Playboy CEO details strategy
By Andrea Lamberti
Chairman and Chief Executive Officer Christie Hefner yesterday described for a Sloan School audience how Playboy Enterprises has recovered over the past decade from its financial low of 1982.
In her talk titled "Playboy: Strategies for Global Expansion," part of the Sloan School's Distinguished Speakers Series, Hefner also related the company's approach to conducting business, and how a business might be successful in the coming years.
Hefner presented a picture of Playboy Enterprises in 1982, the year she took over, and compared it with the company's more successful economic status today.
In order to regain financial stability from the debts and losses Playboy Enterprises had accrued by 1982, the company embraced three overall strategies to guide its approach to business. First, it "put a premium on liquidity," Hefner said, which helped the company to maintain a strong footing financially.
The "concept of strategic alliances" was another factor in Playboy's recent success, Hefner said. For example, Playboy has looked to small entrepreneurial publishers with an eye to investment, and either acquired them or bought shares in them.
Playboy Enterprises has also tried "to create a balance between controls and analysis, and action and risktaking" to guide the company's moves, Hefner said.
"We've moved around the world in a targeted way," Hefner said, explaining how Playboy has expanded internationally, and how it assesses a foreign market before introducing a product there.
For example, Playboy has introduced a line of clothing in the Soviet Union. The clothes are manufactured in India, which has an export agreement with the Soviet Union, and then sent there.
One factor affecting the US and world markets are the "geopolitical shifts we're all touched by," Hefner said. She predicted that, despite recent attention to and interest in the changes in Eastern Europe, the 1990s will see "explosive growth in the Far East as a market."
Playboy believes Japan will "become a bigger market," Hefner said, and that it will become more consumer driven, rather than export driven. Also, other countries in East Asia have rapidly expanding economies that in the aggregate form a market "every bit as big" as the Japanese market.
The company follows these shifts and expansions to track not only the demographics of markets, but the "psychographics" behind the trends, Hefner said. Demographics are "really only interesting if [a company gets] behind them . . . to determine what" the attitudes and expectations of a market are, she explained.
Hefner also described some of the bases behind decisions Playboy Enterprises has made recently and that the company will make in the future. One includes the concept that, regardless of economic "analyses and prognostications," there will continue to be a great deal of uncertainty in world economies.
Many of the business moves Playboy Enterprises has taken reflect the company's assessment of current trends in the world. Hefner believed that the coming decade will differ from the 1980s in that people will try to "get away from the workaholism" and obsessive attitudes of the 1980s.
Products that will succeed in the coming decade, then, will be the ones that respond to these trends in the marketplace, Hefner argued. These products will recognize the pace of consumers' lives; they will also require an "intensity" of commitment from the manufacturer/business to succeed.
Playboy magazine, for example, has attempted to respond to the characteristics and attitudes of US and world markets, and the format has evolved according to the company's assessment of those markets and populations today, according to Hefner. As readers' interests change, the format and focus of the magazine must change as well, Hefner said.
Playboy Enterprises has expanded internationally through the Playboy magazine. Fourteen editions of the magazine are published worldwide, and Playboy's goal has been make each edition "a reflection" of the country where it is published, according to Hefner.
Approximately 75 percent of each edition is "unique to that country," Hefner said, drawing on writers and artists from within the country. The remainder is US material, or material from another edition.