MARKET STRUCTURE

Market Structure

Market Structure

Introduction

A host of challenges faces the book publishing industry, including the development of the Internet as an alternative distribution channel. This permits the bypassing of traditional publishers. However, an expanding regulatory regime making copyright infringement more difficult and hazardous is expected to reduce the fall in sales due to online piracy. The increased penetration of PCs and the increasing capabilities of cellular telephones and other handheld devices are expected to drive growth in the popularity of e-Books. Several high-profile writers have used such technologies to publish work, although more optimistic predictions by enthusiasts have proved unfounded. In order to survive, companies are advised to develop forward-looking and flexible strategies, which acknowledge the benefits of new and developing technologies (Ebrey, Walthall & Palais, 2006, pp.1).

Hence, publishers have initiated a series of pro-reading campaigns targeting key age groups and categories. Demographics indicate reading levels and demand for books will increase as the baby boomer generation ages. Established players are increasingly initiating aggressive acquisition and merger strategies in order to reduce operating costs and expand product portfolios. This marketing plan focuses on the expansion to Asia Pacific by establishing an office in Shanghai. China and will analyze the PEST, SWOT and Porter's Five Forces Model.

Market Analysis

The books market includes atlases, dictionaries, encyclopedias, text books, guidebooks, musical scores, maps, fiction and non-fiction. All physical books sold from internet sites like Amazon.com are included, but e-books are not included. The market is valued at retail selling price (RSP) with any currency conversions calculated using constant annual average 2009 exchange rates. For the purposes of this report, Asia-Pacific comprises Australia, China, India, Japan, Singapore, South Korea, and Taiwan. The arrival of the Internet as a key business tool has worried those involved in the traditional book publishing industry. Just as the arrival of the motor vehicle heralded the demise of the horse-and-wagon, so the Internet and eBooks will make printed media redundant. Many have predicted the inevitable demise of the bricks-and-mortar bookseller, and foresee dramatic reductions in publishers' revenues as both consumers and writers alike circumvent traditional media and distribution channels. Whilst the explosion of the dotcom bubble has eradicated the more radical prophecies, the onus is with established players to seize the opportunities afforded by new technologies (Chang & Owen, 2010, pp.35).

The market was worth $25.4 billion in 2001. This is expected to grow consistently, reaching a value of $30.03 billion in 2006, representing a CAGR of 3.8% (Riehecky, 2008, 221-224). The overall book publishing market has weathered the US economic slowdown relatively well. Trade and professional publications continue to dominate, although the recession has negatively impacted demand. As the economy continues to recover, sales in this sector are expected to recover. A more reflective, spiritual mood in the US population produced significant dividends for publishers of religious texts, with sales increasing by almost 5%.

Porter's Five Forces Analysis

The books market will be analyzed taking retailers of academic, professional, general and other trade books as ...