History of Conde Naste - Essay Example

History of Conde Naste Table of Content Introduction 3 Company at a Glance 3 Strategic and Competitive Position of the Company 4 Business Models 6 Implementation of Porter’s Five Force Model 8 SWOT Analysis: Conde Naste 10 Strengths of the Company 10 Weaknesses of the Company 10 Opportunities for the Company 11 Conclusion 12 References 13 Introduction In this ever changing and dynamic world, the word ‘change’ is perceived to be only constant word (Institute for Strategy and Competitiveness, "What is Strategy?"). Today’s market is undergoing tremendous changes which in turn is also affecting the organizations. In order to sustain in this highly competitive market each and every organization is required to develop its strategies to define its competitive position in the market. It is very necessary for the companies to define its position in the market which shows the development and profitability (Institute for Strategy and Competitiveness, “What is Strategy?”). Here, in this paper a well known company named Conde Nast’s marketing strategies and business model is to be discussed so as to analyze its market position. This paper helps in identifying the strengths and weaknesses as well as opportunities and threats of the company, particularly in dealing with changing market environment, competition and digital development as business models. Company at a Glance The founder of Conde Nast Publication (CNP) was Conde Montrose Nast. This company was established in the year 1907 by him, which is now a part of the Advanced Publication. It is also a renowned name in the industry of journalism and magazine of America along with other developed countries as well. Now-a-days this magazine empire is owned by Si Newhouse Jr. and goes by the name of Conde Nast. With over 30 prestigious magazines under its umbrella, including the titles of Fairchild Publications, the organization is one of the best known magazine conglomerates in the world. The company is particularly well known for its fashion magazines. The organization has also established a mark for its impressive headquarters and well designed cafeteria (Conde Nast, “Conde Nast home”). Conde Nast is the parent company to some of the globally renowned glossy magazines. It incorporates every specialized magazine, straddling topics as diverse as sports, architecture, gourmet cuisine, travel, literature, fashion, social life and observations, home decoration and popular culture. By the 1990s, the organization accommodated more than thirteen high profile magazines including Architectural Digest, Vanity Fair, Vogue, Street and Smiths Sports Group, Interest in House & Garden, Glamour, Mademoiselle, Brides, Self, Gentlemens Quarterly, Gourmet, Bon Appétit, Condé Nasts Traveller, Details, and Allure. It even developed a plan of introducing online internet based publications and magazines. Earlier, in 1909 the famous magazine Vogue was taken over by the Conde Nast Publications (Conde Nast, “Conde Nast home”). Strategic and Competitive Position of the Company Today’s dynamic markets and technologies have questioned the sustainability of competitive advantages. Under the pressure to improvise its productivity and increase its market share, management have adopted some quality management tools known as Total Quality Management (TQM), benchmarking and reengineering among others (Institute for Strategy and Competitiveness, "What is Strategy?"). Competitive positioning refers to the strategies adopted by the companies in order to differentiate its products with that of its competitors and can create value for the product in the market which is also an attempt of increasing market share. It is the strategy of carving out a spot in the competitive market and tending the company to focus on producing and delivering goods appropriate to attain the opportunities offered by its target market. While preparing the strategies of positioning, organizations consider the fundamental factors of attracting the customers and retaining the valued ones with due significance to product designing, promotional strategies, and pricing with few others (Porter, “On competition”). Brand loyalty plays a vital role for a company to enhance its competitive advantages encouraging its competitive position in the market. With an intention to develop brand loyalties among the customers, Conde Nast has adopted various strategies. For instance, Vogue is the name of one of the renowned and most popular magazines published by the Conde Nast. This magazine concentrates on fashion trends. This is done with the motive of encouraging the readers of fashion magazine which can also be termed as the target customer group of this particular product. This is one of the types of brand hierarchy practiced by Conde Nast which help the organization to confine the value of brand loyalty even in this era of vigorous competitive market. This very strategy of confining the interest of the customers in long-run helps the company to strengthen its position in its target market. The success factor working in this case is establishing the brand loyalty among the customers. Customers who have a tendency of switching brands simply with an intention to select a different brand within the same group criteria, can be retained through the implementation of this strategy (Riesenebeck & Perrey, “Power Brands: Measuring, Making, and Managing Brand Success”) Emergence of internet has highly influenced the market environment of Conde Naste. Marketers have come up with various innovative ideas such as online shopping to encourage their sales growth adding to the organization’s market position. As commented by Van Wert, senior strategist of Conde Nast are responsible for transformative marketing schemes and guide programs that enhance growth opportunities in internet oriented marketing platforms and also help in brand extensions (Conde Nast, “Conde Nast home”). Other platforms offering growth can also be incorporated in the adopted strategic plans by the management of Conde Nast, such as paid digital content that shall assist in digital audience development. The company has taken initiatives concentrated on integrating multi-channel communications which will help in communicating with their customers directly or indirectly further affecting their profitability. One of the strategies adopted by the company with an intention to influence its competitive position in the market is developing multi-platform products which activate life-cycle marketing (Conde Nast, “Conde Nast home”). Business Models Business models consist of the components and functions of the business with due consideration to the revenue it gains and the costs it incurs along with the organizational objective. Every company adopted a few strategies with the intention to incorporate business models in their marketing and business operations. It is worth mentioning that the complexity of the business models depends on the need of the organization as well as on the market structure it operates in. Well developed business models can boost the company revenue along with its competency that in turn is expected to reward the business with better growth prospects (Investopedia, “Business Model”). Conde Nast even concentrates in developing the magazines which can be accessible through computer, iPad and even mobile phones. For this the company has collaboration with the famous iPad manufacturing and marketing companies such as Apple. However, the company had to face various challenges in its initial stage of developing an internet-oriented business model (The New York Times, “For New Yorker on iPad, Words are the Thing”). In this context the intention of the company is to attract the customers who tend to consider the internet sources as quite significant for their shopping, social networking and other extra curriculum activities to a large extent (Investopedia, “Business Model”). In the past, Conde Naste had to face significant challenges in establishing a successful business model. In order to overcome the challenges of continuously changing market trends, the company adopted various strategies with the intention to attract valuable customers and thus attain a greater market share. These strategies mostly include subscriptions of magazine, advertising branded products and events, publishing advertisement from other parties and so on. Recently the company also launched The New Yorker Application which is an iPad promoting the published magazines. Notably, the success of the device in creating customer demand can be considered as an example of the implementation of successful business model. The company also maintains its presence online coupled with life style based websites. Furthermore, Conde Nast can be observed in various occasions such as socialites or fashion shows keeping it active among its customers which in turn facilitates its brand recognition in the global market (The New York Times, “For New Yorker on iPad, Words are the Thing”). Implementation of Porter’s Five Force Model Figure 1: Porter’s Five Force Model Source: (The Resource Alliance, “Porter’s Five Forces Model”). Conde Nast is a company dealing in publication industry for many years maintaining high goodwill among its customers. Magazine industry is growing rapidly in terms of innovations and diversity due to which the threat of entry is competitively high in this industry. However, the threats from new entrants are negligible for this company at present as it acquires a significant market share which provides it with high competitive advantages over the new entrants. As Conde Nast pays full attention in preparing the contents of it’s each and every magazine offering quality assurance, it is able to differentiate the products from its rival. This also enhances the competitive advantages enjoyed by Conde Nast (Conde Nast, “Conde Nast home”; PricewaterhouseCoopers, “The Medium Is the Message: Outlook for Magazine Publishing in the Digital Age”). Despite of these virtues, the organization faces significant challenges in terms of substitute products such as sports magazines or entertainment magazines and so on (PricewaterhouseCoopers, “The Medium Is the Message: Outlook for Magazine Publishing in the Digital Age”). Thus, the threat of substitute should be dealt with effective care and remedial strategies should be taken accordingly. Active involvement of the company in the market can be of huge help in this regard. Conde Nast is quite aware of the process and thus has incorporated various strategies to attract new group of customers and retain its old customers with the intention to gain competency in the global market. Following the market trend continuously can also be observed as an effective strategy adopted by Conde Naste so as to observe the changes occurring and redefining the strategies accordingly (Conde Nast, “Conde Nast home”). SWOT Analysis: Conde Naste Strengths of the Company As Conde Naste acts as the umbrella for various high profile magazines, it possess a strong and competitive brand recognition the global market contributing as one of the strengths to the business It maintains high quality contents in its publications focusing on the purity of journalism Weaknesses of the Company The company operates its business targeting the customer group of high socio-economic groups only. So the lower class people are ignored, constraining the market potential in the developing era of 21st century The cost plays as a greatest barrier for this company as the products are served at higher price which is less suitable for lower socio-economic groups Opportunities for the Company Conde Nast products are highly diversified, serving the needs of the maximum customers Conde Nast publications are easily available in stores as well as through internet that shall assist the company to reach a larger market area Threats for the Company Magazine industry is currently facing fierce competition in terms of the emergence of news channels and fashion channels Customers losing interest in print media can be termed as one of the biggest threats for the publication industry Conclusion A noteworthy example of how a brand image can be influenced to improve customer retention is demonstrated by Conde Naste. The magazines published by the company are not limited in terms of variety. It is widely diversified which can be termed as one of the core concepts behind its success. The company strategies can be observed to be entirely focused on customers’ needs with the intention to provide them with related contents in its publications and thus derive optimum customer satisfaction to gain competitive advantage. In this context, the company operates in various sectors of the society targeting a broad target market. Concentrations on latest techniques for better perfomance and tie up with companies that can facilitate the growth of the company were the most effective strategic tools to reward competency to Conde Naste (The New York Times, “For New Yorker on iPad, Words are the Thing”). Conde Nast has also been observed to pay appropriate attention on choosing content of the magazine so that it can provide with quality assurance to its customers and thus attain higher customer satisfaction and brand loyalty (Conde Nast, “Conde Nast home”). References Conde Nast. “Conde Nast home”. October 20, 2011. Visit Our Sites, 2011. Institute for Strategy and Competitiveness. "What is Strategy?" October 20, 2011. Competitive Strategy, 2011. Investopedia. “Business Model”. October 20, 2011. What Does Business Model Mean, 2011. Porter, M. E. On competition Harvard Business Press, 2008. PricewaterhouseCoopers. “The Medium Is the Message: Outlook for Magazine Publishing in the Digital Age”. October 20, 2011. Entertainment & Media, 2008. Riesenebeck, Hajo & Perrey, Jesko. Power Brands: Measuring, Making, and Managing Brand Success Wiley-VCH, 2009. The New York Times. “For New Yorker on iPad, Words are the Thing”. October 20, 2011. Media & Advertising, 2011. The Resource Alliance. “Porter’s Five Forces Model”. October 20, 2011. The Big Ideas, 2011. Read More