By Hongchul Jun, Yokesh Kumar, Samantha Tang, Kenny Toop, & Ali Yazdi
PEST Analysis <ul><li>Technology- Emergence of internet and e-retailers revolutionized book publishing </li></ul><ul><li>Amount of authors increased because of ability to publish books </li></ul>
Top Ten Publishers The top ten publishers in the industry account for only 25% of the market share in this highly competitive industry HHI Index- 59.25 (Few barriers to entry)
US Book Industry Analysis Authors End Customer Size: Profit : 0~% of publisher’s profit. Or 10~15% of retail selling price Publishers Size: $23.1B (40,000) Profit margin:8% to 15% Printers Size: $20B (40,000) (Printer:$10B Other raw materials: $1~5M) Retailer Size: $4B (*1) Net margin: 3~5% Wholesaler Size: $7B (*2) Net margin: 1~2%
Value Chain for a $25 Book Authors Printers Publishers Wholesalers Retailers End-Customers $25 $17.5 $12.5 $4.5 $2.5
Who can leverage the Xerox: Book In Time technology? <ul><li>Small publishers can leverage the technology by taking chances on new books </li></ul><ul><li>Universities and schools can create coursework that is relevant based on current events due to quick turnaround time </li></ul><ul><li>Small companies can create their own documents which provides them security if the documents are confidential </li></ul>
Estimate Demand of Book in Time <ul><li>U.S. Book Market- 2.4 billion books sold </li></ul><ul><li>68% in Paperback format and 69% Non-fiction </li></ul><ul><li>Xerox could penetrate a smaller portion of trade market and a majority of textbook market segments </li></ul><ul><li>Some of the books were out of print due to low demand worldwide </li></ul><ul><li>If Xerox could capture the mid market publishers, the demand could be in thousands of printers which would translate into billions in sales </li></ul>
Where does Amazon fit? <ul><li>Amazon provides a resource for small publishers to distribute books to a large audience via the e-retailer </li></ul><ul><li>Amazon was the first company to let customers review books and it created an online community where people could research books </li></ul><ul><li>The biggest cost saving: shipping costs and excessive print costs. Because the publisher can release prints in limited quantity for titles where the demand might be unexpected </li></ul><ul><li>Other cost saving drivers : </li></ul><ul><li>Inventory fees-virtual shelf replace physical retail space </li></ul><ul><li>Marketing fees of best display at retailers </li></ul><ul><li>Customer needs analysis: reflect true customer demands </li></ul>
Where does Amazon Fit? Authors Printers Publishers Wholesalers Amazon.com End-Customers $25 $17.5 $12.5 $4.5 $2.5 Normal price $18 Amazon Price
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