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Oprah Winfrey had a hard life growing up. She lived with her single mother, who was constantly working trying to provide for her kids, for a number of years and struggled with hardships such as being raped and abused by her care-takers. She later moved to live with her father who focused heavily on her being studious, being religious, and working hard. Oprah was naturally a great public speaker and loved books as well because they offered her views of the outside world and that she didn't have to be stuck in the hardships she faced. This love of books helped give her the drive to succeed in life. Furthermore, her joy and aptitude for public speaking, her drive to make something of herself, along with the diligence instilled in her by her father allowed her to become successful later on in life and helped her overcome her adverse childhood. She used her crucible experience in shaping herself as a talk show host by holding to the values she believed in and showing the hardships of people, coupled with herself, as a means of helping others overcome their struggles. It gave her a unique attitude as a talk show host and a persona that people could rely on and trust.
Oprah is motivated by her beliefs and her desire to help people. This is quite different than the motivation of other entrepreneurs. Most entrepreneurs are driven by money but Oprah has a unique quality. She wants to be successful, but she has an overwhelming love of people and their needs and is motivated by the struggles of others. This does not mean that she would work for free. Oprah has been quoted to saying, "My focus has never been on money." This could easily be seen as a true statement, but the money that comes along with her vast success is important to her ability to help others. The more money she makes, the more good she can do for others, whether that be donating money to charities or even starting her own foundations. Also, that money keeps her show and all her other ventures going so that she can continue to help people by showing her audiences and the world the ability to overcome any hardship. Oprah has also been quoted saying, "You are solely responsible for your life." What she means by this is that no one is going to make you overcome your hardships. Help from others is always encouraged, but when it comes down to it, you have to take the reins and have the drive and determination to overcome what is afflicting you, whether that be addiction, debt, etc. These comments that she makes have helped transform her from "I" to "We" meaning that by building her enterprise and gaining success, she is now able to help millions of people worldwide. This transformation has impacted her success through her work because her values have become values of her audience. She has become a person that millions of people put their trust in and believe in her opinions because of her solid morals and model character. Her success in her work has garnered her success as a philanthropist as well.
As an entrepreneur, Oprah found a hole in the marketplace and filled it. Before her, there really were no talk shows hosts that people could trust and find guidance from. She provided people with help for any problems they faced. Audiences could take what was shown on Oprah' shows and apply the teachings to their own lives, and with her caring and empathetic personality, they could trust in her and in what she said. Other shows of the time focused on touchy or risqué subjects such as incest and etc. but offered little guidance to their audiences. This is where Oprah's value proposition lies. She offered sound advice in a warming atmosphere that people could believe as well as be entertained by. Simply put, her personality, character, and beliefs gave her an edge over others in the market because she was more trustworthy and people could identify with her.
Oprah's business model and the way she makes most of her money is through selling advertisements. The enormous success of her talk show, her magazine, her website, and her radio program drove the prices of ad slots way up. Advertisers are willing to pay big money for their ads to appear during Winfrey's airings, in her magazine, and on her website. Harpo also makes money by charging licensing fees to local stations around the country. Furthermore, Oprah has ventured into studio production of movies and the acquisition of cable stations, as well as numerous investments in other areas.
Oprah has a relationship with the company King World in that King World syndicates and distributes the program to stations and works out deals with Oprah and with the stations. Winfrey was able to gain control of her show from the network and then she could deal with negotiations with King World herself. She was then able to gain more leverage with King World but was also able to collect licensing fees as well. Over the years, King World's percentage of profit from the show declined because of the leverage Oprah had due to her success.
There is a definite paradox of corporate entrepreneurship present in Harpo Productions. The company encourages new ideas and progress but at certain limits. Even an idea for the company or the show will undoubtedly provide interest from the audience or guaranteed success and ratings, if the idea doesn't fit Oprah's core values, it is discarded. This has happened numerous times in the history of Harpo. Oprah is very strict on her beliefs and anything with her name attached to it must adhere to these beliefs. So there is a paradox in that too much innovation and intrepreneurship is against what Oprah wants for her company, but it should not be eliminated entirely (The Paradox of Corporate Entrepreneuship). Oprah has kept her company private for the main reason of wanting to keep control of her company. She wants to be the final voice of what gets produced by Harpo making sure that it reflects herself. The drawback of this is obviously, profit. Being private, the company cannot sell stocks and so this eliminates some revenue.
Winfrey, in her company, was able to build some key organizational patterns that add to her success. As determined, smart and driven Oprah is, she can't take care of everything in her company so she has a team that helps her with different aspects. It is organized into leaders for different aspects of the company, being financial, marketing, legal, and also having managers of her show, her radio program, her magazine, and her website. These managers and divisions of her company have a lot of control in putting together their individual projects but Oprah has final say over everything. This has proven to be a great tool for the success of Harpo.
An evaluation of Oprah's business model shows that each segment or venture of her company is self sufficient but also adds to the success of on another. Her magazine adds to the success of her show and to the radio show and to her website and vice versa. Each venue also opens up opportunities for different audiences and people with distinctive schedules. People, either because of work or etc, who aren't home to watch Oprah's television show can pick up her magazine or tune into her radio program. People who are more at home on the internet can turn to her website. Because of these aspects and the tremendous success of Oprah and Harpo Productions, Oprah should be awarded an A+, if she were to receive a grade. The Oprah Winfrey brand is a powerful tool in marketing as well. Anything with Oprah's name on it is guaranteed to be successful just because people trust and believe her opinions. The strength in this is that she can help other organizations and also authors. The weakness here, though, is that if her brand appears on something that becomes controversial or negative, she could receive some flak for it. An example of such would be with the book, A Millions Little Pieces, whose author was found to lie about details of the book.
An evaluation of Oprah as a person shows that she is the person she claims to be. She upholds all her values and beliefs strongly and is definitely a philanthropist. Her many contributions to organizations and charities and her constant drive to help others shows a deep love of people and somewhat of nurturing personality. She undoubtedly is a caring and loving individual who strives for the greater good in life. As an entrepreneur, she has proven to be successful and innovative in her ideas, projects, and her company. She has the ability to think "outside the box" and come up with new ideas to reach different markets, this being through T.V., radio, magazine, internet, etc. (Class Powerpoint). She is an outstanding entrepreneur given her success and achievements she's made. Winfrey is a quality leader as well. The trust and reliance people have in her is not misplaced and she leads her followers for the greater good, helping them and empowering them. The source of her power is her trustworthiness and her giving/caring personality. Her fans would likely go to the ends of the earth for her and this all due to the way she holds herself and her ability to be a positive role model moral leader. There are many leaders she could be compared to throughout history. One leader that she likely would never be compared to but is indeed very similar to is Hitler. Of course, Oprah would never perform the atrocities of Hitler but some qualities are very similar. Both are outstanding public speakers with the ability to sway the views of the public and influence their decision making. Each is incredibly passionate and were/are successful in gaining followers. Another comparison that could be made is with Martha Stewart in the sense that the things both of these people endorse, people are more likely to buy. Both have a sway over people that can influence their decision making and how they spend their money.
Oprah seems to be heading in a new business direction. She is keeping to her roots in T.V. as well as radio, internet, and in print publications, but she is moving forward as a leader in venues of philanthropy and charity and well as politically. Her voice is heard by millions worldwide and her opinions tend to be her fan's opinions so she has the power to influence others. She can help political officials get elected by announcing her support and she can help charitable organizations by doing the same. Strategically, she isn't really taking her company in many new directions, other than towards a charitable direction. This includes her founding of schools in South Africa and etc. An exit strategy for this is not apparent.
I learned from this case that entrepreneurial leadership is not always money driven but that greater goals can be achieved. Leadership can be more about core values and upholding beliefs than about the desire to be rich, as Oprah has proven. Things that can be learned about business going forward from this case is that it is possible for business to strive for integrity and ethics, and that all business has something to learn from Oprah. The ability of Harpo to evolve to fit the needs of different markets is also a huge part of businesses moving forward and their success as well.
General Product Description
Harpo Productions is a company focused around Oprah Winfrey. It started out based around Oprah's talk show but broadened to radio, a magazine, website, as well as a movie studio and ownership of cable networks. It also is involved in many charitable negotiations and investments. The company sells its magazine but its real source of revenue is the ad slots it sells on T.V., her radio program, in her magazine, and on her website. Also it gets money from licensing fees it sells to stations and other investments and stocks it owns. This revenue is based on the success of Oprah in that more money can be gotten for the ad slots base on the millions of people who will see the ads. The people who will watch Oprah's show or read her magazine, etc. are most likely women, probably of middle age but basically anyone is a potential customer/consumer/viewer. People will buy the product because of the help and guidance it gives people ranging from personal help, to debt management, to quality products, to good books to read. They can trust what Harpo Productions produces because it has Oprah Winfrey's name on it. The public sees Oprah as a moral leader and someone they can trust and rely on and so this adds to the success of her company and provides the reasoning to why people would buy her products and tune in to her show. As far as location is concerned, a large studio is needed to tape television shows, make movies, produce magazines, and tape radio programs. A separate facility is likely needed for making the magazines. These facilities must be quite large and an office building might be needed as well.
There are really no suppliers to Harpo Production because they are self sufficient in what they do. They don't sell products besides ad space for the most part so they don't really have suppliers. Some competitors of Oprah and Harpo Prodcutions would be rival shows that air at the same time as Oprah's talk show such as Ellen DeGeneres' show, Maury, the Jerry Springer Show, Tyra Bank's show and, in the past, Martha Stewart. Other competitors to her show would be cable television and DVR devices that record television. DVR devices can record shows and then viewers can fast-forward through the commercials. Other magazines, such as Martha Stewarts magazine, Home and Garden and etc are sources of competition. Also, other radio programs provide competition. Currently, Harpo Productions employs over 290 people which exemplify the labor required.
Requirements for Success
Oprah serves an under-served need in that she fills the gap of a trustworthy and charismatic talk show host with more in mind than ratings and making money. People can tell that she truly cares more about them and the world's needs than about herself or money, and so she serves the need of that celebrity personality people can rely on. In the market she is catering to, demand obviously exceeded supply in that advertisers are an endless commodity, as far as making money goes, and that there are a seemingly endless amount of people who own a television, read magazines, listen to radio, or get on the internet that Oprah is trying to attract. Oprah does not provide a better price or location but the advantageous situation that she is in is that her personality gave her an edge over anyone competing. People like that she takes into consideration the plight of humanity and focuses more on that than on ratings and entertainment thus giving her that edge. Oprah essentially has no restrictions for production or on any ventures she wants to pursue. She basically could do anything she wants given that things like money, personnel, skills, etc. are of no factor and do not restrict her. Capital requirements for market entry would include the cost of a studio facility and the cost to air the shows, etc. There are no detrimental environmental effects from what Oprah does other than the magazines people buy eventually ending up in a landfill possibly.
Oprah can easily draw viewers from anywhere in the U.S. and all over the world. The most prevalent places for viewers and potential advertising customers are New York, Los Angeles, Chicago, and Philadelphia as these are the largest television markets in the U.S. The number of households for each city respectively is: 7,376,330; 5,402,260; 3,399,460; and 2,874,330. This gives a lot of households the opportunity to watch T.V. New York alone hold over 6% of the total U.S. households with T.V. Also, since Oprah is based in Chicago, the citizens of Chicago are likely to be more interested in her show. The average family size in each of these areas is between 3 and 4 people. The per capita income of New York is $30,415 similar numbers ranging for the other cities as well. The population growth trend of New York, L.A., and Philadelphia is that the populations are on the rise. Chicago however has been on the decline recently. The price of the product isn't really a concern to the viewers of Oprah's media and it's not a concern of the advertisers either because they are willing to pay premium dollars for a spot on a high rated television show and popular celebrity. Oprah appeals to almost everyone. Anyone can pick up Oprah's magazine, tune into her show, or listen to her radio program and find something they like about it. Therefore, there is definitely enough market size for profit. The marketing approach is mostly marketed toward middle aged women for homemakers are likely to be home during the airing of her show. The commercials on during her show reflect that of interest of middle aged woman. Products appear that middle-aged women would likely be interested in and buy.
Some major competitors would be Jerry Springer, Tyra Banks, and Marta Stewart. Jerry has a strength in that he entertains people with touchy subjects and sexual topics but he doesn't have the morals that Oprah upholds which is somewhat of a weakness. Tyra's strength is that she appeals to a younger crowd but she doesn't have the influence over people that Oprah has because her show is much newer. Martha Stewart's strength is that she provides more home and garden advice to her viewers than Oprah but she got into legal troubles that hurt her credibility. New competitors would like to expand their services but are having a hard time because they are not as popular and don't have the influence that Oprah has developed. They just aren't as charismatic as Oprah and not all of them appear as trustworthy as Oprah. Martha Stewart's program is no longer on air because she went bankrupt. Her legal troubles hurt her credibility and trustworthiness. Oprah contains most of the market share and it is likely to stay that way for quite some time. The risk associated with the business is that Oprah might endorse or say something that contradicts her core values. Though she works hard to never do that, there is still a possibility and some risk involved.
Harpo Productions will create revenue mostly from the ads it sells for T.V., in the O Magazine, on Oprah's website, and on the radio. It also will gain revenue by selling magazine subscriptions, on the movies Oprah's studio makes, and through other investments that Harpo has. There are also licensing fees involved with stations airing Oprah's shows. The large number of ads and the price of the ads make up most of the size of the revenue. The advertisement revenue is likely to grow and has grown with the increased success of Oprah and the growth of Harpo Productions. This is also true for the growing success of Oprah's magazine. This is not a franchise suitable business. Cash flow is likely to be and already is positive. It's likely to continue this way for years to come.
The cost of production is the biggest cost that has the greatest impact on the company. There is a large cost involved in producing television shows, movies, radio programs, magazines, and upkeep of her website. There are fixed costs of the studio and building involved with Harpo Productions and variable costs of production and obviously employment. The cost of production and cost of employment are fairly large but important parts of the business. The employees of Harpo are a huge part to their success so this cost is well worth the expense. These cost drivers are subject to change over time with the changing costs of employments and obviously production cost are susceptible to change as well.
A large cash sum is required for launch of new business models but exact numbers are unknown. When Oprah founded and founds new ventures, such as when she developed her magazine, there is a large expense required for these startups. As far as working capital, a large cost margin is required to sustain the business but the profit far exceeds the cost so working capital is not a deterrent to keeping the business going. The cash expended will indeed produce a viable business entity as Oprah Winfrey and Harpo Productions has already proven.
Critical Success Factors
The elements of Harpo Productions that are most important to achieving profit are Oprah's personality and leadership as well the companies numerous ventures. Oprah's company is founded on her core values and she has developed the trust of millions based on her warming and moral charisma. This persona is key to the company's success and profit. Also, the fact that the company has dipped into many different ventures, including television, radio, print, movies, internet, and philanthropy, has added to their success and allowed Harpo to reach different markets and more potential customers/viewers. This larger audience adds to the company's profit and success. Oprah's persona is not difficult at all to execute because it just a natural part of who she is but her broadening into different mediums was a bit more difficult because of the cost and risk involved. In all likelihood, Oprah will continue to innovate and adapt to changing markets over time and as new technologies and mediums become alive, she will likely try to find ways of reaching these markets. The critical success factors of the company are the ability to keep to Oprah's core values, which are fundamental to keeping the company's and Oprah's image. If she can stick to these fundamentals, she will continue to see success as she already has. The risks involved with this is that changing values and views of the public might be suspect to change as time goes on but this will likely not affect Winfrey's attitude. One strategic factor that could be considered and would likely provide future success would be an Oprah Winfrey documentary retailing her hardships and struggles of her early years and her rise to success. This has potential for enormous success among the multitude of Oprah fans. Her story is quite moving and many can empathize with her plight and would be able to apply the story to their own lives in order to learn something. Oprah and her company have the capability to make such a movie and there is nothing stopping them from producing it. This would be one strategic factor that could be considered for future success.
Oprah vs. Class Feasibility Company
When comparing and contrasting Oprah with the company I9 Sports, there seems to be few similarities. Each has its own historical background, Oprah rising to success from humble and troublesome upbringings and I9 being a recreational sports league. Their industries are completely different, Oprah being in the television and entertainment industry and I9 being a sports league for children. Though each industry has its own competitors, competition is fierce for both companies. Oprah has to compete with other television shows and personalities as well as other magazines, radio shows, and etc. I9, being a franchise company, has to compete with local sports leagues and established businesses such as YMCA. Each tries to have a competitive edge over its rivals Oprah focusing on her core values and sticking to her charismatic personality for success while I9 tries to stress the importance of fairness and improvement of skills for all children not just the more talented child athletes. Equal playing time is important to I9. They each have different organizational structures for their companies, Oprah being the overall leader of her company with managers for different divisions and I9 franchising its company with a corporate section for leadership. Change drivers for both do dependent on the changing markets, however. The markets are different and will likely change in different ways for both companies but they will each likely have to deal with somewhat similar change drivers in their own respective markets. Oprah's company strategy, besides making money, is to help people and provide guidance and support for people in need. I9 is more concerned with the money aspect with underlying cares about helping the nation's youth through sports and equal playing time. There aren't many similarities between Oprah's company and I9 Sports but each has its own factors for success and already have proven that they can be successful.