The book publishing industry prior to the E-book revolution through Porter’s five force theory model

Case: ‘BookPublishing in 2010’Preview the documentView in a new window by Bradley and Bartlett presents a comprehensive picture of book publishing before and after the onset of the e-book revolution. Read the case carefully and answer the following questions:

Analyze the book publishing industry prior to the e-book revolution using Porter’s five-force model.

Using Porter’s five-force model analyze how has the advent of e-books changed industry structure and competitive dynamics.

What are the long-term threats and opportunities facing the book publishing industry.

Provide strategic recommendations to help book publishers adapt their business model for the future.

According to porter’s five force theory, the manufacturing process in the book publishing industry is compatible difficult and it includes many significant factors. Moreover, the book publishing industry is divided into different categories such as educational books, professional books, children’s books, coffee table books and religious books. Like many industry the book publishing industry is undergoing tremendous changing through adopting new technologies. Many years ago the book publishing industry depended on old technologies and circumstances. In terms of supplier power the book publishing industry gets huge advantages rather than E-book revolution (Ballew, 2012). The suppliers of book publishing industry are very comprehensive and helpful; they understand the requirements of book publishing industry. Another factor is buyer power, there are different types of library contains thousand books (Grant, 2012).. So, it is clear that book publishing industry always carry lots of demand. Moreover, thousands of students are daily purchasing books. On the other hand, the book publishing industry does not have any competitor before arising the E-book revolution. Third force of porter is threats of substitution; in this case there was no other option available for books because it is a unique product. For an example, a man wants an economic book, so he has to purchase a book no matter who is the publisher. However, the threats of new entry are one of the major factors of Porter’s five force theory (Hart-Davis, 2012). The book publishing industry has no competitors but after introducing the E-book, many people started to love this advanced technology and forget the traditional book publishing industry. So, with the help of Porter’s five force model the external factors of book publishing industry was discussed. Now we explain the significance the book publishing industry on the E-book.              

E-book needs approval from the publisher before converting their books but in some cases, E-book has to pay monopoly to publishers in order to create a different book. In this assignment, book publisher roots a pressure on the bargaining power of suppliers because they have an authority to determine which book should be accessible on the Kindle (Muir, 2013). Furthermore, book publishers can also restrict the E-book to convert their books in order to avoid any kind of illegal copying.

Moreover, book publishers involve the most valuable suppliers such as authors and writers with high bargaining power. They have original raw materials of any documents before publish. On the other hand, the whole sellers and retailers of books are playing a significant role in this section. Book publishers have a great trade discount including wholesales and retails margins, for an example, the high 55% of the selling prices of books reflect in the market. However, in order to achieve success, many smaller book publishers had to work under the shadow of big names in order to expand their business (Burns and Sauers, 2014).   

The advent of e-books changed industry structure and competitive dynamics

Many types of research proved that e-books revolution enhanced a huge change in industry structure. The five force theories model of Porter is generally used for industry analysis and business strategy development. In addition, this model is used to make interaction with five forces in order to explain the completive strength and profitability of the current market. According to the five force theory model some effective elements of e-book have been identified such as threats of entrants and substitutes, bargaining power of suppliers, bargaining power of buyers and rivalry with other firms (Xiaomei, 2011).

On the other hand, competitive advantages of a firm are determined by various factors such as internal capabilities of the firms and changing external environment. With the help of e-books, customers get the free deduction and wider access (Meng, 2012).. With the help of advanced technology adopting Amazon Kindle expand their business in a wide range. Moreover, differentiation and innovation are the effective key factors which are applied by Amazon in order to develop their business. Talking about the competitive dynamic, it depends on some significant elements of the e-book. For an example, Amazon has enough rivals in this competitive market such as Barnes and Nobles. In order to dominate their competitors Google books sales books by giving high discounts 30% on the books that have cost more than $20 (Wu, 2013).

The term publishing of a book is a broadcast process of informing about the book to the public. In the past days, issues regarding the printing of the book include the process from delivery of completed manuscript to distribution and printing such as staffing, paper, print runs, author advances, acquiring rights, royalty payments, distribution, publishing catalogs, etc. But with the revolution of online book reading and buying facilities became a threat to the handmade book publishing industries (Reiter, 2011). In the United States of America, the most highly fragmented industry is the book publishing industry with over 87,000 book publishers.  The arrival of the new digital book industry took the marketplace. They offer online purchasing with cash on delivery facilities as well as card payment facilities. For example, Amazon kindle offer their customer to read books online and also purchase them (Grades of recommendation, 2010).

Opportunities: The United Kingdom book publishing industry has the opportunity to become the leading market retailer. Its Digital Rights Management Policy can lead them to increase its profits by the distribution of consistent reading content. For example, the normal publishers can satisfy their customers with quality product retailing at an affordable price and if it can continue for a long term period, their future market will hold a leading position internationally. Like Amazon, if they create an official page and started to sell online eBook products, they can also make a development in the growth of their market globally. The other opportunity includes advertising on newspaper normally on weekends. In weekends, people normally get time to read papers and those who love to read newspapers, they will also read books (Brown, 2012).

Long term threats and opportunities of the book publishing industry

Threats: As stated earlier, online eBook publishers are taking control over the normal book publishing companies (Jennex, 2014). Despite the explosion of the published books, the sales of the book industry are declining. Today, the increased number of self-publishing authors creates a threat to the normal book publishers as they publish their writings with their own investment. Other vital threats are those connected with the supply chain. Taking an example, the suppliers could raise their cost of transport, prices or terms and condition which may harm the business. The suppliers take advantage of the business. The customer behavior is another factor that can impact on the business. If the customer turns out to be the staff of a rival company, then he/she can do anything to overtake their business.

In the field of the strong competitive market, eBook industry is already present and advertisement contributes a lot to their promotion and increase in market price. But normal book publishers need a strategic planning to compete against the rivals and get a better place in their competitive market (Jennex, 2014). The publisher must take on the modern method regarding promotion and advertisement like weekly magazines, radios, TV as well as the regular advertisement in daily newspapers. Apart from all these strategies, they should expand the networks with various universities, schools and colleges. This can lead to the increase in brand value. The book publishers who cause a great impact by converting books to e-readers generally receive the greater percentage of profit (Dileo, 2015). This means the third party who helps the promotion of the book publishers receives a small percentage of profits. The market strategies of a publisher include the following factors:

Selecting the best writer:

The review of the customer is very vital for the business. Therefore, the best writer should be selected; this means that the writing should meet all the required topics of the present real life circumstances such as love and politics, business entrepreneur etc. These factors attract customers (Martynova, 2011). Other than real life factors, some appealing characters like Harry Potter, Sherlock Holmes, Mike Hammer etc., must be included (Ue and Cranfield, 2014). These characters attract children and youngsters. In this way, the bestselling authors increase their audience over time.

Product quality

In order to attract more customers, book publishing industry should publish books with attractive cover, high quality and long lasting paper. Moreover, the internal context needs to be interesting for reading (Tham, 2013).

Affordable prices:

The price of the books should be kept at such a value by which customers can afford.  There are many customers who love to read books but could not buy due to high price. This will lead to the increase of customers in retailing bookstores.

Advertising through social networks:

Social networks like Facebook, twitter and Instagram provides an alternative platform for the promotion and advertisement of a publishing company. The main strategy behind social network promotion is the way of communication (Linsenman and Kingaard, 2011). It changes from one-way to two-way. People can make comments and acquire information at some time which can increase the market of publishers. 

References

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