Martha Stewart Company

Martha Stewart Company
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Martha Stewart Company
One of the proposed strategic alternatives that Martha Stewart Living Omnimedia Inc. can employ to improve its growth opportunities is better portfolio management. The media company needs to improve how it selects, prioritizes, and controls its programs and projects and align these processes with company strategic objectives and revenue generation. Martha Stewart Living Omnimedia Inc. decided to expand its operations to increase revenue generation and reduce overreliance on publishing. However, the company has made several poor decisions when managing its investment portfolio, including buying unprofitable investments without due research.
The media organization needs to improve the management of its investment portfolio by writing off investments that dilute the brand or are unprofitable. Portfolio management helps avoid ruinous outcomes that arise from poor research and economic downturns, over and above, reducing investment risks (Baptestone & Rabechini, 2018). However, the disadvantages of portfolio management include little downside protection during economic downturns and faulty forecasting resulting from incorrect or unreliable historical company data.
Another proposed strategic alternative Martha Stewart Living Omnimedia Inc. needs to apply is to reduce owner dependence: the media company relies on Martha Stewart's celebrity status to grow its brand. Despite increasing its service offerings, the company and brand were built around one person meant that the business was at risk if anything happened to its founder. This company founder dependency risk has affected the company’s continuity and ability to grow sustainably. Martha Stewart Living Omnimedia Inc. needs to diversify its talent base and groom other influential people to sustain the brand after Martha's departure. The media organization needs to build a management team that is passionate about the industry and understands the company's dynamics.
The advantages of reducing key-person dependency include the influx of new ideas and perspectives that challenge poor organizational culture and processes. A new management team with new perspectives will increase innovation and greater efficiency (Aebis, 2019). The disadvantage of this proposed strategy is the likelihood that with the shift in focus from the founder to a new management team, some critical institutional knowledge, experience, reputation, and creativity may be lost.
Although the information I gathered with my CLC group helped us develop and submit reports, I believe that locating more secondary data sources would have been of value in formulating recommendations. This paucity in available company information has prevented an exhaustive analysis of Martha Stewart Living Omnimedia Inc.'s financial and non-financial performance. As a result, the number of value-enhancing strategic alternatives my group could suggest was limited by the amount of information we could gather about the media company. We lack detailed and extensive company data on Martha Stewart Living Omnimedia Inc.'s operations, activities, revenues, and fiscal performance over the years it has been operating.
The financial analysis assignment revealed several insightful facts about Martha Stewart Living Omnimedia Inc.'s financial position. For instance, the return on total assets ratio showed that the media company compensates its shareholders very little money compared to its total assets. The 4.16% profitability ratio indicates that the organization generates little value, and strategies must be implemented to improve company productivity. On the other hand, the current ratio showed that Martha Stewart Living Omnimedia Inc. could pay off its short-term obligations, such as debts to be cleared within one year. Conversely, the debts-to-assets ratio showed that Martha Stewart Living Omnimedia Inc. is moderately leveraged, and the overall risk of investing or giving loans to the company is reasonable.
However, despite the excellent current and debts-to-assets ratio, the financial analysis assignment revealed poor capitalization of assets to facilitate product sales by the organization. This finding closely ties with the low price-earnings ratio, which assesses earnings per share and perceived investor confidence in the company's future success. The market currently has poor expectations of the media company's profitability. The benefits of forming a strategic alliance concerning profitability ratios are improved productivity and the ability to use company assets to augment sales, over and above, increased market expectations of Martha Stewart Living Omnimedia Inc.'s profitability.
A strategic alliance's organizational, political, and strategic advantages will improve the media company's overall liquidity, leverage, activity, profitability, and shareholders' return financial ratios, especially the last three. However, such a strategy will result in the better performing partner witnessing a short-term decline in its financial performance and even reduced shareholder confidence if investors are not happy with the strategic alliance. Some of the possible value-enhancing strategies include intensifying social media promotion efforts to push sales, harnessing the advantages of artificial intelligence to increase overall productivity, improving hiring practices to attract top talent that can increase company productivity, and focusing on long-term organizational success to augment market ...