Book Publishing in 2010 Essay

1658 Words Mar 10th, 2014 7 Pages
Summary

This paper is about Book publishing industry in the USA. Main analysis are done using Porter’s five forces analysis. First analysis is on industry before e-books while indentifying main levels of threats for industry from existing rivalry, new entrants, bargaining power of buyers, bargaining power of suppliers and substitutions. Also, same research is being conducted for industry after e-books emerged. Next part is looking to the future of industry and identifying main opportunities and threats looking forward. Finally paper is concluded with suggestions for suppliers how to sustain their business.

Introduction

Book publishing business recently has been going through lots of changes. New technologies opened doors for new
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High number of competitors (over 87 000) implies that entry barriers ware low. However since it’s was very fragmented industry each segment had different threat level of new entrants with K-12 and college being the most difficult for new entrants to get in. It required significant upfront investment and strong negotiation power for publisher. Also, big publishing houses had higher barging power and get to publish the most popular authors with the biggest batches of orders. To challenge these few big publishers was very difficult therefore for them entrants threat was relatively low. The most vulnerable were small, niche publishers. To start this small publishing business you did not need big upfront investment and for new rivals it was easy to enter to the market.
Rivalry among Existing Competitors - High
Market consisted of many publishers with no one being as distinguished leader, which means it was strategic rivalry. As a result fight for market share was fierce. Moreover, books were pretty similar among top competitors, and customers switching costs were very low. Customers chose the books according the book title or author, but not because particular publishers, so publishers couldn’t build loyal consumers base.
Threat of substitute products or services - High
It was big threat for substitutes, according to the data, average American spent around 7 minutes per day reading books versus 2 hours of watching TV. Moreover, there were many
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