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Maintaining Competitive Advantage in the E-Reader Industry

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Maintaining Competitive Advantage in the E-Reader Industry

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  • March 18, 2011
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Maintaining Competitive Advantage in the
E-reader Industry

Amazon’s competitive advantage in the e-reader industry due to their top selling ‘Kindle’ electronic reading device, still in its infancy, will be difficult for any rival in the industry to achieve. While electronics design and manfacturing are not Amazon’s core competency by any means, Amazon’s Kindle e-Reading device has beat out its biggest rival, electronics heavy-weight Sony, by an estimated 30% higher device sales in 2008. What’s more is that the Sony Reader has been available since 2006, while the Amazon Kindle (only available from amazon.com) just launched in late 2007 and was hugely popular from the start, selling out in the first 5 and ½ hours. Why does Amazon have the competitive advantage in the e-reader industry while Sony, whose e-reader design is sleeker, and hardware and firmware are superior, falls short of attracting the largest market share? Several reasons for Amazon’s top standing in the industry come to light when we apply the strategic models and analysis tools to the e-Reader industry, and Amazon’s Kindle. If we look further into the history of e-books and the emergence of the dedicated e-reader devices that support e-books, several interesting point emerge. First of all, e-reader devices initially appeared almost twenty years ago, in the early 1990’s (Sony’s “Bookman” was released in 1992). Even more suprisingly, the E-ink technology that e-book readers like the Sony Reader and the Kindle use, which tries to provide a more ink-on-paper-like experience, was first conceptualized in the 1970’s, and marketed in 1992. So why is it that we haven’t really heard about these devices until last year? It took the combination of a culture shift in our society, and the perfectly positioned company to begin to make e-books and e-reading devices popular and Amazon was just the company to recognize and take advantage of this unique strategic opportunity.

Amazon’s vision and core...