Strategic Management in Action: 1. Using The Eight Conditions, Assess The Level of Current Rivalry in This Industry?

Strategic management in action
Digital technology has disrupted all types of industries—from financial sen/ices to recorded music.
One industry that's seen a significant impact is the publishing industry. E-book sales have
skyrocketed, and one publisher went so far as to predict that e-books could account for as much as
40 percent of total revenue by the end of 2012.
Reading those e-books requires a device and the completion in the e-book device industry is fierce.
Amazon fired the first volley when it introduced the Kindle in November 2007.
As with any new product, customers had to get used to the new technology, but once they did, the
Kindles were on fire I Two years later, retailer Barnes & Noble introduced the Nook, a cheaper e-book
device. Amazon responded by cutting the price of its cheapest Kindle. Three months later in January
2010, Apple introduced its iPad. Although it was a more ex- pensive tablet, its functionality and
options attracted a lot of attention and sales. In response, Barnes & Noble cut the price of its Nook,
and Amazon again cut the price of the Kindle.
By September 2011, Amazon dropped Kindle's starting price to $79 and launched Kindle Fire. Then in
November 2011, Barnes & Noble joined the tablet battle with its $249 Nook Tablet. And these are
just the top three competitors. Other industry competitors include the Sony reader and endless
Ideas' Be Book Neo. As the popularity of e-books continues to grow, the "reader wars" are likely to
continue.
1. Using the eight conditions, assess the level of current rivalry in this
industry?
• Number of competitors: The market structure refers to the number, size. Generally, the more
competitors there are, the higher the rivalry. There are a several competitors in the e-book
device industry including apple, Barnes & Noble, Amazon Sony, endless idea
• Diversity of competitors: diversity of competitors in the e-book industry extends beyond just
price points, with each major player offering a range of products tailored to different consumer
preferences.
• Industry concentration: Moderate to high, with a few dominant players (Amazon, Barnes &
Noble) and additional competitors. The e-book industry, particularly in its early years,
demonstrated characteristics of high concentration, with Amazon's Kindle playing a dominant
role.
• Industry growth: The e-book industry, marked by high growth, due to the increasing popularity
of e-books.
• Brand loyalty: There is some brand loyalty among customers, particularly for Amazon and Apple.
• Barriers to exist: companies are more likely to stay and compete, increasing rivalry. But There
may be some barriers to exit for smaller competitors.
• Quality differences: quality differences play a crucial role in shaping the competitive landscape.
Each major competitor “Amazon's Kindle, Barnes & Noble (Nook), and Apple's iPad”strives to
differentiate itself by offering unique features and enhancing the overall quality of the reading or
multimedia experience.
• Switching cost: the e-book industry switching costs are low, customers are more likely to shop
around and compare different options. This may increase the rivalry, as competitors have more
opportunity to attract customers with lower prices, better quality, or superior service.
2. Which of these eight conditions do you think are the most important to
the level of current rivalry in this industry?
• Number of competitors: The number of competitors sets the stage for overall
competitiveness. In the e-book industry, the presence of major players like Amazon,
Barnes & Noble, and Apple, along with other smaller competitors, contributes to a
highly competitive landscape. The more competitors there are, the higher the
intensity of rivalry as each vies for market share.
• Quality differences: Quality differences directly impact consumer preferences and
purchasing decisions. In an industry where the primary product is a digital reading
device, the quality of the reading experience, features, and technological innovations
are paramount
3. As the industry matures, do you think the intensity of rivalry will
change? Explain?
As the e-book device industry matures, the intensity of rivalry is likely to change, As the industry
matures, weaker competitors may struggle to capture market share and sustain profitability. As
the number of competitors decreases, the level of rivalry may reduce
How ever it seems that the rivalry between the big companies will continue as long as there is a
change in the big companies to make new products and come up with attractive innovations.
with then it is possible to succeed

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