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  1. 1. The soon-to-be death of paperback books hasgenerated a wonderful-mess for the book publishing industry and created a clear Blue Ocean ocean strategy
  2. 2. Well – the Blue Ocean opportunity is clearly there, but who andwhat is not And book publishing industry executives are far from happyat the moment Blue Ocean opportunity refers to Blue Ocean Strategy,the proven system for making the competition irrelevant by creating newmarket spaces through simultaneous achievement of differentiation andlow cost Instead of being locked in red oceans of fierce bloodycompetition, Blue Ocean Strategy moves to clear, uncontested waters ofhighly profitable growth The book publishing industry, now more thanever, faces its toughest competition to date The book publishing industryhas survived books on tape and books on phones
  3. 3. However, Amazon com's Kindle, which offers the innovativealternative to paperback books through its 3G Wireless capability todownload electronic books in less than 60 seconds, can hold up to 1,500books not to mention its large selection of over 450,000 books blueocean strategy Moreover, the recent release of Apple's iPad - TheiPad's easy-to-use interface allows consumers to play games,navigate the internet and download electronic books
  4. 4. The ameliorating electronic movement through technological innovationhas created a crowded red ocean of competition for the book publishingindustry Amazon and Apple continue to take huge bites of profit out ofthe book publishing industry requiring an inevitable Blue Ocean Strategy,value-innovation driven, change "Traditional trade book publishers arescared," says Harvard Business school professor (and former CEO ofRandom House) Peter Olson "The world that they have known, of printbooks and brick-and-mortar bookstores – the whole physicaldistribution system – is on the cusp of changing fundamentally "Recently, Macmillan, privately-held international publishing company,battled with leading online retailer Amazon over e-pricing as the biggestsource of friction Amazon briefly removed the publisher's Kindleeditions and print book from its site after Macmillan indicated it wouldbegin setting higher consumer prices for e-books than Amazon's
  5. 5. standard charge
  6. 6. Amazon eventually renegotiated terms with Macmillan, but theconfrontation reflects publishers' concern that more and morecustomers are going to get used to cheap electronic pricing that willundercut print books Publishers believe that consumers' perceptionof things that are digital should be less expensive or free The ongoingpower struggle between publishers and key online retailers like Amazonremains an open question Odd enough, the focus of publishers andretailers is primarily on the amount of resources dedicated to themanufacturing and physical distribution of books Blue Ocean Strategyfocuses on customers and non customers as a source for valueinnovation to make the competition irrelevant The current industryconcerns are confrontation versus cooperation with retailers and e-pricingand royalty rates
  7. 7. But, consider the solution from a different approach – a BlueOcean Strategy approach The major publishing companies and onlineretailers are competing and worrying about the strategies for competingFor example, publishing companies are pricing their books based not onwhat is costs or what people want to pay for it, but based on anotherformat that is completely different, just because they want to keep the oldformat alive Macmillan was able to win the shot-term pricing battle withAmazon, but couldn't Amazon just retaliate by promoting otherpublishers' titles more? The electronic movement has resulted inthe inevitable – disruption happens But, what company in thebook publishing industry is going to create a Blue Ocean of highlyprofitable growth and how will they do it? Can the book publishing makethe market more attractive with additional electronic features, packages,etc? With the central focus of the publishers' and retailers'debate on price and the adoption of the e-reader it will require theapplication of the fundamental aspects of Blue Ocean Strategy –differentiation and low cost to survive
  8. 8. blue ocean strategy