Harry lindsol textbook case free essay sample

1. Describe the competing business models of traditional textbooks and etextbooks. How do the customer value propositions of the two textbook formats compare? How are the profit formulas of paper textbooks and etextbooks different? The business model of a traditional textbook noticed that they needed growth to keep up in the competing market so traditional textbook companies began to innovate from just a traditional textbook to now having add on to the books such as platforms. Textbook companies were faced with not only other traditional textbook companies but also etextbook companies, rentals, and students selling there books. The organizations have to continue to make sure that customer value propositions are met or they will begin to lose revenue. The business model of an etextbook begins with the demand for technology. Publishers began to realize that many college students are moving towards more electronic sources for convenience. Many publishers are now trying to get professors to move with the new trend of etextbooks. Especially since it save them much more money to produce the product. The customer value proposition of the traditional textbook format are that traditional textbooks are valued more amongst students. Many students valued that with a traditional textbook they have ability to highlight and take notes in the margins of the book. Students also like that idea that they could sell their books back to the bookstore at the end of the semester and or purchase other used textbooks for a much cheaper price. Students also valued that they did not need the Internet and a computer to access their textbooks and also that these textbooks where available in their library. The customer value proposition of an etextbook format are also greatly valued amongst customers. Many customers valued that the price for an etextbook was less expensive. Customers value the convenience of being able to have their textbook or books on there everyday electronic devices. Customer of etextbooks no longer had to drive to a bookstore and search through shelves to find a book that wasn’t available, or cost too much, or was not really appealing. The profit formulas of paper textbooks and etextbooks are very different. The profit formula of a paper textbook is that publishers sell there traditional textbooks to students at a high cost than the actual cost price, So therefor a profit is made, publishers market there textbooks to professors so that the students will buy the book for the class. With an etextbook publishers set there own fix cost for their book. Etextbooks make there profit by making it that each students has to purchase there own etextbook. Although publishers don’t make as much with etextbook they make their profit by updating the etextbooks very often so that students will have to buy the updated version with the most current events. The etextbooks are sold at a lower cost than a traditional textbook because of the resources that do not have to be used. 2. How do textbook platforms that include online tutorials affect the customer value proposition of textbooks? Does the addition of such online materials affect the profit formula for a textbook? Explain. The textbook platforms that include online tutorials affect the customer value proposition of textbooks because customers are willing to pay for the extra for additional material to help them understand the subject. The value of the textbook will increase, this will give the customer a feeling that the have received there money worth from the platforms. The addition of the online material does affect the profit formula of a textbook because it would increase revenue because the customer will soon demand this additional material for help. 3. What is competition like in the textbook industry? Which of the five competitive forces seems strongest? Which of the five forces is weakest? The competition in a textbook industry is very competitive from every aspect. According to Porters five forces model of competition, the five competitive forces are threats of new entrants, Rivalry against existing firms, Determinates of supply power, Determinates of buyer power, Threats of substitute products. There is competition amongst Mcgraw-hill and Pearson and other big companies to make a profit and stay in business, there is competition with new entrants in both textbook and etextbook companies, There is also a competition of innovation and which company will meet its target audience’s demand. Also competition of substitute products such as rent textbooks, used textbook and etextbook that almost over shadowed the traditional textbook companies business. Of the five forces of competition I believe that the competitive pressures associated among rival sellers in the industry is the strongest. I do not believe that of the five forces there is a weak one. 4. What factors are driving change in the textbook industry? What is your assessment of the impact of these driving forces of change? The factors that are driving change the textbook industry are the amount of technology that is used amongst students today such as ipads, kindles and laptops and the demand for online textbooks for convenience. Another driving change in the addition to textbook industry is the platform such as the McGraw-Hill Connect and the Learn Smart. My assessment of the impact of these driving forces of change is that the textbook company should innovate and move towards more electronic textbooks because as technology becomes more prevalent many people will begin to demand for the ebooks witch will drive the traditional textbook companies out of business. 5. What are the key factors of success in the textbook industry? List and discuss the resources and competitive capabilities are required to achieve success in the industry? The key factors of success in the textbook industry are to maximize your profit. Many textbook companies find their selves not making there profit because many students are able to buy a book full price and sell it back to the book store and the money is not generating back to the actual company. Textbook companies have to be wiling to innovate and follow the trends. Companies such as McGraw-Hill and Pearson have added platforms to their books and added etextbooks to stay current with the technology trend. Another key factor is to take the textbook company international so that your textbook company is not just here in the states but all over the world. Also a key factor is the cost of the books itself, many college students and international students are not able to afford these book so you should be aware of the price and if students do purchase an expensive book they like to feel that it was worth the purchase. 6. What competitive advantage or disadvantage might an eBooks only textbook publisher have relative to McGraw-Hill, Pearson, and other large international publishers? The competitive disadvantage is that an etextbook only textbook publisher have relative to McGraw-Hill, Pearson and other large international publishers is that the publishers will not make as much of a profit as the publishers that do both traditional textbooks and etextbooks. The publisher of an etextbook only generate no more than 70 percent of there selling price and then has to take the earnings and distribute it amongst different departments such as editing, layout and marketing. Therefore of the earnings the publishers make they only receive 25 % of that 70 % earning. Publishers realized that the actual profits they were making where less than a hardcopy version of the book. 7. What are your recommendations to Professor Lindsol concerning his interest in launching a new venture specializing in etextbooks? My Recommendations to Professor Lindsol about his interest in launching a new venture specializing in etextbooks is that he should first focus on the target market of college students. Although, The demand for etextbooks of college students is not at an all time high. I believe that it will soon be because many of the textbook companies are beginning to move towards electronic book which has raised there revenue and cut down cost of the resources needed for a traditional textbook. Also technology is very big amongst college students so it would be a matter for time before many professors will recommend the etextbooks for there class. I also recommend that lindsol watch out for big competitors such as companies like McGraw-hill and Pearson who have already entered the market of electronic textbooks and are textbook only companies. It will be great to enter the market now since you have seen there marketing strategy on what to do and no to do in the extextbook business.