E-Commerce of Online Book Publishing Company

E- Books are such types of books which can be read by digital means without having printed copy. According to the study of Armstrong (2008), e-book can be any text that is readable by electronically without printed form regardless its size and origin or composition. Day by day, the numbers of e-books as well as e- book publishing companies are increasing because of technological advancement, pointed out by Li (2010). However, success of e-book publishing business mostly depends on establishing a successful business model. According to the finding of Vasileiou et al. (2009), establishing e-books related business model is now very complex and there are many incompetents between the producers and the products. Though there are significant advancements have achieved in e-book technology, there are still various incompetents exist in the industry of e-book business. Tonkin (2010) pointed out that, the reader of e-books are becoming easy to Use but, still there are various types of e-books reader and e-books which are not made according to standard format and creating problems. Today people can not think a world without e-book. Hillesund (2010) opined that, today’s world can thinkable without printed books but can not without e- books. It is clearly indicating the popularity of e-books among the people across the world. In this assignment it is elaborately discussed about building a new e- book publishing company named Books r Us. It included the area of industry situation of current time, analysis of SWOT as well as porter five competitive forces. It also covered the area of generating business model, revenue and pricing strategy. At the end of this, a website for Books r Us is built with various types of features.
In order to establish a profitable online book publishing business, first of all business environment should be evaluated and understood. Because, there are various environmental factors included inside and outside of business have significant impact on ongoing business operation. Situation analysis is the first approach of understanding a business environment.
Situation analysis of online book publishing business means collecting information from past and present about political, economical or other environmental factors to evaluate impact on online book publishing business. In this case our product is online book publishing, from where books are available to the website and the interested buyer can buy books with the online payment system. As on Mussinelli (2010), day by day online book publishing company is increasing by number and quality of services as well. Though there are various types of draw backs of online book publishing, according to the research of Wischenbart (2010), the year 2007-08 was very much positive for the online book publishing companies, because of significant advancement on book reading as well as payment system have achieved. In this season, the world largest e- book seller Amazon introduced kindle service to read book online. Situation analysis is also included SWOT analysis as well as PEST analysis.
SWOT analysis means analysis the strength, weakness, opportunity and threat of a particular business. This analysis gives a business, internal as well as external possibility of success in business operation. Though there are some limitations of SWOT it is very popular among the analysts. SWOT analysis of online books publishing company is given below:

Strengths | Weaknesses | Opportunities | Threats | Strong & nice finishing | Difficulty in reading | Chance to add other features | Piracy problems | Environment friendly | More expensive | Books can be printed within a notice | Breaking copyrights law | Make customer more loyal | Problem of amature publishing | Distribution cost is low | Reduce the percentage of sale | Publication need very short time | Reading from PC may hamper eye | Author can get some earnings | Overpaid by the print publisher | Ability to arrive everywhere | Depends on internet accessibility and speed | Smart people be happy to Use | Server may be terminated |

Table 1: SWOT analysis of online book publishing company
Another term in addition to SWOT analysis, porter five forces is Useful tool to analyze business environment situation. These five forces evaluate the industry performance and business strategy to measure competitive advantages of a business environment situation whether it is favorable or unfavorable for a new entrance (Porter, 1979). The more powerful of forces indicates the lower profit of a business. These five forces assess the weal points of business and try to build a strong market strategy (Porter, 1979). These five forces are illustrated below:
1. First of all, the bargaining power of buyer is important because if the number of buyer is less compare to seller or switching cost from present product is less or buyer’s profit margin is lower, sale of product will be less.
2. Secondly, threat of new entry should be considered. There are various types of threat can be appeared like, economical difficulty, product differentiation as well as governmental rules and regulations. All of these elements should be considered.
3. Thirdly, Bargaining power of suppliers should be considered. The power of supplier, substitute input resources, importance to industry to the suppliers and suppliers product differentiations should be monitored.
4. Fourthly, threat of substitute should be considered. The relative price of substitute, their competitive advantages as well as switching cost should be monitored. Print publishers want to publish book at a low cost and can achieve more efficiency in production.
5. finally, intensity of competitive rivalry should be considered because, it focuses the sustainability of competitive advantage between online and offline business and advertising expenses.
To complete the situation analysis, analysis of business strategy among the various online books publishing company should be considered. Today’s online book publishing business is too competitive and opportunistic. To survive in this competition, one has to set a strong business strategy. Business strategy is a set of goal by which a firm can compete with its competitor and can gain a space for business operation said by Lamb et al. (1984). In the industry of online book publishing, Amazon is the most dominating firm; they introduced various customers’ friendly system like, e-book reader kindle and other various features like, delivery within a short time at a low cost. Scholastic Ltd. An UK based online book publishing company; they publish baby books, picture books, novel books through online. They are specialized in baby book publishing and that is their competitive advantages. Hodder education is another UK based online book publishing company; publish medical related books through online. Their specialty is in the area of medical. So, in order to determine launching online book publishing company, publisher must understand the area of coverage by the company and set a strategy to achieve the ultimate goal.
To establish an online business, first of all a business model should be develop. This model helps to build up the business as a profitable and a structured format. According to George and Bock (2011), a business model is the A-Z structure format for a business, including the planning, establishing strategy, managing business as well as financial solution. There are various types of business model for e- business, including storefront model, auction model, portal model, dynamic pricing model, B2B exchange model etc. Books r Us will be online book publishing business so, it should need an appropriate business model
Day by day, online shopping is gaining popularity among the internet User with the increasing number of internet User said by Dodd (2000). Among the various business model storefront business model is more suitable for Book R Us. Storefront business model is the true e-commerce website based business, including virtual store for books, categories of various books, payment system, delivery system to the customers etc. There are several functions in this business model these are given below:
Firstly, transaction processing of the business is one of the core functions of storefront business model. Books r Us can able to processing its transaction under this model very efficiently.
In addition to transaction processing, security of the website also be considerable. In this model, security of the website of Books r Us will be fully protected. After that, payment system will be determined. Payment system should be so easy and wide to pay by customer very conveniently and efficiently.
Books r Us will include in its website the following categories of services by following storefront business model:
1. Various categories of products
2. Order processing
3. Secure payment system
4. Fulfillment order timely
5. Customers profile
6. Information store
After the selection of business model, Books r Us should develop its revenue model and pricing model to estimate revenue and the expenses of business operation. Most of the e- books Users said that, price of e-books should be less than printed books; because they do not think they are getting a tangible thing. Lower internet search cost make it is more competitive for the seller because, buyer can compare with others within a second and may switch. As a result, according to the study of Bakos (1998), book publishing company should set a such type of pricing strategy that makes buyers to difficult to compare others. Therefore, e-book publisher should give 19% VAT to the government, so they can not reduce the price of e- books dramatically. In addition to this they should pay 20%-30% commission to the author. So, pricing is the most difficult task for any online book publishers. In this circumstance, Books r Us can determined several factors to establish a price of their books. They cay establish the quality criteria like, low quality books $2- 2.50, medium quality $3.5-5 and high quality $6-8. These quality criteria should be influenced by various factors like, author popularity, length of books, series or not, fiction or novel, readers opinions etc.
(Website information)

Payment process is the core concern for an online book publishing company because, all of their customers are unknown and if they take any illegal action to the payment system, business will not sustain in the competitive market. There are various ways to collect payment from customer like, credit card system, PayPal system, E-check, wire transfer etc. Books r Us will Use credit card payment system as well as PayPal payment system to manage payment system more conveniently.
Credit card payment system is now one of the most common types of payment system all over the world (Turban et al. 2008). In case of credit card payment method Books r Us will allow Visa, Master card and American express card. In order to Use this service, credit card company will charge 2%- 3% on total transaction and customer should be paid 50- 60 cents for each transaction with the books r Us.
Another method of payment system PayPal will also be available for the customer of Books r Us. In order to Use this service, PayPal will charge a portion of total transaction but, they can not charge any monthly fee unlike credit card payment system. PayPal system will be less expensive compare to credit card payment system.
When a new company or printed publishing company wants to enter in the online publishing business, there should be some advantages as well as some risk involved. Moving into online publishing business makes firm to produce with low cost. Allen and Fjermestad (2000) asserted that, this less cost of production leads a firm to increase sales. As a result, books r Us can expense its area of business. Porter (1987) previously found out that, expansion of product line will lead a firm in more competitive advantages. In addition to this, Saehney and Zabin (2001) claimed that, online e-book publishing companies can get great enhancement of production, quality as well as profit making. Moreover, online business make customer more loyal than other business as described by Kotler (1994). So, loyal customer makes sales increase by making affiliation marketing which is cost less advertisement.
In addition to advantages, there are some risks involved in case of online book publishing company. Books r Us cannot increase its price whatever they want, because internet makes it so easy to compare with other firm of same product. Sinha (2000) asserted that, consumer can get any information related to product within a second by Using internet. Another point of risk is that, firstly the online e-book business cost will be more because of advertising cost. In this regard, Carter (2000) pointed out that, online business firms are crazy to pay TV ad or other ad to increase their brand image which incurred more cost. As a result, they can not adjust their product price with the industry standard price. That may decrease overall sales of product. The new business model may fail and there is no guarantee for the initial investors. There is another major risk involve in online business is security issue. Security issue may arise when a privacy of one party is broken. Privacy is a very serious issue of today. Furthermore, Fisher (2001) argued that, about 41% online User said they removed their personal information from various website because of privacy problem. He also added that many firms misuses theirs customers personal information. On the other hand, Books r Us can face the threat of hack. In this regard, David (2000) illustrated that, hacking is now a very serious issue which may incur millions of dollar damages. For solving this security problem Books r Us can appoint a web security expert to establish a strong platform.
At the end it should be concluded that, online book publishing business condition is quite good in recent days. There are significant advancement has achieved in the field of e-book reader and this will accelerate the sales of e-books from various online book publishing websites. Amazon introduced e- book reader kindle and Apple computer make special opportunity to read books online. As a new comer Books r Us should adopt the above business model to compete with the market. They should adopt a competitive and efficient revenue and pricing strategy to sustain in the market. Payment system and the security of the customer’s personal information and website should be given top priority. In addition to theses, there should be some threat in the real field so, there should be always an alternative plan or disaster recovery plan as well as back up facility. After all, as on life, business activities may not go smoothly. As a result, books r Us should open its eye to find appropriate opportunity to gain or keep the competitive advantages.
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