Xerox Casestudy

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Xerox Casestudy

  1. 1. XEROX: BOOK-IN-TIME MBAM 619: Strategy February 6, 2008 Sarah Gay, Gaurav Gupta, Samir Mohan, Sandro Olivieri
  2. 2. PEST: P & E Political: Federal government appeared likely to increase funding for libraries and the arts. Economic: US economy was beginning to recover during the mid 1990’s
  3. 3. PEST: S & T Social: Higher enrollment levels in schools and colleges. Concerns about the aging U.S. population. Technology: Rapid changes in office technology. The printing process is becoming more automated and computer controlled.
  4. 4. PEST ANALYSIS Potential Impact Opportunity or Strategic Nature of Change of Change Threat Response Opportunity: Federal government appeared Libraries will be Increased need to Explore discounts for Political likely to increase funding for looking to increase their publish new and old federal institutions. libraries and the arts. book reserves manuscripts. Increased consumer Economy is recovering from Opportunity: Increase Economic and government the recession of the 1980’s in retail spending. spending. -Higher enrollment levels in Increase in medical and Opportunity: Increase Make it possible to universities. Social health-care related titles in demand for print short runs of - Concerns about the aging and textbooks. specialty titles. specialty titles. population Threat from IBM and Partner with retailers Increased electronic Technology Increased technology other companies to do and market the lower publishing. small run printing. cost BIT printers.
  5. 5. PUBLISHING INDUSTRY VALUE CHAIN Papers, printing presses, ink, manuscripts Publishers Wholesalers Retailers Customers
  6. 6. PUBLISHING INDUSTRY CHANGES Publishing industry is moving from a literary focus to a profit focus. The printing process is becoming more automated and computer controlled. The book market is growing at 5% a year.
  7. 7. PUBLISHING INDUSTRY VALUE CHAIN 5% Profit Value Added 2% Profit Value Added 5% Profit Publishers COGS •20% manufacturing costs Value •20% covered royalties, rights, etc. •30% covered sales and marketing Added •25% covered book return costs Publishers Wholesalers Retailers Customers
  8. 8. VALUE CHAIN: VERSION 1 Major Expenses for Publishers •$3.08 = manufacturing costs •$3.08 = author royalties, rights, etc. 5% $25.00 $1.25 •$4.62 = sales and marketing •$3.85 = book return costs $6.00 2% $0.35 $2.00 5% $0.77 $14.63 Publishers Wholesalers Retailers Customers $25 BOOK W/ WHOLESALER
  9. 9. VALUE CHAIN: VERSION 2 Major Expenses for Publishers •$3.32 = manufacturing costs •$3.32 = author royalties, rights, etc. •$4.98 = sales and marketing $25.00 •$4.15 = book return costs 5% $1.25 $7.15 5% $0.83 $15.77 Publishers Retailers Customers $25 BOOK WITH NO WHOLESALER
  10. 10. BOOK-IN-TIME PRINTING Target Audience for BIT printing: Anyone looking to print less than 1200 copies of a “book” (book may include training manual, instruction book, out of print manuscript, etc.) Pitch: Earn profit on books that were previously too expensive to bring to market on a per unit basis. Sell products that are out of print at a cost of $6.90 a unit. Over 1,000,000 titles go out of print every year in the United States. Worldwide, over 20,000,000 titles a year go out of print because of low demand. No need for shelf space - print as you need it.
  11. 11. XEROX B-I-T POTENTIAL BUYERS The
new
Book‐On‐Demand
market
will
s5ll
need
an
 intermediary
to
handle
the
digital
manuscripts
and
shop
them
 to
the
owners
of
the
Book‐In‐Time
prin5ng
equipment.
The
 intermediary
could
be: The
publishers
themselves Poten5ally,
a
rise
of
independent
authors
shopping
their
 manuscripts
directly
to
Amazon.com
through
an
iTunes
model
of
 independent
distribu5on
  12. 12. THE NEXT STEP: PRINTING • FedexKinko’s and other office supply stores • Upon purchase of content through Amazon or another e-tailer, option to print at local office shop • Boutique printing houses • Small run zines, programs, pamphlets • Major retailers – Barnes & Noble, Borders… • BIT installations at the distribution centers could still ensure a 24 to 48- hour turnaround. • Major and Mid-Sized corporations • Printing of training materials, advertisements, and other materials office
  13. 13. VALUE CHAIN: AMAZON Major Expenses for Publishers •$3.08 = manufacturing costs •$3.08 = covered royalties, rights, etc. 5% $20.00 •$4.62 = covered sales and marketing $1.00 •$0.31 = covered book return costs $2.00 (now only 2%) 2% $0.34 $2.00 5% $0.73 $13.93 Publishers Wholesalers Amazon Customers

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