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Martha Stewart Living Omni media Inc. MSO

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Scarcity is defined as, a situation in which the amount of something available ... MSO's sells these products at Kmart in the U.S., at Sears in Canada and at Seiyu ... – PowerPoint PPT presentation

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Title: Martha Stewart Living Omni media Inc. MSO


1
Martha Stewart Living Omni media Inc. (MSO)
  • By Matt Kozera
  • Andrew Harsh

2
Table of Contents
  • What is economics?
  • The Company
  • Martha Stewart Timeline
  • Supply and Demand
  • MSOs Share Prices
  • Products
  • Factors of production
  • Target Market
  • Types of Markets
  • Competitors
  • Opportunity cost
  • Cost (Revenue and Expenses)
  • Specialization
  • What is happening to MSO?

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3
What is Economics?
  • A basic definition would be, the study of choice
    under conditions of scarcity.
  • Scarcity is defined as, a situation in which the
    amount of something available is insufficient to
    satisfy the desire for it.
  • As individuals we have a scarcity of time and
    spending power.

4
The Company
  • MSO started in 1999
  • The company has 544 people employed
  • The eight core content areas in the company are
    Home, Cooking Entertaining, Gardening, Crafts,
    Holiday, Keeping, Weddings, and Baby Kids
  • Located in New York, New York

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5
Martha Stewart Timeline
  • Born 1941 in a Polish-American family
  • 1982 had her first book published, Entertaining
  • 1993 she debuts her TV show, Martha Stewart
    Living
  • 1999 MSO goes public in the New York Stock
    Exchange
  • 2001 Stewart sells almost 4,000 shares of InClone
    Systems stocks the day before the company crashed
  • 2001 jury convicted Stewart of obstructing
    justice, conspiracy and lying to investigators
    about the selling of stocks
  • June 17, 2004 sentencing is scheduled where she
    could face up to 20 years in prison

6
Supply and Demand
  • Factors of Supply
  • Input prices
  • Number of sellers
  • Expectations of sellers
  • Prices of alternative goods
  • Technology
  • Example If the Input prices of MSO were to
    decrease this would result in an increase in the
    supply of those goods.

7
Supply and Demand Cont.
  • Factors of Demand
  • Income
  • Number of consumers
  • Expectations of buyers
  • Prices of related goods
  • Tastes
  • Example If more potential consumers were to
    enter the market that MSO is established in this
    would result in a shift in the demand curve to
    the right.

8
MSOs Share Prices
  • Blooming or Wilting??
  • Wilting- Share prices have dropped from 3.00 in
    2002, and estimated to range from 0.39 0.59 in
    the next year.
  • Is Martha Stewart the person, Martha Stewart the
    company??
  • Yes- Ever since her involvement in the InClone
    Systems scandal the company has been at the
    bottom of the barrel.

9
Best Selling Products
  • Slovakian Easter Eggs (29.00)
  • Silpat Baking Mats (24.00 -40.00)
  • Personalized Heirloom Photo Albums (79.00 -
    139.00)
  • Lip Balm Kit (16.00 - 39.00)
  • Clear Topped Containers (15.00 - 59.00)
  • Wire Tree (69.00)

10
Factors of Production
  • The Four Factors
  • Land
  • Labor
  • Capital
  • Entrepreneurial Activity

11
Land
  • The physical space on which production takes
    place, as well as the natural resources found
    under it or on it, such as oil, iron, coal and
    lumber.
  • The production of MSOs products takes place
    primarily in New York. MSOs sells these
    products at Kmart in the U.S., at Sears in Canada
    and at Seiyu Ltd. Stores located in Japan.

12
Labor
  • This is the time human beings spend producing
    goods and services.
  • There are 544 full time employees at MSO.

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13
Capital
  • The long-lasting tools people use to produce
    goods and services.
  • Two Types
  • Physical Capital Buildings, machinery, and
    equipment.
  • Human Capital The skills and training that
    workers possess.

14
Capital Cont.
  • Physical Capital
  • Most of the physical capital for MSO is located
    in New York City. This includes buildings where
    many business decisions take place (Office
    buildings) and other production
    buildings/factories where most of their products
    are made through the use of machinery and
    tools/equipment.

15
Capital Cont.
  • Human Capital
  • When MSO is in the process of training people for
    their staff they let these new employees follow
    around and work with established workers in the
    company. This gives these newly acquired
    employees a chance to gain enough Human Capital
    through other employees to get started at MSO.

16
Entrepreneurial Activity
  • The process of recognizing opportunity and then
    proceeding to take advantage of that opportunity.
  • In 1993 Martha had her debut T.V. show called,
    Martha Stewart Living, she then proceeded to
    take advantage of her success when she took her
    company public in the New York Stock Exchange.
    (1999)

17
Target Market for MSO
  • The target market for a company depends upon the
    items theyre selling and to whom they wish to
    sell these items.
  • The most productive area of Martha Stewarts line
    of products happens to be in her Martha Stewart
    Living section. This section is made to appeal
    to primarily college-educated women between the
    ages of 25 to 54. This is the primary market for
    the majority of Martha Stewarts products.

18
Types of Markets
  • Monopoly - A monopoly is a single seller of a
    good or service that has no close substitutes.
  • Monopolistic Competition Many firms that are
    selling differentiated products, but are still
    close substitutes. Free entry and exit.
  • Oligopoly A market structure in which there are
    a few dominate firms.
  • Perfect Competition The most common type of
    market where there are many buyers and sellers of
    a standardized product and there are no barriers
    to enter or exit.

19
What market is MSO in?
  • MSO is in a Perfectly Competitive market. MSO is
    comprised of 4 business segments which happen to
    be highly competitive. Those segments are
    Publishing, Television, Merchandising and
    Internet/Direct Commerce. It is through these 4
    segments that the merchandise in the 8 core
    content areas of MSO is created and distributed
    to its consumers.

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20
Competitors of MSO
  • (MDP) Meredith Corporations
  • -Edwin Thomas Meredith founded the company in
    1902 when he began publishing Successful Farming
    magazine. Since then, the company has grown to
    employ more than 2,800 people throughout the
    country, with corporate headquarters located in
    Des Moines, Iowa.
  • (TWX) Time Warner Inc
  • Time Warner Inc. is the world's leading media
    and entertainment company, whose businesses
    include filmed entertainment, interactive
    services, television networks, cable systems and
    publishing.

21
Opportunity Cost
  • The true cost of something is what you give up to
    get. This includes not only the money spent in
    buying something, but also the economic benefits
    that you did without because you bought that
    particular something and thus can no longer buy
    something else.
  • Implicit Costs The cost of inputs for which
    there is no direct money payment.
  • Owners land (foregone rent)
  • Explicit Costs Money paid out for the use of
    inputs.
  • Employees wages, cost of raw materials.

22
Other Costs and Revenue
  • As of June 30th, 2003 these were MSOs total
    expenses
  • Operating Costs and Expenses
  • Production, distribution and editorial 35,473
  • Selling and Promotion 13,724
  • General and Administrative 13,028
  • Depreciation and Amortization 2,054
  • TOTAL 64,279

23
Costs and Revenue Cont.
  • As of June 30th, 2003 these were MSOs total
    revenues
  • Revenues
  • Publishing 39,617
  • Television 6,588
  • Merchandising 11,768
  • Internet/Direct Commerce 7,814
  • TOTAL 65,782

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24
Specialization
  • A method of production in which the company
    chooses to concentrate on a limited number of
    activities. Most often these are the activities
    producing the most profit for the company.
  • MSO has selected 8 core areas in which they
    specialize and concentrate their efforts towards.

25
MSO Specialization
  • Home Decorating, collecting and renovating.
  • Cooking and Entertaining Recipes, techniques and
    indoor and outdoor entertainment.
  • Gardening Planting, landscape design, and
    outdoor living.
  • Crafts How-to projects and similar family
    activities.

26
MSO Specialization Cont.
  • Holidays Celebrating special days and special
    occasions.
  • Keeping Home-keeping, organizing, pet-keeping,
    clothes-keeping and restoring.
  • Weddings All aspects of planning and celebrating
    a wedding.
  • Baby and Kids Cooking, decorating, crafts and
    other projects of celebration surrounding infants
    and children.

27
What is happening to MSO?
  • On March 15th, of the current year Martha Stewart
    was convicted on all four counts in her
    obstruction to justice trial. This graph is a
    representation of MSOs stock on that day. You
    can see that MSO had its stock tumble 22 after
    the verdict was in. The future is not bright for
    this company. They will in the very near future
    continue to see the number of shareholders fall
    and advertisers pull away. Martha is currently
    appealing the decision that could have her locked
    up.

28
Any Questions???????
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