The digital education industry is delivering increased amounts of education content to classrooms every year. Pearson should make a credible entry into this market by providing free eReaders to educational institutions and bundling the eReader with content subscriptions for digital textbooks. Pearson’s entry into the market will help them to retain bargaining power over other eReader providers by providing them with a real value option. By outsourcing the eReader manufacturing, Pearson can combine their design ideas and content with the manufacturing expertise of the outsourcer. Pearson can continue to focus on its core competency of creating unique educational content by partnering with a manufacturer to own the complete end-to-end classroom experience, making the vision of a paperless and interactive classroom a reality.

1. PEARSON eTextBook Reader Ahmed Tantawy Brian Guernsey Josh Lauman Pranav Dharwadkar Tapan Kamdar

2. Hawk and Dove

4. 37% market share

5. $880.5 Million profit Education segment

7. Physical vs. Digital Model Physical Model Author royalties = 7% on a book sale Rents captured by Publisher & Wholesaler Digital Model Partial book sale, subscription model Removes middle man (Wholesaler) Added value provided by publisher to educational institutes

9. Recommendations Partner to build eReader Interactive content for textbook market New subscription model for schools V/S

10. APPENDIX

11. Porters Five Forces

12. Modeling Parameters- Savings Schools $$ and penetrating additional segments Overall School Savings

13. Financial Model- $10 digital replacing $60 textbook; retaining 37% market share