XEROX: BOOK-IN-TIMEMBAM 619: Strategy
February 6, 2008Sarah Gay, Gaurav Gupta, Samir Mohan,
Sandro Olivieri
PEST: P & E
Political:
Federal government appeared likely to increase funding for libraries and the arts.
Economic:
US economy was beginning to recover during the mid 1990’s
PEST: S & T
Social:
Higher enrollment levels in schools and colleges.
Concerns about the aging U.S. population.
Technology:
Rapid changes in office technology.
The printing process is becoming more automated and computer controlled.
PEST ANALYSIS
Nature of Change Potential Impact of Change
Opportunity or Threat
Strategic Response
PoliticalFederal government appeared likely to increase funding for
libraries and the arts.
Libraries will be looking to increase their
book reserves
Opportunity: Increased need to
publish new and old manuscripts.
Explore discounts for federal institutions.
Economic Economy is recovering from the recession of the 1980’s
Increased consumer and government
spending.
Opportunity: Increase in retail spending.
Social
-Higher enrollment levels in universities.
- Concerns about the aging population
Increase in medical and health-care related titles
and textbooks.
Opportunity: Increase in demand for specialty titles.
Make it possible to print short runs of
specialty titles.
Technology Increased technology Increased electronic publishing.
Threat from IBM and other companies to do
small run printing.
Partner with retailers and market the lower
cost BIT printers.
PUBLISHING INDUSTRY VALUE CHAIN
Papers, printing presses, ink, manuscripts
Publishers
Wholesalers
Retailers
Customers
PUBLISHING INDUSTRY CHANGES
Publishing industry is moving from a literary focus to a profit focus.
The printing process is becoming more automated and computer controlled.
The book market is growing at 5% a year.
Publishers CustomersWholesalers Retailers
5%
Value Added
2%
5%
Profit
Value Added
Profit
Value Added
Profit
PUBLISHING INDUSTRY VALUE CHAIN
Publishers COGS•20% manufacturing costs•20% covered royalties, rights, etc.•30% covered sales and marketing•25% covered book return costs
Publishers CustomersWholesalers Retailers
5%
$14.63
2%
5%
$0.77
$2.00
$0.35
$6.00
$1.25
$25 BOOK W/ WHOLESALER
$25.00
VALUE CHAIN: VERSION 1Major Expenses for Publishers•$3.08 = manufacturing costs•$3.08 = author royalties, rights, etc.•$4.62 = sales and marketing•$3.85 = book return costs
Publishers CustomersRetailers
5%
$15.77
5%
$0.83$7.15
$1.25
$25 BOOK WITH NO WHOLESALER
$25.00
VALUE CHAIN: VERSION 2
Major Expenses for Publishers•$3.32 = manufacturing costs•$3.32 = author royalties, rights, etc.•$4.98 = sales and marketing•$4.15 = book return costs
BOOK-IN-TIME PRINTING
Target Audience for BIT printing: Anyone looking to print less than 1200 copies of a “book” (book may include training manual, instruction book, out of print manuscript, etc.)
Pitch: Earn profit on books that were previously too expensive to bring to market on a per unit basis.
Sell products that are out of print at a cost of $6.90 a unit.
Over 1,000,000 titles go out of print every year in the United States. Worldwide, over 20,000,000 titles a year go out of print because of low demand.
No need for shelf space - print as you need it.
XEROX B-I-T POTENTIAL BUYERS
ThenewBook‐On‐Demandmarketwills5llneedanintermediarytohandlethedigitalmanuscriptsandshopthemtotheownersoftheBook‐In‐Timeprin5ngequipment.Theintermediarycouldbe:
Thepublishersthemselves
Poten5ally,ariseofindependentauthorsshoppingtheirmanuscriptsdirectlytoAmazon.comthroughaniTunesmodelofindependentdistribu5on
THE NEXT STEP: PRINTING
• FedexKinko’s and other office supply stores
• Upon purchase of content through Amazon or another e-tailer, option to print at local office shop
• Boutique printing houses
• Small run zines, programs, pamphlets
• Major retailers – Barnes & Noble, Borders…
• BIT installations at the distribution centers could still ensure a 24 to 48-hour turnaround.
• Major and Mid-Sized corporations
• Printing of training materials, advertisements, and other materials office
Publishers CustomersWholesalers Amazon
5%
$13.93
2%
5%
$0.73
$2.00
$0.34
$2.00
$1.00 $20.00
VALUE CHAIN: AMAZONMajor Expenses for Publishers•$3.08 = manufacturing costs•$3.08 = covered royalties, rights, etc.•$4.62 = covered sales and marketing•$0.31 = covered book return costs (now only 2%)