1. The soon-to-be death of paperback books has
generated a wonderful-mess for the book publishing
industry and created a clear Blue Ocean
opportunity.
blue ocean strategy
2. Well – the Blue Ocean opportunity is clearly there, but who and
what is not And book publishing industry executives are far from happy
at the moment Blue Ocean opportunity refers to Blue Ocean Strategy,
the proven system for making the competition irrelevant by creating new
market spaces through simultaneous achievement of differentiation and
low cost Instead of being locked in red oceans of fierce bloody
competition, Blue Ocean Strategy moves to clear, uncontested waters of
highly profitable growth The book publishing industry, now more than
ever, faces its toughest competition to date The book publishing industry
has survived books on tape and books on phones
3. However, Amazon com's Kindle, which offers the innovative
alternative to paperback books through its 3G Wireless capability to
download electronic books in less than 60 seconds, can hold up to 1,500
books not to mention its large selection of over 450,000 books blue
ocean strategy Moreover, the recent release of Apple's iPad - The
iPad's easy-to-use interface allows consumers to play games,
navigate the internet and download electronic books
4. The ameliorating electronic movement through technological innovation
has created a crowded red ocean of competition for the book publishing
industry Amazon and Apple continue to take huge bites of profit out of
the book publishing industry requiring an inevitable Blue Ocean Strategy,
value-innovation driven, change "Traditional trade book publishers are
scared," says Harvard Business school professor (and former CEO of
Random House) Peter Olson "The world that they have known, of print
books and brick-and-mortar bookstores – the whole physical
distribution system – is on the cusp of changing fundamentally "
Recently, Macmillan, privately-held international publishing company,
battled with leading online retailer Amazon over e-pricing as the biggest
source of friction Amazon briefly removed the publisher's Kindle
editions and print book from its site after Macmillan indicated it would
begin setting higher consumer prices for e-books than Amazon's
6. Amazon eventually renegotiated terms with Macmillan, but the
confrontation reflects publishers' concern that more and more
customers are going to get used to cheap electronic pricing that will
undercut print books Publishers believe that consumers' perception
of things that are digital should be less expensive or free The ongoing
power struggle between publishers and key online retailers like Amazon
remains an open question Odd enough, the focus of publishers and
retailers is primarily on the amount of resources dedicated to the
manufacturing and physical distribution of books Blue Ocean Strategy
focuses on customers and non customers as a source for value
innovation to make the competition irrelevant The current industry
concerns are confrontation versus cooperation with retailers and e-pricing
and royalty rates
7. But, consider the solution from a different approach – a Blue
Ocean Strategy approach The major publishing companies and online
retailers are competing and worrying about the strategies for competing
For example, publishing companies are pricing their books based not on
what is costs or what people want to pay for it, but based on another
format that is completely different, just because they want to keep the old
format alive Macmillan was able to win the shot-term pricing battle with
Amazon, but couldn't Amazon just retaliate by promoting other
publishers' titles more? The electronic movement has resulted in
the inevitable – disruption happens But, what company in the
book publishing industry is going to create a Blue Ocean of highly
profitable growth and how will they do it? Can the book publishing make
the market more attractive with additional electronic features, packages,
etc? With the central focus of the publishers' and retailers'
debate on price and the adoption of the e-reader it will require the
application of the fundamental aspects of Blue Ocean Strategy –
differentiation and low cost to survive
