...When first reading this case we thought that Amazon is using Clayton Christensen’s law of conservation of attractive profits which says that when one thing becomes modular and commoditized, another thing becomes valuable. We thought that, as shown by exhibit 4, Amazon is selling the excellent Kindle at a bargain or maybe even at a loss (Kindle is better on most specifications than its direct e-ink competitors and is less expensive) in order to make huge profits on eBooks sales. A common strategy in the industry: Google gives its mobile OS Android for free because the more people will use smartphones the more money Google can make on online advertisement – its core business. But after a closer look we noticed that Amazon isn’t even making money on eBooks sales because as we can see in the document, eBooks on the kindle store (Via Kindle readers, PC, Mobile phones etc.) can be sold with a (significant) loss for Amazon. And this is, in our opinion how Amazon changed the book industry, it has dramatically lowered the cost for customers to acquire an e-reader (a basic kindle reader costs no more than 49$ today) and didn’t stop at that, it made the purchase of e-books even more affordable by subsidizing the later. A strategy that no competitor can follow, because very few can afford to lose money on every sale they make. In addition, Amazon is making it very easy and very profitable for writers to self-publish on the kindle web store. This is a real game changer. Because not only writers...
Words: 576 - Pages: 3
...Kindle DX Marketing Strategy Analysis Launching any product requires a lot of planning and forethought. Without a proper plan, it becomes difficult to design the most appropriate marketing strategy than can lead the way towards success. The 4 P’s We must analyze the 4 P’s i.e. the product, price, place and promotion. In the case of Kindle DX launch, the type of product is relatively new in the market. For this unique kind of product, which seems to be an advanced version of book, it might take time before the target market can realize the importance of the product to them. To cross this stage, promotion of the product is necessary. The product is an enhancement over its predecessors in terms of its screen size which changes it target market more towards college students, who can interpret this device as ebook reader. Promotion The company is using the below the line marketing strategy. One aspect of this strategy is the word-of-mouth method, which involves the promotion undertaken by the buyers of product themselves. The company firmly believes that this method can bring more success than other methods. However, relying to the large extent on just one method exposes the company to risks of negative publicity because unsatisfied buyers can spread negative information about the product. The company virtually has no control over this method of marketing unless they supplement it with above the line advertising such as internet advertising and through select print...
Words: 1951 - Pages: 8
...Promotion Campaign for Amazon Kindle Situational Analysis Industry Overview The eReader market has obviously achieved its maturity stage. Although the first eReaders were introduced already in the late 1990s, the devices had grown in popularity only a few years ago, after the launch of the Amazon’s Kindle in 2007. Since 2006 when Sony introduced the American market to the first so-called “dedicated ebook reader” using electronic ink, a lot of other manufacturers decided to share a piece of the money cake. Soon Sony was no longer the monopolist on the market of this utterly new class of devices. Amazon managed to get the biggest slice of the market thanks to Kindle’s ultimate competitive advantage at that point – wireless download of ebooks, which contributed to an increase in impulse buying. At the moment, not only has the competition among eReader manufacturers escalated, but the consumers are being aggressively persuaded to buy a more multi-purpose device, such as a tablet computer, thus causing a category competition between dedicated eReaders and Tablets, most notably iPads. Growth of the market In recent years, despite tough competition from tablet computers, the eReader market has been experiencing outstanding growth rates. The number of ereader owners in the US has doubled in May 2011 since November 2010 from 6% to 12%, according to Pew Research Center, which is outstanding compared to the growth of tablet ownership: only 60% growth over...
Words: 4184 - Pages: 17
...Amazon Kindle Case Study The case study under review in the McGraw Hill text International Business: competing in a global marketplace on page 533 deals with the Amazon Kindle e-reader. The e-reader market quickly became flooded with competition from many competitors who have found ways to design the products mainly in the United States but find cheap parts and labor by outsourcing manufacturing to other countries. This international competition is no surprise in an increasingly global market. When deciding where to manufacture the key components of the Amazon Kindle, the main driving factors considered were sleek design that is highly functional and reliable with relatively low price. In designing the display, Amazon utilized the design expertise of a leading company in Cambridge, Massachusetts. E Ink designed the microcapsule beads that make the Kindle’s display visible with miniscule amounts of battery. Despite the research and design coming from American firms, there are no American firms that have the ability to manufacture the “bistable electrophoretic display” that shows an image without utilizing battery power. Amazon landed on a Taiwanese based company to manufacture the display components; which are the single most expensive to manufacture, costing about $60 per unit. Next the wireless card is designed by Qualcomm in San Diego and allows the Kindle user to access the digital bookstore wirelessly. The component cost about $40 to manufacture and is produced by...
Words: 715 - Pages: 3
...A new tablet enters the market almost every month. However, Amazon’s Kindle Fire has declared war upon its competitors especially Apple’s iPad. It has become popular because of its affordable price in a market that is mainly dominated by the iPad. But the question remains: can it take on the market leader for tablets? Although the advertising and marketing campaigns have made the Kindle Fire’s unveiling successful, many shortcoming compared to the iPad cannot be ignored. The Amazon tablet does not carry an onboard camera. This can be a big deterrent to many perspective customers whom seek this basic feature that has almost standard on all portable communication devices. No 3G capability also limits the target customer base to those who plan on accessing the internet exclusively in wireless zones. Moreover, 8GB of storage compared to iPad’s 16GB is another reason why the Kindle Fire’s selling price is so low. The Kindle Fire’s claimed battery life is two hours less than iPad’s 10 hour expectancy. Also, Bluetooth technology has not been integrated into the Kindle Fire. Besides these shortcomings, the Amazon tablet does have upsides that have helped increase its reputation. The price difference is the greatest argument that can be made when one deliberates the pros and cons of the Kindle Fire. It also weighs less than the iPad, possibly due to the smaller screen size. The Kindle Fire did not spare too much in terms of performance and is in many ways, just as proficient as the...
Words: 453 - Pages: 2
...Amazon Kindle People Centric Idea Challenge: Situation – II Education is the sunrise sector in India. A study conducted by the International Institute for Communication and Development (IICD) indicated that 80 percent of its participants felt more aware and empowered by their exposure to Information in Communication & Technology(ICT) in education, and 60 percent stated that the process of teaching as well as learning were directly and positively affected by the use of ICT. Appreciation of technology in India is high but availability of technology is low. What does it take to sell Kindle? Bring engagement of students, Provides simulation for interactive learning, Useful for differently abled students. How does it help to overcome current limitations? Reduction in over dependence on books, Makeover in the image of Government institutions. Why does it investment make sense? The plan is to make Kindles available in 3 phases, at all govt. schools for primary and secondary education purposes and also at it is for vocational training, by the Govt. of India at a subsidized rate. | Phase 1 | Phase 2 | Phase 3 | Time Frame (4 years) | 1st to 18th month | 13th to 30th month | 25th to 48th month | Segmentation:Population Density (High) and Gross State Domestic Product (Low) | Bihar, Orissa, Madhya Pradesh | Arunachal Pradesh, Rajasthan, Punjab, Haryana | Maharashtra, Gujarat, Tamil Nadu, Delhi | Targeting | Govt. Schools(Primary, Secondary, Higher Secondary) |...
Words: 409 - Pages: 2
...latest tablet made by Amazon – the Kindle Fire. We will discuss about its main features, as well as compare the overall cost to make our iPad 2 with the Kindle, to see whether it can be our direct competitor or not. Firstly, let’s take a brief look about Amazon and its main weapon – the Kindle Fire. Amazon is an international electronic commercial organization, with the headquarters located in Washington, United states. Together with Alibaba, Wal-mart and eBay, the company is considered to be one of the largest online retailers in the US. At first, Amazon is purely an online bookstore. Later on, it has decided to diversify its merchandise to provide many other goods, such as movies, songs, applications and many more. The Kindle Fire is a mini portable computer, also known as a tablet, which is Amazon’s attempt to enter the promising tablet market. Initially, it was just a device that allow people to read online books and that’s it. When it was firstly announced at the end of 2011, it has been considered by many reviewers to be the real competitor of the iPad 2. It was the second best selling tablet at that time, right after the Apple’s iPad 2. Now, we compare the Kindle Fire with the iPad 2, based on the functionality aspect. <Nhìn bảng so sánh 3 tablet> We can see that in general, the iPad 2 has more functionalities than the Kindle Fire. It has camera and Bluetooth, while the Kindle Fire does not. Thus, the iPad 2 will perform better then the Kindle Fire If you take...
Words: 1086 - Pages: 5
...Team Project: Strategic Product Review for Kindle Fire HDX GB580: Strategic Management Dr. Ray Kalinski July 15, 2014 Table of Contents Abstract……………………………………………………………………………………. 3 Introduction………………………………………………………………………… …….. 4 Strategy Canvas …….……………………………………………….................................. 5 Buyer Utility Map………….……………………………………………………………… 6 Blocks to Utility…………………………………………………………………………… 7 Removal of Utility…………………………………………………………………………. 9 Three Tiers of Non-Customers for Kindle ………………………………………………... 11 References…………………………………………………………………………………. 14 Appendix A…………………………………………………………………………………17 Appendix B…………………………………………………………………………………18 Abstract In 2004, Amazon decided to enter the market for the e-reader tablet devices with the creation of the Kindle Fire HDX. The initial Kindle Fire HDX proved to be successful as it became the gateway to gaining access to books, articles, and newspapers without having to carry them around. Eventually, the Kindle Fire HDX electronic access started outselling the printed versions of novels, which lead to a revolution of technology. More customers started to become comfortable with online reading and reviewing of their daily newspaper rather than waiting on the delivery person. Other companies such as Apple with the (iPad) and Samsung with the (Galaxy) entered into the tablet competition in 2009. This strategic analysis will be conducted by reviewing the strategy canvas for each of the three companies, the buyer...
Words: 4138 - Pages: 17
...companies have failed? Amazon has succeeded because there prices are unbeatable, they have many rewards and perks for faithful shoppers. Amazon customer service is superb mainly because they are available 24 hours a day; they answer their phones and the go above and beyond with customer service. Case and point I order and item that was defective (the first defective item in 6 years of shopping with Amazon) and the seller ignored my emails and request, so I contacted Amazon customer service and my money was refunded no questions asked within 24 hours and I was told that there was no need to return the defective item to the seller. The ease of the website when shopping on Amazon is so simple. There is a lot of white space so things are not jumbled together. The Website is very user friendly easy to understand and in easy to read text, all items have picture and specifications. There are many sellers with ratings to add to your shopping experience you are able to read other shopping experiences with a specific seller. Prices are comparative to going to the actual store but I have found that by shopping around you could find the exact same items for a lot cheaper. This beats the heck out of driving around looking for that discount. Amazon customer service is unparrellel and many of their customers are happy repeat cutomers. This is very noticable by the reviews of their products, the reviews of the seller and the reviews of the shipping speed. Amazon gives incentives for...
Words: 822 - Pages: 4
...Amazon is not a good example of a company that accomplished technological leapfrogging in the book industry. In an industry where a standard has emerged the company that holds the rights to it and can appropriate much of its network externalities is called an incumbent. Due to the competitive advantage offered by a standard, the incumbent is always challenged by companies attempting leapfrogging- the replacement of current standards by a new, incompatible technology that is usually realized through the improvement of the technical characteristics of the product. Looking at the book industry, more precisely, at its newly developed E-book segment it became obvious for all the competitors that the dominant design of the platform on which the new products will be consumed can offer a competitive advantages for the company that establishes it. The standards wars for the platform on which the virtual books will be consumed began in 1971, with the creation of the first digital library, Project Gutenberg. Until 1998 the dominant design and only alternative was the personal computer which was replaced by the first eBook reader, the Rocket eBook. Although commitment and funding where invested in the new technology, due to limited complementary products, unstable formats and high prices it failed to become a standard. The development of e ink electronic paper by Philips was the first sign of a dominant design with Sony quickly adopting it in 2006. By 2007 the E book reader segment...
Words: 813 - Pages: 4
...Amazon Amazon is Britain's most influential retailer - and it doesn’t even make a profit Amazon has become the biggest online retailer in the world and the most influential retailer in Britain, here are a couple of questions that shine a different light on the company. When it generated sales of $15.7bn (£10.1bn) in its most recent quarter to June 30, how big were Amazon’s profits? Zero. It made a net loss of $7m.Given the retrenchment of retailers such as Tesco from the electrical market because of the growth of online sales. What share of the UK electrical market does Amazon have? Every retailer in the country – from Tesco to the corner shop newsagent – talks about how they are battling to evolve their own business to cope with the growing influence of the Seattle-based company. The mighty Tesco has been forced to admit its biggest hypermarkets are outdated and overhaul its non-food range, Comet and HMV have fallen into administration, newsagents have installed lockers where shoppers can collect Amazon orders, and people are now reading books on their Amazon-made Kindles. Even those retailers operating in sectors that Amazon does not currently serve – such as food and fashion – are worried about what happens when it starts. At the same time, so many uncertainties remain about the future of Amazon, launched in 1995 as an online bookstore. The row around the lack of corporation tax paid by online multinationals such as Amazon tended to miss this pivotal point – which...
Words: 2535 - Pages: 11
...Ana Gonzalez Professor Andreassi MGT-101-A 6 October 2014 Case 4: Amazon: One E-Store to Rule Them All 1) The CEO of Amazon.com, Jeff Bezos, effectively employed both intuitive and systematic thinking when he developed the Kindle for sale. Through Bezos’s creative idea in the Kindle, one can see that he makes decisions that seem to be based off of intuitive thinking. With this approach, people make decisions according to their past experiences and gut feelings, as opposed to analyzing all of the facts. Bezos took a risk in the creation of the Kindle going off of his gut feelings that it would be a successful idea. From previous experiences, he knew that “music and video have been digitalized for a long time, and short-form reading has been digitized, beginning with the early Web. But long-form reading really hasn’t”. The company needed a push to rise above their competitor, Apple, and Bezos was able to provide a creative idea that he thought would work based off of things he has experienced. Fortunately for Amazon, his intuitive idea was a success and “Amazon now sells more Kindle books than paperback books”. On the other hand, the development of the Kindle also reveals Bezos’s ability to think systematically. Systematic thinking involves a “rational, step-by-step, analytical” approach to problem solving. Someone who thinks systematically tends to use facts and details to lead him/her to decisions. Also, systematic thinkers often break down problems into smaller...
Words: 915 - Pages: 4
...change the way the world shops. Through their online store and using today’s high-tech technology they have shown the world a new form of sales and have become one of today’s biggest online stores. Globalization Amazon.com has taken two steps to ensure it has some breathing room between itself and the burgeoning list of competitors in the e-Book e-Reader marketplace. Amazon.com lowered the price of the bestseller Kindle as well launching the Kindle DX with U.S. and International Wireless now enables readers to wirelessly download content in over 100 countries and territories. The product will be aimed at U.S. Consumers who want the freedom to use their e-readers overseas as well as eager consumers outside the U.S. who have had limited e-reader choices to date Kindle “global edition” is powered by AT&T. Amazon.com was partnering with Sprint as their wireless partner when the first Kindle was launched using “Whisper sync.” AT&T has a network of global partners who come together to provide AT&T customers global cell phone reach. The difference is that Amazon foots the bill for the bandwidth (upfront) used to download books. In the case of downloading newspapers, the cost is passed on to the customers who pay about $10 per month for each newspaper subscription. International customers can...
Words: 1401 - Pages: 6
...DISCUSSION - In what ways does Bezos’s decision to develop and deliver the Kindle show systematic and intuitive thinking? First, Bezos has shown his intuitive thinking in the decision of unveiling Amazon Kindle, a new device that is completely outside Apple’s catalog though Amazon still sold Apple’s iPod. Furthermore, he introduced to Medias his product, it seemed like a declaration to Apple. Because Apple is a giant of technological industry, so the situation would be complex to be its competitor. However, it was the only way to make a technological evolution by Kindle. As a result, this situation required Bezos to have a quick and broad evaluation for making the decision. Besides, the systematic thinking of Bezos was shown by introducing the free application “Kindle for iPhone and iPod Touch” when he realized the benefit of allowing readers to read books on a variety of devices. After, in order to upgrade Kindle, Amazon acquired Touchco Company, which specialized in touch screen technology. These decisions are systematic because Bezos had to analyze the situation step- by- step, thoroughly and carefully with full of information towards an effective and logical decision. DISCUSSION - How do you describe the competitive risk in Amazon.com’s environment as it leads the market for digital book downloads? Being the leader of digital book downloads market; Amazon.com is likely to face to the competitive risk from another e-commerce companies. Obviously, Amazon’s competitors...
Words: 283 - Pages: 2
...product or service. The market for tablets and other mobile devices has a wide range of options to choose from. Prices range from as low as $59.99 for a smaller Proscan tablet at sold at Wal-Mart to Apple’s iPad starting at $349.00 and go higher depending on how much memory you’d like to have included. Amazons Kindle Fire HD offers a quality product at a competitive price point considering the quality of materials such as HD camera and HD display, for around $299.00 with smaller size Kindle Fires going for $160.00 An effective pricing strategy when launching the Kindle Fire Hd would be initiating a penetration pricing policy that covers a wider demographic. Apple’s iPad appeals mainly to the elite market. Amazon doesn’t have a discount plan to offer but does have additional incentives to set itself apart from competitors. The convenience of the Amazon store means purchases and additional features and content are readily available to add to the device. Amazon Prime membership also adds to the experience offering free content available to be viewed at no additional cost. Additional perks such credits that can be used at the Amazon store including those listed above allow Amazon to motivate buyers in a competitive...
Words: 272 - Pages: 2
