Martha Stewart Living Omnimedia Session 1 Group 3 Internal Analysis Martha Stewart Living Omnimedia Ayse Cueto, Toi Valentine, Arielle Scoblinoko

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Competitive Advantage Extensive knowledge on entering new markets (strategies) Branding strategies Ability to break down companies and analyze what parts are successful and what parts need immediate change -Create strategies for short and long run benefits

Industry Analysis for Martha Stewart Omnimedia Session 1 Group 3

High Rivalry- Because there are many firms and much competition, large product differentiation, and exit barriers, there is a high rivalry for MSLO. -There are a large number of firms competing in celebrity brand names and household good brands Oprah 2006 Sales alone $325,000,000. Harpo INC also accounts for other celebrity brands including Rachel Ray, Dr. Phil. According to a poll conducted by bloggingstocks.com in 2007, 73% said that Oprah was a better media empire. Rachel Ray Tyra Wamsutta Brand by Springs Global which holds multiple brands in home goods industry. 2006 Sales $2,536,800. Laura Ashley An established home brand name sold at multiple retailers internationally. Sales $400,000,000. -Product differentiation Multiple design and quality opportunities ”Our products compete in what is for Macys about a $4 billion category. Our goal is to claim 10% of this category” Martha Stewart Omnimedia CEO Susan M. Lyne 2/2008. MSO recently bought out fellow celebrity brand, Emeril Lagasse Different price points Martha Stewart products available at Kmart and Macys, main competition includes retailers not supplying MSO products, Target, Wal-Mart, etc. -High exit barriers Public Image Large amount of money already invested 22.91% of public shares of MSO held by insiders, Shareholders will be affected 43.60% held of public shares held by institutions -Price of Market Share

Low, stable returns Low, risky returns High, stable returns 2. Hard to enter industry- Because of the Martha Stewart name and the brand loyalty that comes with that, it is harder to enter this particular industry of celebrity brands. Huge brand loyalty established network of retailers and products High absolute cost advantage Government regulation doesn’t really affect BARRIERS AND PROBABLITIY High Risky Returns EXIT Low High Low, stable returns Low, risky returns High, stable returns High, risky returns Low ENTRY High

3. Low threat of substitute products Due to high brand loyalty associated with celebrity Not many substitutes exist in homegood products. Because there is less competitive threat from substitutes => does NOT affect price as much.

4. Bargaining Power for Supplier Supplier has some bargaining power because there is only one manufacturer per product type of Martha Stewart labeled goods Buyers (Macys, Kmart, independent dealers of rugs, magazine shops) all purchase Martha Stewart Living labeled products from those particular manufacturers only.

5. Bargaining Power for Buyer- Buyers do not have as much bargaining power as the supplier because there are many different buyers of Martha Stewart labeled products, while there is only manufacturer. However, these buyers have many other relationships with other celebrity brands. Macy’s, K-Mart, Wal-Mart, Independent Dealers (book Shops, Furniture Stores, etc). They already have a large number of business partnerships with other brand name labels Celebrity brand Emeril Lagasse, new partnership with WeddingWire, Jessica Simpson, and other celebrity brands at Macy’s. Dominant power in the specific level of retail other celebrity brands provide a different range of products Macy’s and K-Mart target different markets and levels of retail. Competition Among Buyers Because manufacturer can sell to different reetailers that sell celebrity brands, they can hold more bargaining power than the buyers. EX: K-Mart competing against Wal-Mart

SWOT Analysis Overview Strengths: leverage in both media and merchandise -several TV shows and websites -4 magazines -Sirius radio channel -15 retail and manufacturing partners -2 major brands-Martha and Emeril Weaknesses: very spread out, lacks a focus. -need to focus more on what could drive most impact Opportunities: connecting the media and merchandise sides, great opportunity to expand. Threats: many of their target markets are suffering in a larger economic scale -housing slump- less people purchasing homes/home goods -economic crisis- less spending money -> retail industry in trouble (especially K-Mart).

Intensive Strategies Market Penetration: This Martha Stewart living ad attempts to increase product usage, frequency of use, and consumption of Martha Stewart Living Gardening Products by taking the same tools and marketing them as tools for Sustainable Living. During a time when Sustainable Living and Organic Food has become a growing lifestyle and an individual's part in helping the environment, Martha Stewart Living focuses on this growing trend and promotes further use of her products in this more significant way. Market Development: The concept behind this Martha Stewart advertisement is that men too are consumers of Martha Stewart products, including grilling supplies, cookbooks and course her TV show and magazines. The visual attempts to expand and develop the Martha market by opening up new ideas and specifically reach out to men, a market that has received little attention from MSO. Product Development: This Martha Stewart advertisement promotes an extension of Martha Stewart products into children’s arts and crafts. The selling point of the line is “easy-clean creative fun.” At this point Martha Stewart advertises primarily to adults, but this advertisement promoting her new “easy-clean creative fun” line extension speaks to children and their parents.

Market Penetration Ad Use MS gardening projects more than just for a hobby, start using them for a lifestyle.

Market Development Ad

Product Development Ad

Diversification Strategies Related: Crayola -> kids crafts market Febreze -> household cleaning market Unrelated: Goody -> beauty/accessory market Purina -> pet market Integration: FORWARD (Martha Stewart Living Retail Store)

Sources http://www.reuters.com/finance/stocks/companyProfile?symbol=MSO.N http://www.brandweek.com/bw/content_display/news-and-features/retail -restaurants/e3ia9dec6e36d9df17442800c3aca3938bd “Brand Loyalty to Martha Stewart Improving, Research Firm Says.” By Maria Halkias http://psucomm473.blogspot.com/2007/03/martha-stewart-rise-fall-and-rise-again.htm http://www.novelguide.com/a/discover/cps_03/cps_03_00428.htmll http://phx.corporate-ir.net/phoenix.zhtml?c=96022&p=irol-homeprofile http://74.125.113.104/search?q=cache:M8m_nOTpWp0J:www.occ.treas.gov/handbook/mis.pdf+management+ information+system&hl=en&ct=clnk&cd=2&gl=us#19 www.marthastewart.com/corporateinformation