By Hongchul Jun, Yokesh Kumar, Samantha

Tang, Kenny Toop, & Ali Yazdi

PEST AnalysisTechnology- Emergence of internet and e-retailers

revolutionized book publishingAmount of authors increased because of ability to publish

books

Top Ten Publishers

The top ten publishers in the industry account for only 25% of the market share in this highly competitive industry

HHI Index- 59.25 (Few barriers to entry)

US Book Industry Analysis

Authors

Publishers

Size: $23.1B (40,000)Profit margin:8% to 15%

PrintersSize: $20B (40,000)(Printer:$10BOther raw materials: $1~5M)

End Customer

RetailerSize: $4B (*1)Net margin: 3~5%

Wholesaler

Size: $7B (*2)Net margin: 1~2%

Size: Profit : 0~% of publisher’s profit. Or 10~15% of retail selling price

Value Chain for a $25 Book

Authors Printers Publishers Wholesalers Retailers End-Customers

$25

$17.5

$12.5

$4.5

$2.5

Who can leverage the Xerox: Book In Time technology?Small publishers can leverage the technology

by taking chances on new booksUniversities and schools can create

coursework that is relevant based on current events due to quick turnaround time

Small companies can create their own documents which provides them security if the documents are confidential

Estimate Demand of Book in TimeU.S. Book Market- 2.4 billion books sold68% in Paperback format and 69% Non-

fictionXerox could penetrate a smaller portion of

trade market and a majority of textbook market segments

Some of the books were out of print due to low demand worldwide

If Xerox could capture the mid market publishers, the demand could be in thousands of printers which would translate into billions in sales

Where does Amazon fit?Amazon provides a resource for small publishers

to distribute books to a large audience via the e-retailer

Amazon was the first company to let customers review books and it created an online community where people could research books

The biggest cost saving: shipping costs and excessive print costs. Because the publisher can release prints in limited quantity for titles where the demand might be unexpected

Other cost saving drivers : Inventory fees-virtual shelf replace physical retail space Marketing fees of best display at retailers Customer needs analysis: reflect true customer demands

Where does Amazon Fit?

Authors Printers Publishers Wholesalers Amazon.com End-Customers

$25

$17.5

$12.5

$4.5

$2.5

Normal price

$18Amazon Price