Kindle Situation Analysis


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Kindle Situation Analysis

  1. 1. The Kindle Book Situation Analysis Campaigns 459
  2. 2. Stacey Ackerman, Tom Bass, Juliette Burguieres, Brian Cash, Dan Mozer Table of Contents 1.Amazon Company Information A.Kindle History B.Kindle Mission 2.Current Users 3.Geographic Users 4.Purchase Cycles 5.SWOT Analysis A.Strengths B.Weaknesses C.Opportunities D.Threats 6.Competition 7.Summary of Tasks
  3. 3. Company Information  was founded in 1994 by Jeff Bezos based out of his garage in Bellevue, Washington. After receiving large investments from two businessmen, Bezos began looking for other ways to improve his website, he added book reviews, allowing the site to attain a more community feel rather than just a vendor site. By 1997, had pulled in $15.7 million in revenue, and officially went public as a company. By 1998, the site was offering items other than books such as CD’ s, movies, electronics, video games, toys, and home improvement materials. By 1999, the site has made over a billion dollars in sales Amazon faltered for a short time in 2001 due to the economy with a reported loss of $1.4 billion, which led to severe cut backs including laying off almost 1,000 workers. Bezos’ solution to the failing company was to recruit other companies to sell their products online. The profits Amazon shared with these companies from this idea led to the resurgence of the site and ultimately saved the company. Today, Amazon remains one of the most popular online vendors in the world. History of the Brand November 2007, introduced the Kindle, an electronic book reader made to revolutionize the way we read books, newspapers, web blogs amongst other things.
  4. 4. The original price of the Kindle was $399. The price was eventually dropped to $359 in May 2008. Shortly after the price $40 price drop Amazon made a few changes to the Kindle including changes to its shape. February 2009, a new Kindle was introduced, it was thinner, crisper, contained a longer battery life, and had the capability to hold hundreds of more books. In May 2009, a third version of the Kindle was released, this version contained a screen 2.5 times the size of the original model’ s screen. It also made available three of the largest textbook publishers works. By July 2009, one company had illegally added books to Kindle users systems resulting in Amazon issuing refunds to consumers whose devices these illegal copies were removed from. July 2009, USA Today’ s Best Selling Books List announced it would include Kindle Book sales in their overall sales rankings. The Kindle contains almost all books currently being published, and the most obvious incentive in purchasing the Kindle is to save money on books. Consumers can purchase new releases for just under $10, while hardcover versions sell for much more. In addition to buying Kindle books, users can read books in Mobipocket or text formats with Amazon’ s email-based conversion service, as well as limited MP3 music support. Mission of the Brand
  5. 5. The Kindle’ s purpose is to bring the art of reading into the 21st century and to change the way we use social media. It is a conveniently portable device on which readers can store hundreds of titles and bring them anywhere they go. There is a subtle environmental goal for the device since this will reduce the need for paper and cutting down trees.
  6. 6. Current Users While there has not been much posted on the average age of Kindle users because it is a fairly new product on the market, certain blogs have made it obvious that since Kindle has been introduced to the market it has appealed more to the middle aged and retired demographics. According to one study that polled 700 Kindle users, 50% of all users are over 50 years old, and 27% of the total users who replied to the poll were over 60 years old. A blog found on Amazon’ s website titled Average Kindle Owner’ s Age made it very apparent that many user’ s young and old are buying the Kindle to help them read because they suffer from arthritis or poor eyesight.  A video from Amazon’ s Kindle website featuring current users told the story of 13 individuals who own the Kindle. All people featured appeared to be over the age of 30, and all currently had stable jobs. Including a few teachers as well as two business entrepreneurs. Geographic Users One major problem that faces potential Kindle users is the fact that it runs off of Sprint’ s Wireless Network, causing some places to receive little or no connectivity, which can limit where Kindle owners can actually use their device. Purchase Cycles With the Kindle’ s steep price ranging between $300 to almost $500, not everyone will be going out and buying the Kindle on a sudden whim. Most people featured in the Amazon user video received their Kindle at specific times of the year. The Holiday season from November to January seemed to be when most people received or bought their Kindle’ s.
  7. 7. However many bloggers also talked about buying it for the summer or beach reading season as well. With the addition of college text books being added to the array of books you can purchase for your Kindle, in the years to come Amazon may see a steady increase in sales during the months of July and August, the time when incoming college students prepare for their first semester away from home.
  8. 8. SWOT Analysis Strengths: •Slim- just 1/3 an inch oPortable, Stored Away Easily •Light weight- 10.2 (lighter than typical paperback) oGoes unnoticed while traveling, easy to hold while reading, •Wireless- 3G anytime anywhere no monthly fees or service plans or hunting for WIFI oInternet accessible at any time, no contractual obligations for services not rendered, pay as you go, access a large library at your finger tips •Books delivered in under 60 seconds oNo waiting, your kindle book doesn’ t need to be charged to download a book •Paper-like display- 16 shades of gray ( clear text and pictures) oEasy to read, not losing any features a book offers, •Long battery life- read for days without recharging oTravel long distances without needing access to a charger, leave your charger at home while vacationing on a trip •Carry your library- Holds over 1,500 books
  9. 9. oChange your reading material at anytime, if you get bored switch books on your personal library •Read-to-me- can read anything to you unless the books rights holder made feature unavailable oIf your on a trip your child at home can continue reading their books even if they are still learning to read, makes all books on tape, listen to your books while driving •Large selection- 350,000 books plus US and international newspapers, magazines, blogs oKeep up to date on world issues, access any paper with the portable internet, no worries to purchase a daily paper with an online subscription and daily updates •Free book samples- download and read first chapters before you decide to buy oBrings the book store experience to you, no commitment book purchases •Low Book prices- New York Times Best Sellers and New Releases $9.99 oSave money on books, expand your library with half the price, no need to wait in line to purchase any books •Eliminates eye strain oRead for hours without a head ache or nausea •No glare oRead anywhere, anytime, in any position: indoor or outdoor.
  10. 10. •6 size fonts oMade for any eye sight •Simple to use oMade for all ages •No contracts oNo obligations, no pressure to capitalize on your contract Weaknesses: •Price- Kindle $299 oKindle DX $489 Large income to make initial purchase •Don’ t want to ruin it so would not want to take it everywhere oExpensive and don’ t want to risk damages- don’ t want to risk it at the park, the beach, at the kitchen table, at the pool, or near food, due to food, sand, dirt, and other risks •Battery life will wear down in time oWith each use you take away from its battery life and eventually will need to leave plugged in at all times or need to replace the battery •Cannot lend books to friends
  11. 11. oThey have to pay for books. •Have to have your kindle book working and charged to get to all your books oWith a dead battery your no longer able to access your library •Your entire library is lost if you lose or beak this one electronic oIf you break your kindle book you need to rebuild your entire library from scratch •No colors oNot kid friendly, can come off as boring. Opportunities: •Top of mind recognition in Ebook reader market •Blogs, RSS feeds - live content •Kindle to publishing/ newspaper industry as iPod is to music industry •Continue to sign companies and organizations in addition to New York Times, Washington Post, Boston Globe oNewspapers, Magazines oTo offer Kindle DX at a reduced price in exchange for long-term subscription commitments Cell-phone model oExpands distribution outside of delivery areas
  12. 12. •Cuts cost of materials -trees, ink, delivery, waste (‘ green’ books) •Global expansion oMany partners and vendors oLong-term contracts with wireless providers oMulti-cultural marketing •Linux operating system oOpen source for developers oAmazon released Kindle source code okindle apps, plugins, upgrades, automation, web browser •Text to speech – reads books to you oEvery title is an ebook and audio book oAudio books are a big business in itself oAmazon offers DRM-free mp3’ s •The More Kindle devices that become available, the cheaper prices will be •Having already released 3 different Kindle devices, ranging from $149-$489 in price, it seems they will shift focus to opening the kindle to third party developers. Creating an SDK (service developers kit) where anyone could make and sell applications would not only increase the Kindle’ s possibilities, but also give it a sort of iPhone recognition for innovation (need to release and market before competitors like iPhone). More Kindle in more places. oThis will take the Kindle and digital reading to the next level with unrestricted potential – see apps and add-ons from:
  13. 13. oFacebook, twitter, Apple iPhone and iTouch, etc. oApps, games, plugins, expansion, •The Kindle reader is essentially a format transition (hard copy to digital copy) oThis can be marketed in a similar fashion to the DigitalTV transition o‘ this is where the industry is going, let the Kindle take you there’ •Authors can upload documents in multiple formats through Amazon’ s Whispernet oThis essentially turns the Kindle into a publishing company (similar to app store for apple, facebook, twitter, etc.) oCan charge between $.99 and $200 per download (authors receive 35%) oThird-party companies can offer services for digital distribution and marketing “ Digital Distribution Agent” Social media marketing geared specifically toward digital book authors Distribution for full books, blogs, book annotation compilations, comics, •Not releasing the SDK (Service Developer Kit) until taking advantage of all options: oTwitter progress updates – and facebook news feed, etc social sites (automatic -allow users to change settings like facebook news feed) 3Gnetwork Chapters, new books added, personal summaries, annotations, etc. oUser profiles: Social Networking Community (through 3Gnetwork)
  14. 14. Reading lists in profile, book history Search/filter/browse by what users are currently reading and will read soon (recently downloaded) – arrange reading order Search for reading buddies (team-up option) More than one buddy (Start Book Club) •Message board, avatar, chat messaging, invite users, post/share links, •Book club point systems and reading rankings, etc. oCalendar with reading tracking and alarm features: Set exactly how much you want to read oSimple folder organization (this can be java-based or within the SDK) Book categories, reviews, annotations, summaries •Universities and Schools oText-book subscription service oProfessors can monitor reading, annotations, summaries (3Gnetwork) Calendar tracking feature oUpload study guides, supplemental material thru pdf conversion •Java programming: oFlash card, vocabulary game modules o3G download, usb-connectivity, pre-load onto SD expansion card (Kindle-1) •Team up with social reading sites:
  15. 15. oShelfari, GoodReads, BookCrossing, Revish •Treating kindle reader and ebooks as two separate businesses oiphone reader app expands user base •Global expansion - many mobile carriers in other countries Threats: •Price - Can buy a laptop, pda, netbook, tablet pc, etc. for comparable price (more features) •There are many websites and sharing networks to illegally download ebooks (Kindle offers pdf conversion) •Can't resell/trade/pass along books •Consumer electronics trend toward device convergence (kindle is only an ebook reader) •Source code released oKindle clones and knock-offs to be developed by competitors •Competitors will target kindle specifically because it is the front runner and has top name recognition
  16. 16. •Cuts printing/ production/ delivery jobs • sells other ebook readers, including Sony reader •Releasing the Service Developers Pack too soon, other programmers make money off features that Amazon missed taking advantage of first •Weak annotation features (highlighting, margin notes, etc.) and lack of true page numbers Competition Current •Ebook Readers: oNo wireless connectivity oLess storage space o o o •Other Devices oIpods: Cons – irritating to eyes, no e-ink display, wifi (slower download speeds than 3G Kindle) unless using iPhone oPDAs: Cons – irritating to eyes, no e-ink display oNetbooks Cons – large size, no e-ink display oLaptops Cons – large size, no e-ink display, no 3G In Development •Microsoft Courier Tablet o video.html?intcmp=Microsoft-Tablet-hmpgflash
  17. 17. •Apple Tablet o september.html