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How do overconfidence influence our decisions and judgements
How do overconfidence influence our decisions and judgements
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Martha Stewarts strategy style based on Michael Porter’s three key principles of effective strategic positioning is broad needs, many customers. This strategy is used to create a unique valuable position, with broad needs it is the varying domestic based books, supplies, merchandise and etc, that she sells to many customers who look to her as a domestic role model. In August of 2005 New York Times, an article mentions how her ten months in jail has given her time to think, along with come with the decision that the company will broaden their services to develop “a line of branded homes designed by the company and inspired by her aesthetic,” (Carr, C1).
Each strategy requires a trade-off in competing, Martha Stewart is very meticulous with details which can take time, allowing her competitors to release a product before she sees it fit to release hers. This costs her loss in profit, but with her eye for detail and good material when her product does come out she can make back the profit lost, because her customers known that when they buy her product they are being a quality item. Although, taking extra time to make sure the product is close to perfect as it can be, costs them some sales and the awe effect of being the first one to sell it on the market, this is the trade-off to continue to uphold the brands name of making good, long lasting products; which has also gained her a wide variety of loyal customers.
Not all strategies “fit” within the companies activities, some are hit and misses such as when Stewart placed Charles Koppelman to the board, where “he became chairman of the board in 2005, where he negotiated a paid consulting arrangement for himself. He was viewed as enabling Stewart’s self-regard as much as tending to th...
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...all the money they had already invested it was too costly to abandon and they should continue to focus on completing it.
With the success of past cookbook’s and Stewart’s new positive media publicity she used the anchoring & adjustment bias of decision making to decide that now would be a perfect time to release her new cookbook, even though the company at the time did not have very high viewer numbers and a poll showed only 52% would consider buying the new book.
Stewart used the overconfidence bias of decision making when releasing multiple products at once, thinking that all would sell like past products had, only to find that customers were unable to buy her products because of the recent downfall in the economy. This caused the company to lose money as their confidence in the products selling outweighed the current economic environment of their key audience.
Considering 4 elements of the marketing mix and the case discussion of the general trends in the industry, it seems that MCB is experiencing problem with place and determining its target market. The case provides many examples of the company's difficulties in gaining more retail locations, maintaining sufficient inventory level, and, the most important, improper positioning of its product, which impeded the MCB to reach its potential customers.
Everywhere you look, there she is. Martha Stewart has invaded every avenue of domesticity. Her "radiant presence... seems to be infinite, like that of the Almighty, or of Starbucks" (Lippert & Ferguson: 26*) The outposts of her "omnimedia empire" are quite fortified (Africannet page). Reigning over a vast technical spectrum, her multi-million, multi-media kingdom includes a magazine with a circulation of 1.2 million, a syndicated column, and a TV show with audience of 5.3 million, but she does not have an official web site (Lippert & Ferguson: 26). There are numerous webpages that fans and foes have dedicated to her.
Arthur, A., Thompson, Margaret, A., Peteraf, John, E. Gamble, A., J., Strickland III. (2014). Crafting & Executing Strategy: The Quest for Competitive Advantage 19e: Concepts & Cases. C6-C25.
An orange jump suit, handcuffs, and a jail cell seems like the life of a criminal, but what about a celebrity worth $638 million? For five long months that life was Martha Stewarts. Though Stewart was already a famous business women, this situation caused an abundance of drama and commotion. Stewart overcame this, by serving her time and becoming better, which is something she learned from her parents and throughout college. While prison was a challenge, she overcame it, and has impacted lives all over the nation since.
Sephora utilizes promotions and sales that are consistent with and it will enhance store image such as offering discounts in this recent weeks. Product image of Sephora versus availability in terms of manufacturers goal to create a positive image for the products and able to differentiate it from competing products by not only providing other branded products, Sephora also offered their in-house label of beauty merchandises. Moreover, promotion for specific product benefits versus price retailers such as Sephora wish that customers to purchase their merchandise in their store rather than competitors stores that also offered the same merchandise
Furrer, O 2010, Corporate level strategy: theory and applications, Taylor & Francis, New York, NY.
Porter, M. E. (2008). The five competitive forces that shape strategy. Harvard business review, 86(1), 25-40.
Adner & Helfat 2003, ‘Corporate effects and dynamic managerial capabilities’, Strategic Management Journal, Vol. 24, pp. 1011-1025.
Porter, M. E. (2008). The five competitive forces that shape strategy. Harvard business review, 25-40.
Thus, the main business tactics of the company in context of this business philosophy is ;
Kotter, J. P & Schlesinger, L. (2008). ‘Choosing strategies for change’. Harvard Business Review, July-August, 130-139.
Porter, M. E., 1999. The Five Forces that Shape Competitive Strategy. Harvard business review, p. 80.
John G. S., 2008: Strategically thinking about the subject of Strategy [e-journal] 9(4) p.2 Available through:
Organisational change can arise due to a change in strategy and this begins with examining capabilities and the internal environment. This is portrayed in the Strategy diamond. Firstly through arenas the organisation can plan where they will be active in and which part to place most emphasis on for example technologies or value creation strategies. Only after determining this can they implement a positive change, leading to the next element, vehicles to get them where they need to be such as alliances. This can lead to change in management along with strategic partnerships, and the way managers transition to this change will determine if the strategy impacts on the overall organisation in a way that reinforces its purpose and goals. Partnerships indicate how an organisation can strengthen its capabilities by merging with businesses who possess the skills they lack. (Carpenter et al. 2010)
consumers will buy impulsively when they see them in the store. It is with this strategy