Using Porter's Five$-$forces Model

In this task, you will use Porter's Five$-$forces model to help analyze the book publishing industry, based on the information and data presented below.

Summary Information about the Book Publishing Industry:

$-10\%$ of books are sold via independent retailers that tend to specialize in a particular genre or prefer specific $($not mainstream$)$ books

$-30\%$ of books are sold via large retail chains that only deal in mainstream books, published by large or long$-$established publishers who also provide promotional

dollars to support their books

$-60\%$ of books are sold via the internet $($e$.$g$.$ Amazon$)$ and this is expected to dramatically increase as they increasingly capture the time$-$poor or budget$-$conscious market segments

$-$ Book sales have been fairly stable in this mature industry, however they are

expected to decline in the future as internet and cable$-$TV usage increases

$-$ There has been a dramatic increase in self$-$publishing over the past $10$ years,however these books are typically not accepted by retailers and tend to have print runs of less than $1,000$

$-$ E$-$books are now in their early maturity phase of their product life cycle. Their sales are expected to continue to increase over time

$-$ Audible books are increasing in popularity, potentially at the expense of e$-$books

$-$ Podcasts are now be considered to be a significant competitor to audible books and, as a result, have become an indirect competitor to e$-$books

$-$ There is an increased number of authors in the marketplace, appearing to be driven by easy access to research material $($via the internet$)$ and by the increasing popularity of blogs

$-$ Despite more authors available, there is only a small number of "brand" authors who can attract significant book sales on their name alone

$-$There is an increasing number of large book publishers, as the larger ones battle for market share by acquiring smaller publishing houses

Student Discussion Questions

$1-$ Assess the book publishing industry using Porter's Five$-$forces model.

$2-$ What key insights have you gained by assessing this industry using this structured

model?

$3-$ Therefore, what is your overall assessment of the attractiveness of the industry?

$4-$ How could a firm use Porter's Five$-$forces model in their strategy and planning activities?