was tailored to series romance only. Standing order distribution would not work for both single-title and series romance at once since these products were different in length and format.
Orders and sales for single-title would be more unpredictable compared to series romance. Adding single-title might mess up the whole distribution system. On the other hand, single title needs more mainstream distribution focusing on retail bookstores, instead of supermarkets, restores, etc. As Harlequin had. Lack of experienced authors and editors for single- title products Lack of reliable sales force – Harlequin depended on S&S’ sales forces while S was also a single-title publisher. This fact would definitely lead to conflict of interests during the operations of MIRA and may hurt series romance.
Current advertising and promotion strategy focused on Harlequin as a brand rather than individual series. This practice may have to change since unlike series romance, each single-title book usually stands on its own. Competitive Advantage Harlequin has great brand loyalty cultivated through brand recognition, trust, and long-term relationship with readers. The low-price, consistent, high quality novels is well packaged and positioned ideally to satisfy readers’ needs, supported by a large and capable author and editor base.
Product Standardization allowed Harlequin to achieve economies of scale in printing, distribution and advertising while accurately predicted sales and returns. Harlequin did nave a competitive advantage in series romance market. This competitive advantage is hard to imitate, as no other publisher could compete with Harlequin over many years. However, this competitive advantage may not work well for single-title as it is fundamentally different from series romance, which is Harlequin’s current strength.
Re-entering single-title business Harlequin had been able to create entry barriers through the development of brand loyalty and excellence in product quality and supply chain management. Harlequin’s readers bought as many single-title novels as series romance. Therefore, Harlequin could cultivate their customer loyalty and translate it to direct-to-reader sales in there genres However, Harlequin had limited experiences in selecting and developing successful authors and titles, which the publisher had already learned through the Worldwide Library failure.
Mira would be an opportunity for existing authors to tap on single-title area without switching to another publisher. This would promote employee loyalty and Job satisfaction, while allowing Harlequin to invest in promoting individual authors and benefit from the cross-segment marketing. Harlequin’s inferior presence in traditional bookstores for single-title and limited advertising focused on print media somewhat restricted sales to its existing customers.
Existing distribution networks were unlikely to resolve this issue and Harlequin might have to form new partnerships or mechanisms. The overheads that Mira would incur, although substantial, would remain competitive with other publishers and would benefit from Harlequin’s global infrastructure. Foreign language markets would be accessible to Mira using existing translation services, distribution networks, and retail relationships. Mira would also provide Harlequin the opportunity to create economies of scale through the centralization of rights acquisition activities.
Harlequin had the resources and capabilities needed to enter single-title business. Although the company had a different business model, it had the same basic components and critical resources necessary to create and manufacture the product. Considering the risk associated with single-title business, Harlequin should enter the market by reintroducing its basilisk and generating direct-to-reader sales through the Book Club, while exploring global distribution and marketing relationships.
Conversely, Mira represents an extremely high risk undertaking for Harlequin with significantly higher costs for production, distribution and marketing. A single-title novel is a unique product, which requires a publisher to generate higher per-unit sales volumes; create individual design, marketing and promotion campaigns; and provide higher returns to authors and third parties. Production changes, at least in terms of product dimensions, could have significant unforeseen impacts on the economies of scale currently enjoyed within the production and distribution supply chains.
If Mira is to compete with existing single- title publishers, long-term author contracts, royalties and advances could put extreme financial pressure on Harlequin and represent a significant level of investment, which may or may not be realizable in the long-term. Therefore, the failure of a single-title novel to achieve break-even sales targets has far-reaching consequences; and can seriously damage reputations upon which future sales would depend. Nevertheless, the most significant threat to the success of Mira is its potential in the US market.
The truce with Simon & Schuster achieved at the end of he Romance Wars may not be sustainable, it Harlequin launches Mira in direct competition with S&S in single-title publishing. This situation would be especially difficult given that Harlequin is entirely dependent on S&S for distribution of its series titles within the US market, and its lack of experience with mainstream retailing avenues. By pursuing Mira, Harlequin risks losing a highly efficient and profitable relationship with S&S and having to completely redevelop its distribution chain within the US.
Upon consideration, Harlequin has the resources and capabilities it needs in order to succeed with Mira. Although the company currently has a different business model, it has the same basic components and critical resources necessary to create and manufacture the product. The author/editor base that Harlequin has at its disposal represents a considerable asset, and somewhat mitigates the risk of talent selection and development that can be associated with single-title novels.
Historic market positioning and the reputation of Harlequin as a romance series publisher may overshadow attempts to create the Mira brand; but Harlequin has reached the point where it must expand beyond the romance genre. The direct-to-reader sales, marketing and distribution mechanisms would require few adjustments or adaptations, and would provide Harlequin with an ideal test market from which to make the leap into the mainstream.
Existing production and distribution expertise would sustain development of Mira, while Harlequin spends time putting mainstream distribution mechanisms and publicity expertise into place. It is conceivable that successful single-title authors who published their early works with Harlequin could be convinced to return to Harlequin, depending on the financial incentives; but, this is a long-term question, governed by authors’ contractual obligations and the success of Mira in the short-term.
However, the back-list of novels created by successful authors who published their early works with Harlequin comprises an easily marketable, cost-effective and potentially profitable resource, that would enable Mira to capitalize on established reputations and in-direct publicity. The downside is that Mira may risk alienating or offending fans of established authors, by publishing works that did not meet reader expectations because of their quality or adherence to Harlequin conventions.
