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  • Topic: Amazon Kindle, E-book, Electronic paper
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  • Published : December 20, 2012
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Amazon Kindle
Andrew Ascoli Dan Cullina Lea Kunesh Chun-Che Peng Shengbo Xu June 4, 2008

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Contents
1 Introduction 2 Six Forces Analysis of the E-book Industry 2.1 2.2 2.3 2.4 2.5 2.6 Entry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rivalry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Supplier Bargaining Power . . . . . . . . . . . . . . . . . . . . . . . . . . Buyer Bargaining Power . . . . . . . . . . . . . . . . . . . . . . . . . . . Substitutes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Complements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 3 3 3 4 5 5 6 6 6 7 8 8 8 8 9 10 11

3 SWOT Analysis 3.1 3.2 3.3 3.4 Strengths . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Weaknesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Opportunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Threats . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4 Strategy 4.1 4.2 4.3 Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Long Term Positioning . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5 Conclusion

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1

Introduction

While the concept of e-books dates back to at least the 1970’s, the industry has only begun to develop since the late 1990’s and is still in its infant years.[1] As of today, there are only a handful of e-book readers available for consumers. Early entrants include Sony, Jinke Electronics, iRex, and numerous other smaller companies, but none of the companies have yet to establish a solid reputation. In November 2007, Amazon.com entered the e-book reader market with the Kindle. Amazon originally priced the Kindle at $399 and it sold out within hours of its release. The device remained out-of-stock until April 21, 2008. It reads the proprietary Kindle (AZW) format and like its closest competitors, Kindle uses an electronic paper display which consumes little energy and gives the user the illusion of reading off physical paper. The Kindle can act as a stand-alone device by downloading content over the Sprint EVDO network. This content delivery service is called Whispernet. According to Jeff Bezos, the founder and CEO of Amazon.com, designers of the Kindle envisioned a device that would “get out of the way”, a device by which readers would become engrossed in the words and forget the medium on which they are reading. Battery life, eye strain, device portability, and user interface were all tailored to deliver the best reading experience possible.

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2.1

Six Forces Analysis of the E-book Industry
Entry

Entry barriers to the e-book industry are few, if any. The manufacturing process is relatively simple; except for the screen, the technology is well developed. The Kindle uses an electronic paper display manufactured by E-Ink Corporation and this same display can be found in the Sony Reader, the iLiad, the Cybook Gen3, and the Readius. However, there is a challenge of signing agreements with publishers so that the material can be released as an e-book. Perhaps the biggest obstacle that all the companies are facing right now is the lack of growth in the industry. Jinke has been in the business since 2000 but has sold only 150,000 readers, the most of all the companies.

2.2

Rivalry

The e-book market is still in an early stage and because of this, market price levels are still uncertain. There are significant variations in price between different producers of e-book readers. Amazon entered the market at a significantly higher price than Sony and many 3

other competitors, but there are also other readers selling at $700 or more. Because the consumer base is so small, all producers would rather see it expand than steal customers from other manufacturers. Consequently,...
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