Martha Stewart Living Omni media

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Martha Stewart Living Omni media

Background

Martha Stewart Living Omni media was incorporated in 1997 by Martha Stewart. She served under various position such as Chairwoman, president and Chief Executive Officer. She owned 96 percent of the firm’s controlling interest. This made her a major shareholder.  The chief operating officer for the company was Lisser Garsh It conducted its business across various industries such as broadcasting, publishing, merchandising, and internet. Therefore, this made the firm become an umbrella for the various ventures belonging to Martha Stewart and operated under Merchandising and media. The main products for the business were home furniture, home decorating products, Martha Stewart living everyday food, Martha wedding s body and soul. After two years of operation, the company decided to expand its capital base hence decided to borrow from the public. This form of borrowing made it necessary for it to be listed in the New York stock exchange in October 1999. The initial public offer for the company was 18 dollars. After some time the share price rose to 38 dollars, which was a good indicator to most shareholders. Such an increment attracted even more investors as the reputation of the company had been boosted. None the less the firms going concern was guaranteed. However, in 2001 Martha Stewart engaged in the sale of her shares from the company. Despite being the majority shareholder, she got involved in obstructing insider investigations, which opened an ugly face of her life. This rendered her into forceful resignation as a result of insider trading. All along the scandal, she was controlling the company. She was charged and sent to prison. Her scandal brought a lot of shocks to a healthy and stable firm that was gaining popularity each and every day. The business realized various changes such as the alteration of consumer preferences. The substitutes for the comm0oditeis produced my MSO carried the day. On the less given that the business operated in a perfectly competitive market there were free barriers entry and exit. This even made the situation worse as the level of competition got to another level. She was later released in 2005.

Over the years, the company has been in operations and has managed to make significant changes that have affected the society. This impact can be realized through creation of employment where man power is hired and remunerated in the quest to increase the productivity of the firm. As at the beginning of 2014, the employee base for the company was 406. This can realized through various books of accounts that the company has been able to post in the recent past. These financial statements include income statement, statement of financial position balance sheet and the statement of cash flows. All the statements have been deemed to represent a true and fair view of the status of the company. As at 2013, the asset base for the company was 148.367 million dollars. In 2013, the company reported a turnover of 160.675 million dollars. The income used for operations of the company that year was approximately 1.897 million dollars. The operating profit was 1.7 million US dollars. In the same year, the financial statements revealed that the company had a total equity of 70.475 million dollars. This implied that the firms going concern was still on and had the ability to handle both the financial and business risk that the firm faced.

General External Environment-Martha Stewart Living Omni media

There exist vast threats and opportunities that MSO is likely to subject itself. Looking at the general environment various factors will be put into play in order to ensure that all areas have been covered adequately. The factors majorly include political or legal factors, economic, socio cultural, technological, global, and demographic.

 

Political or legal factors

In order for MSO to trade safely, it was deemed to know what was legal and illegal. Though the problems that Martha Stewart faced were to be differentiated from the company, you realize that she was the brand of MSO. Therefore, the legal suit that she faced largely affected the consumer tastes and preferences. This implied that the company products were no longer ‘safe’ as the general public my perceive given the scandal that Martha was facing. Moreover, during her trial, there were various publications that claimed that Martha Stewart was never a go slow lady. The articles claimed that she was extremely demanding from her employees. Others raised alarm of how brutal and unkind she was to her employees. Such publications were forms of communication and they reached a large number of clients. They simply boosted the sales for the substitute products from the competitors of MSO. This form of advertising was affecting negatively on the revenue stream of Martha Stewart Living Omni media.

Socio cultural factors

It is evident that that Martha Stewart is an Influential figure in her society.  When she leaves prison, she gets back and decides to change the fallacy that had been implanted on people during her trial. This is done by her wearing a pongee made by her friend in jail. She realizes that she possess the ability to influence the market once more. The beliefs that people had about MSO made the firm loose its market base as the minds of most clients had been influenced negatively.

Economic Factors

During Martha Stewart’s trial, the share price in the New York Stock Market stumbled. This forced the company to change its move and drop her name to some of its product. The name Martha Stewart was removed from MSO every day food magazine. The same name was down played in Martha Stewart publications. This was in the quest to raise the value of its share in the NYSE market. The firm realized that the use of the same brand name made it suffer some big blows in the market. Some of the changes that the company made involved restructuring. This compelled a number of firms under the MSO umbrella to merge so that the value of the stock can be increased. The merger between Kmart and sears rendered the Martha Stewart home line products into sears outlet.

Technology

Advancement in technology was a critical factor in assessment of MSO. There various concerns relating to the technology as a general business environment. Some of the key issues of concern included; the rise in the automation in the business, increased risk of development in the company and the impacts of the technological scale that have existed within the firm.

Global

The world has been made a global village. Similarly, MSO and its products do exist in that village. Any information regarding the company travels so fast through the internet and can influence the potential investors in either way depending on the nature of the information circulating.

Demographic

The clientele of Martha Stewart Living Omni media runs across the globe. Various people do purchase the products from different quarters of the world. The products produced by MSO cut across all genders and races. There exist no discrimination in the nature of the products the company provides to its customers. Similarly, the firm has a large employee base is represent different places.

  1. Industry analysis Martha Stewart Living Omni media

The industry analysis is very critical in the run to analyze Martha Stewart Living Omni media. Porters’ model therefore is very fundamental in ensuring that the industry in which MSO belongs is analyzed in all spectrums.

Threat of new entrants

Given that MSO operated in a perfectly competitive market there exists free entry and exit in that market. Furthermore, in such a market price is determined by the forces of demand and supply that exist in the market. Having said this you realize that profits to attract new entrants in the market. When MSO is facing various challenges, which lead to it losing its market share. This becomes a real incentive to the new firms that target to get into the market. When this happens the market share for MSO is reduced thus reducing its revenue. With the reduction of revenue, the net earning get affected thus affecting the profitability and operation of the firm.

Intensity of rivalry among new competitors

In every market, every entry is interested in securing the largest market share. They will better their best to ensure that a competitive edge is gained over their competitors. In the industry in which MSO exists, it’s evident that competitors perpetrated anything that was negative about the company during the scandal of Martha. When information is published portraying the rival firm in negative manner, the other firm gains an edge. More so, some competition that emanate seem to take a stackel burg position. This is where the opponent observes how you act then he or she pools his strategy.

Product substitute.

Unlike compliments, most consumers find it easy and convenient to substitute products since their preference might not be affected too much. This implies that in a perfect market there exist various substitute for the products that MSO used to produce. Given that they were not a monopoly the new entrants would produce products that are similar to what MSO produces. Despite this, the price of such a commodity will be equal to what the substitute retails at. Therefore, the budget line of the consumer might not be altered as he or she maintains the same in difference curve. However, the consumer shift to a substitute product produced by another firm reduces the turnover of the company whose product has been substituted.

Suppliers

Having looked at the scandal that faced the major shareholder who happens to carry the brand of the company, suppliers tend to minimize the culture of provision of goods and services on credit. This is because they tend to doubt the solvency position of the company and they would not wish to take chances

Buyers

The consumers are the target of every company because they are the main source of income to the company. Therefore, a shift of the consumers form one product to another will affect the revenue stream of the company.

  1. Competitive environmental analysis

The environment in which MSO exists is extremely competitive. This is evident from the volatility of the share price on the New York Stock Exchange. The fluctuation in the prices implies that there are vast activities that the company must put in place to ensure stability of its share. Increment in the share price conveys a positive message to the shareholders as this increases the value of the firm thus attracting many investors.

Internal Analysis.

  1. Key Result Areas (Areas critical for the firm’s success)Martha Stewart Living Omni media

The key result areas that profoundly appear in the case study. One of them is when Patrick helped Martha Stewart acquire control of her company from Time Inc. in 1997.  This was a timely buy and it is what can be said to have led to the formation of Martha Stewart Living Omni media. Why this was timely is because it was done in the very midst of a shift in trend amongst retailers a shift that was impartial to individual items but particular to an entire category of good and what makes this all very critical is that Martha Stewart took advantage of this shift in the trade environment and to the benefit of her company she offered what the retailers needed at the time. The timely buy from Time Inc. is a key stepping stone to the success of Martha Stewart’s company.

Another success for Stewart was the economic gain brought about by Patrick’s negotiation with Kmart a top retailer store in the United States to sell at a country wide level Martha Stewart branded housewares and linens. This partnership generated big profits for MSO and left an undeniable mark on the merchandising. It left an undeniable mark on the whole industry as a whole. The economic gain that surmounted from this partnership was a key to many of the future ventures of MSO. It gave MSO the financial leverage it needed for future trade insights and investments. Financial growth for the MSO is a key pillar and cornerstone for its success then and all its future successes.

So as to put her business at a better competitive level Martha Stewart did one of the best marketing ideal, she set a TV show in which she had her own kitchen and cooked products from which she got from her garden. The perfectionist mentality that she had made it possible for customers to trust her brand. And as it is in the business world a trusted commodity will often times sell more than another commodity that has an even measure of quality and even quantity. And by doing this she became the nation’s face of the preeminent female brand name, she had built herself a name that could stand over time and even be compared to commodities such as Calvin Klein, Tommy Hilfiger and her quote and quote personal role model Ralp Lauren.

Another key result area in the firm was the image that Martha Stewart had made of herself the fan base she had accumulated through her endeavors, this is what made it possible for some of the part for her company to have such a large customer base, a customer base that ranged from state to state throughout the entire country. This is even seen at the point when the company prepares to go public and the thought of a single public figure in the company is discussed and there is set up a creative team to ensure that the company does not fall in the absence of the key character Martha Stewart.

A very profound weakness in the company’s ideals was the inability of the company to keep up with the upcoming trends and therefore it was overtaken by the newer companies that could keep trendy. The company did not appeal to the younger generation and therefore overtime they lost their customer base the inability of the company to come up with a website that could accommodate the changes that the society at the time started experiencing such as wedding advertisements this made the company overtime to lose what it had with the people the perceived ability to give the people everything that they wanted at the time and therefore this led the company to struggle overtime. Also as a side-note, the company based itself around a single person this cost the company when Martha Stewart was arrested for insider trading.

  1. Strategies.
  • Business level

When it comes to strategy especially business level strategy, MSO was that it developed distinctive advantages to be associated with it. MSO made a product that was peculiarly unique only to them using the particularly unique method of cooking show which at the time was not common this made it possible for the brand to stand out amid other brands at the time her TV studio is said to have been an exact replica of her kitchen and  by doing this it must have lead the customers to have confidence in the products that they were being sold this in a way built heavily a customer base that they had and in turn profits that they ended up having.

Another key Business strategy that worked for MSO was that they coordinated unit activities in different departments with efficiency this is seen when Sharon Patrick a former McKinsley & Co. partner whom she met while climbing Mount Kilimanjaro wins several negotiations for the business. In a first key negotiation she negotiates to buy back the company from Time Inc. then later on she negotiates that MSO can now start selling through Kmart stores this moves Martha Stewart Omni media to a new level in that it now has a larger customer base and that it now can impact the whole of the United States. This strategic move by the coordinated management leads the company to completely new levels that previously were not thought possible.

  • Competitive Strategy-Martha Stewart Living Omni media

The competitive strategies as seen by MSO include the fact that to deal with competition the company had to differentiate its products this appealed to the retailers that were at the present time seeking for at the time a shift from individual items to a category of items this method makes it possible for easier customer service and the time it really helped in the marketing of the commodities that the company had. From single commodities to categories of commodities.

MSO’s strategy though it might have in the end led to the failing of the company is that it built customer intimacy through the publicity gained by Martha the founder of MSO. The customer intimacy by MSO is based on its ability to provide the most quality of commodities and at the time relate with the customer at a level that the customer also can understand. MSO as it started was based upon Martha Stewart and the confidence the public had in her. This made it possible for the public to trust and use MSO’s products. This strategy really aided in the building of the multi-million dollar business that MSO was becoming.

A key weakness in MSO’s competitive strategy is that MSO in-spite of its capacity to be able to be the low cost leader at times to ensure a larger and steadier customer base MSO chose to maintain its prices regardless of the fact that it could have easily done this to maintain a larger customer base.

  • Cooperative level Martha Stewart Living Omni media

The most outstanding cooperative level strategy that MSO had was to grow in size to become larger in size to have a larger market cap as seen when Patrick negotiates for the store to distribute its commodities through Kmart. This really increases the revenue of the company and ensures that the company (MSO) steadies on. Its distribution through Kmart ensures the store has a country wide coverage. The size advantage made the company cooperatively bigger this was a cooperative strategy well employed by Patrick. Prior to this another cooperative strategy that was well implemented was that the company was bought from Time Inc. this a move that ensured the company’s free with its new owner that it could now grow under new management

A cooperative blunder that this company did was that it based its whole image on a single person. This as said by an analyst was not right to base an entire company on a single name the question is to be how is the company broadened apart from that one entity. Though MSO promised its prospectus that it would promote a new generation of other Martha Stewart living experts. This was said but it later on not done and when Martha Stewart was arrested because of insider trading the company underwent a massive recession and nearly fell apart.

  • International strategy.

In terms of international strategy, MSO was not really vested in going international its focus was mainly domestic and it is not considered that MSO really thought of expanding its market to an international level. This was in many ways a misstep as MSO would have garnered more ground had it moved its operations international instead of just focusing on the domestic market. Other markets such as Europe or Asia could have used the service that MSO provided.

  1. Core competencies.
  1. Resources.

Tangible.

  • Financial

In terms of financial core competencies MSO tried to manage its revenue properly even though the major sources were through the Kmart stores MSO still tried to make more money through websites and Ads but it failed consistently Ad pages such as Martha Stewart living did not incur much revenue as expected at the time. The recession that had hit the company did not in any way seem to be solved by these methods. The company even tried to copy some of the ways in which other companies advertised but this all flopped leading to huge financial loses

  • Physical-Martha Stewart Living Omni media

With regards to physical resources and even infrastructure. MSO did not consider buying permanent offices or even a permanent studio it relied on Martha Stewart’s houses to perform in as a studio this undoubtedly set them behind a lot of money as they could have avoided such additional costs and made more profits by setting up or even having their own physical infrastructure. The skills of the people involved across board in the company if correctly done were to be reevaluated to procure required personnel.

  • Human

In the organization, there is a clear alignment of hierarchies. From the directors to the key personnel such as the directors this clear definition of hierarchies in MSO makes it possible for the company to run smoothly as seen and as it did run throughout the recession and the battles that enveloped between Martha and Patrick towards the year 2013. The chief creative officer Gael Towey served as a three man team when the company was experiencing hard times this enabled the company to run on despite the circumstances. The competent staff in the company enabled this in the end to be a foreseeable possibility. Though there was a contention about Stewart’s pay, it was in the end amicably resolved. As her demands were very large and disproportionation to the received by the company at the moment. Such matters of contention in the end were agreed upon by the new sitting management.

  • Organizational.

The company shows its organizational competency when the competition stiffens. MSO was under pressure from online competition and shrinking audiences from daytime TV audiences. It had to put up to this pressure or be swept away by the pressure Martha Stewart imitators were starting lifestyle cable channels and programs. Even Oprah Winfrey a leading MSO competitor helped launch a competing celebrity chef Rachel Ray 30 minute meals appealed to time-pressed youngsters. As a combative measure, Patrick promised to sell more multimedia packages, to develop new TV shows and reduce MSO’s heavy dependence on publishing.

Intangible

  • Resources for innovation-Martha Stewart Living Omni media

The resources used in innovation and the development of the company, the revenue-generated from partnerships by MSO and from selling Martha Stewart housewares and from selling linens made it possible for the expansion of the company to new levels the success tasteful designs to low-cost consumer goods this are the intangible resources that made it possible for the company to grow

  • Reputation

The reputation of MSO was clearly solely based on a single individual. From the very beginning from her cook, show the company MSO was based on Martha Stewart. The company’s reputation grew as a result of her maniacal devotion to detail and perfection on the show. Her maniacal devotion to detail and perfection instilled trust in her brand this made the reputation of the company to grow. By late 1990’s, Stewart had become the nation’s preeminent female brand name, inspiring comparisons to Calvin Klein, Tommy Hilfiger, and her very own personal role model Ralph Lauren

  • Brand Loyalty

To grow the loyalty to the brand the company found ways in which to make the customer trust in the commodities that the company was producing. In a report of what she told a news reporter: “I wash the sheets myself I even count the stitches, we care that we’re not disappointing anybody” this are statement that could be said to trigger the trust of the customers to the brand that they were producing. This loyalty is developed overtime but in the case, that it is earned it factors for a high resource volume.

  1. Capabilities

Value Chain

  • Operations-Martha Stewart Living Omni media

The Business operations especially through the years 2000-2010 were at all time low the business was experiencing losses and through the great recession, the business had to maintain its standing and struggle all through the recession to be profitable once again. The restructuring of the company. The 12 percent of the company’s 600 employees were laid off. Most of the TV production was stopped but to become profitable once again, the company had to really struggle through the year 2000’s.

  • Marketing and sales

In the marketing and sales, the business at the beginning really tried to cope but after the generation went by the company just could not cope with the competition that came up from rivals such Oprah Winfrey and even Rachel Ray. This made it very difficult for the company to cope. It in turn tried to also be trendy and cope with the current generation but it was well past time the fan base that they once had was being faced away and with this, it was not possible to recover even up to the latter 2000.

  • Service-Martha Stewart Living Omni media

In the beginning, the service provided by MSO was a one of a kind service. Martha Stewart’s committed at the very beginning was notably exceptional. This was what really made the company to flourish in the beginning but overtime hit with financial storms, scandals MSO still tried to maintain its customer service to the best that could be possibly given. This made it maintain a fraction of the market in the years of non-profitability to the time when it became profitable again.

  • HR

The Human Resource department in MSO was most of all active since it ensured that the customers were satisfied and the customer base was well maintained even into the recession. The customer base was well managed and the Human resource department dealt with the satisfaction of the customer.

 

  • Technology

With regard to technology, the company was slow in assimilating to the newer methods that came up over time. This was in fact the problem that lead the company to lack in profitability over time as it did not assimilate to the changes that occurred over time a more trendy wedding show came up an Internet startup bringing into themselves a market the market that previously MSO had enjoyed this changes as the company does not assimilate in itself technological change.

  1. Suitable Competitive Advantage-Martha Stewart Living Omni media

In terms of competition, MSO after the partnership with Kmart MSO became so competitively viable that it took the whole country by storm this is to be said about the MSO at the beginning. The MSO garnered so much revenue over the deal that it enabled MSO to expand and to take on board new programs. MSO now had the capacity to have a TV show this was mainly geared to positively affect marketing. Marketing is seen as the greater strategy that leads to the success of MSO.

  1. Structure and Control.

The structure and control of the company was clearly at first in the hands of Martha Stewart who was the 90 percent shareholder but over time Patrick overruled her decisions especially when she was in jail for insider trading. The company was managed by a number of directors towards the end of year 2000 but before that, the creative director is the one who managed the company. To maintain the company’s structure to the running of the company.

F.

  • Profitability Ratios.
Gross Profit Margin     = Sales – Cost of goods sold
Sales

 

Sales from Widgets $112,500
Cost of Goods Sold (COGS) $ 85,040
Gross Margin $ 27,460

 

Gross Profit Margin = Sales – Cost of goods sold
Sales
$112,500 – $ 85,040
$112,500
    0.24

 

Net Profit Margin           = Net income after taxes
Sales

 

FROM THE BALANCE SHEET FROM THE INCOME
ASSETS:
Current Assets:    
Cash $ 2,550 Sales from Widgets $112,500
Marketable securities $ 2,000 Cost of Goods Sold $ 85,040
Account Receivable (Net) $16,675 Gross Margin $ 27,460
Inventories $26,470  
Total Current Assets $47,695 Operating Expenses $ 18,950
 
Fixed Assets:   Net Income Before Taxes $ 8,510
Plant & Equipment $41,000  
Less: Accumulated Depreciation $ 11,000 Less: Income Taxes $ 4,163
Net Plant & Equipment $30,000    
    Net Income After Taxes $ 4,347
TOTAL ASSETS $77,695  

 

Return on Total Assets = Net income after taxes
Total assets
= $ 4,347
$77,695
      = 0.06

 

  • Liquidity Ratios.
Current Ratio = Current Assets
Current Liabilities

 

ASSETS:     LIABILITIES:
Current Assets:     Current Liabilities:
Cash $ 2,550   Accounts Payable $ 9,500
Marketable securities $ 2,000   Short-term Bank Loan $11,375
Account Receivable (Net) $16,675   Total Current Liabilities $20,875
Inventories $26,470    
Total Current Assets $47,695  

 

Current Ratio = Current Assets
Current Liabilities
= $47,695
$20,875
      = 2.28

 

Quick Ratio = Current Assets – Inventories
Current Liabilities

 

  • Leverage Ratios

 

Debt Ratio = Total Debt
Total Assets
= $44,875
$77,695
      = 0.58

 

 

ASSETS:     LIABILITIES:
Current Assets:     Current Liabilities:
Cash $ 2,550   Accounts Payable $ 9,500
Marketable securities $ 2,000   Short-term Bank Loan $11,375
Account Receivable (Net) $16,675   Total Current Liabilities $20,875
Inventories $26,470    
Total Current Assets $47,695   Total Long Term Debt $24,000
 
      TOTAL LIABILITIES $44,875
Fixed Assets:
Plant & Equipment $41,000    
Less: Accumulated Depreciation $11,000  
Net Plant & Equipment $30,000  
     
TOTAL ASSETS $77,695  

 

 

Debt Ratio = Total Debt
Total Assets
= $44,875
$77,695
      = 0.58

 

  • Activity Ratios
Average Collection Period = Accounts Receivable X 360 days
Sales

 

From Balance Sheet   From Income Statement
CURRENT ASSETS:     REVENUE:
 
Cash $ 2,550   Sales $112,500
Marketable securities $ 2,000   Cost of Goods Sold(COGS) $ 85,040
Account Receivable (Net) $16,675   Gross Margin $ 27,460
Inventories $26,470    
Total Current Assets $47,695

 

 

Average Collection Period = Accounts Receivable X 360 days
Sales
  = $16,675X 360
$112,500
  = 53.36 or 54 days (rounded up to the nearest day)

 

  • Strategic Leadership-Martha Stewart Living Omni media

In terms of leadership, the company leadership focused on the welfare of the company. The company’s growth was the very thing that was at the heart of the directors that were appointed to replace Martha Stewart this has made it possible for the survival of the company because of the strategic leadership of the company.

  • Strategic Entrepreneurship.

This is entrepreneurship that focuses on the future gain of the company. The kind of entrepreneurship that was seen at the inception of the company. The important negotiation skills that Patrick had as an Entrepreneur she did what was expected of her. Strategic entrepreneurship was key to the growth of the company at the inception.

Martha Stewart-Martha Stewart Living Omni media

  1. Summary of Opportunities and Threats, Strengths and weaknesses

Opportunities

  • Unite publishing, television, merchandising and the internet under one roof to earn more.
  • Develop new TV shows and multimedia packages for more revenue.
  • The hiring of new management in 2001 to boost the website profits.
  • Acquiring new money making avenues such as The Wedding List to drive revenues up in 2001.
  • The addition of Martha Stewart Living satellite radio and the partnership with Warner Bros to produce DVDs from past shows.
  • Licensing partnerships for kitchen ware with a famous chef and homebuilder for their home products, Kodak, Yahoo and branded flower partnerships saw a boost in revenue.
  • The move to make MarthaStewart.com the best website.
  • Martha Stewart Cooking School and Martha Bakes TV shows were a good opportunity to recover lost glory.
  • The company usually was able to employ pros at their top positions, which were a good move.

Strengths

  • Martha Stewart’s childhood helping her father and her background as a model and caterer helped to create the icon that would later become a force.
  • Her founding of the TV show and magazine Martha Stewart Living and Martha Stewart Weddings.
  • Martha Stewart Living ad pages resulted in a 23 percent increase in revenues.
  • As a public company, its shares increased.
  • MSO had high quality home designs.
  • 2005-2007 saw ad pages in ‘Martha Stewart Living’ increase and ‘Body+Soul’ magazine increased revenues by 54 percent.
  • After the redesigning of Martha Stewart.com by Gersh, the site won numerous awards for good content.

Weaknesses-Martha Stewart Living Omni media

  • The slow growth in revenue and falling of net incomes in 2000.
  • Their website losing a lot of money despite the company investing in its contents.
  • Not being able to attract many investors in terms of advertisements resulted in falling net incomes.
  • Poor planning that led to the fall of ‘Blueprint magazine’ within a year.
  • Failure to be consistent with young consumers and losing them to their competitors because they could not provide content to woo them.
  • Failure to fit in reality TV shows that were gaining momentum at the time and the failure of their show ‘The Apprentice: Martha Stewart’ did not help matters.
  • Overdependence on its publishing sector meant that other sectors continued to perform poorly.
  • Major layoffs and severance payments.
  • The resigning of 5 CEOs within a period of 10 years.
  • Martha Stewart seemed always to have some tensions with her executives, which did not help much in improving morale.
  • The merchandising business never really grew despite heavy investments and decision making the company put effort to.
  • The biggest weakness of all for the company became Martha herself. Often blaming the board and her employees for all the trouble but never herself. She did need to see what she was doing wrong herself.

Threats Martha Stewart Living Omni media

  • Competition from new comers like Rachel Ray that offered quick solutions.
  • Competition from better retail stores like Walmart to MSO’s outlet of choice Kmart.
  • Kmart, there biggest sales outlet seeking bankruptcy protection and suing them in 2002 lost the company some revenue.
  • The loss of $75.8 million in 2005 and continued loss in 2006.
  • Competition in merchandising, the most promising idea from MSO, saw the company lose business to Walmart.
  • The recession of 2008 hit their home products hard resulting in losses.
  • The quitting of senior executives board members was a blow.
  • Reshuffling of the board members and new appointments left the company more confused and its popularity dwindled further.
  • Many of their new shows were flopping and their major decisions often cost them.
  • Negative publicity often with Martha at the center of it such as her time in prison often did not help the company image.
  1. V. Identification of Strategic Intent and Mission-Martha Stewart Living Omni media

A company’s strategic intent involves what they want to do and why they want to do that particular thing. Strategic intent has a hierarchy that is vision, mission, goals, and objectives. Martha Stewart Omni media definitely had all these even though at some points it failed at thoroughly accomplishing them.

Vision

To be the leaders in Publishing, Internet, Broadcasting media platforms and Merchandising product lines.

Mission

MSO is a company that thrives and excels in publishing, merchandising, internet, and broadcasting media platforms. We are keen on producing low-cost products for consumers mainly in the home sector and providing quality products.

Business model-Martha Stewart Living Omni media

A business model ascertains sources of income, desired customer base, and financial details. Martha Stewart Living Omni media had all these strategies in place. It was clear that they wanted their sources of income to be from publishing nationally and internationally. They were to make their published materials such as Blueprint, Martha Stewart Living magazine, Martha Stewart Weddings, a success story and make them the most read media in the United States and beyond.

Merchandising their products through the best stores in order to make the most sales was their other promising idea. They signed contracts and deals with Kmart stores to sell their home products, home, and garden gear at Home Depot, pet products at Pet Smart, branded foods at Costco among other to make sales by all means.

Broadcasting media platforms was their other source of income with television shows for cooking and how to do stuff offering those good ratings through which advertisers would be willing to invest in.

They also invested in the internet that was first rising especially among younger consumers and by having online shows and content, more income would be established.

Their desired customer base was initially with the more mature crowd but they had to extend their reach to the younger consumers if they were to compete with their upcoming rivals. The struggle to cater for the young masses was however not as easy to accomplish.

Their financial details were always published even when they made a loss that was both a good thing and a bad one. Bad because it decreased their popularity most of the times but good because it was a learning opportunity for them and it showed that they valued transparency.

Goals and Objectives-Martha Stewart Living Omni media

  • Sell more multimedia packages.
  • Develop new TV shows.
  • Reducing heavy dependence on publishing.
  • To be a public company with a huge share price.
  • To keep raising ratings in all our lifestyle TV shows.
  • Generate good revenue from advertisers and product sales from our online content.
  • Make MarthaStewart.com the best to-go to website.
  • Employing people with a vision and background in television and magazine to propel the company forward.
  • To appeal to the old as well as young consumers with relevant content.
  • Making high-margin, low-cost licensing deals in all categories.
  • To be the best producers of all products that defines a home like dinnerware and furniture.
  • Expand from the other avenues such as office branded products.
  • Expand into the international market.
  1. Strategy Formulation and implementation (Recommendations)Martha Stewart Living Omni media

Who

  • Martha Stewart having the company named after her should play a more proactive role in its success like aligning her paychecks with reason to the revenues the company is making.
  • She also ought to cease employing so many close family members in a public company; it does not sit well with the rest of the employees.
  • Her lifestyle that is paid for by the company is excessive and should be cut down.
  • Martha Stewart should also protect herself from further scandals, they damage company profile.
  • The company needs more shrewd negotiators if it is to make progress in sales.
  • Analysts have always likened her fans to a cult; the company should tap into the fanatism and brand all their products, fans will buy into anything if the products are consistent and continuously innovative.
  • The board is sacred and should be protected from constant reshuffles and falling out as this creates insecurity and people will not perform their jobs effectively.

Where

  • The company needs to expand to other countries, it is about time.
  • Just like its competitors learned from them, the company ought to investigate why these same companies are overtaking them and beat them in the race.
  • The company also should keep up to speed with changing technology and not change way after others have beat them to it.
  • The company has suffered in one person holding most of the shares and therefore making all the decisions. The shares should be sold to have more shareholders and more voice of reason.
  • The poorest performing sector was merchandising because of the failure of Kmart. The company should employ new merchandising experts.

What

  • The MSO is a brand that needs to protect itself from future scandal.
  • It is a strong competitor in providing home equipment and can better this by expanding into the manufacturing of the simpler stuff instead of outsourcing.
  • More product offerings should be made.
  • Employees make a company and MSO needs more employees to replace those they slashed if the work is to be done.
  • MSO should offer better security to their employees by promising them job security.
  • New licensing deals made should always be evaluated monthly to show if they are profitable or not. If they are not working, they should be cut off.
  • The company also hardly involved employees in its decision making and this cost them because the employees may be the missing link to all this madness.

When

  • When internet horizons expand, the company should be timely.
  • When consumer preferences change, the company should expand to fit them in.
  • If something is not working out it is time to move on to the next big idea, sticking with old shows will not help the company.
  • It may be time that the company considered rebranding altogether.

How

  • To boost sales, the company ought to make sufficient research into new ventures well first before diving into them and making loses.
  • The company should be law abiding and distance itself from false statements and interfering with justice.
  • The company should maintain partnerships that are working as well as seek others out to make progress.
  • Guaranteed royalties with partners should be thorough so that the company does not make losses from overpayments and also they don’t injure the partners.
  • Advertisement seems to pay well for this company and should be pursued in all sectors, online, on print, or on blogs. Anything that will catch the advertiser’s eye.
  • Compensation has caused major problems, as the company doesn’t seem to have a concrete structure. It should be in line with the revenue the company is making if profits are to be made.
  • Trading shares are low and employing financial experts to look at the situation will help sell shares.
  • The company may need to diversify its products to other personalities not just Martha’s products as people seem to have moved on. People like diversity and they may just win back new viewers.
  • The company needs to have employees sign contracts of work time durations to prevent them from resigning when they feel like it.