Question

According to the College Board, undergraduate students spend on average more than $1000 per year on textbooks.* As a college student, you've suffered the high prices of textbooks, and you're going to do something about it! Let's say that after you graduate, you decide to start your own textbook publishing company. You will need to find a way to appeal to both professors and students with high quality and reasonably-priced products, but you've also got to make a profit.

Feel free to do your own research on this topic -- be sure to cite your sources!

• What will the strategy be for your textbook company? What external forces are driving change in the textbook industry and how does your strategy address that change? How are you going to remain competitive and profitable in a very tough industry?

Answer 1

Clearly, for such a massive task, tasks need to be divided into operations, accounting/ budgeting, marketing, etc. However, clearly this industry is extremely competitive as market with presence of major players such as Cengage Learning, Houghton Mifflin Harcourt, McGraw-Hill Education, Pearson Education, etc.

However, our major value proposition is that our books will be cost lower than current market availabilities.

The Book Publishing industry has undergone some restructuring over the five years to 2017 to adapt to evolving consumer preferences. While technological changes in the industry have facilitated the proliferation of digital book development and retailing, operators have never quite gotten the balance between growing both print and digital books. The increase in paperback volume during the period has come at the expense of the more expensive e-books, ultimately producing a self-cannibalization effect. Over the five years to 2022, publishers will increase investment in the internet and other media outlets to directly interact with consumers and boost e-book sales.

Opportunities

• Publishers are restructuring operations to take advantage of new technologies
• Technological developments have heavily influenced consumer demand
• The growing dependence on e-books leaves publishers exposed to changes in downstream markets

ANother major trend is that education publishers don’t just sell books; they deal in information.

The classic example of this is McGraw-Hill. Besides being the second largest textbook publisher, McGraw-Hill owns Standard & Poor’s — a combination publisher, stock index, investment researcher and credit rating agency. This seems less odd if you know McGraw-Hill’s flagship publication since 1929 has been BusinessWeek, which it sold to Bloomberg in 2009.

Further, every education publisher knows that its biggest growth opportunities are digital products and services, expansion into global markets, and efficient investment in its content-based enterprises (like books and journalism).

Each of them are working on end-to-end solutions: not just textbooks and testing, but software-based learning delivery platforms, much like what Apple unveiled Thursday with iTunes U. They invest in highly interactive platform-specific apps like Inkling, and basic, cross-platform e-textbook standards like CourseSmart. And they invest in Apple.

Their giant size and reach throughout the education and media landscape gives these publishers advantages and disadvantage. One disadvantage: they move slowly. One big advantage: You cannot outflank them.

For us to remain competitive, we need to focus on our product, price, distribution and promotion. We need to ensure that our product is at least of industry quality standard, and is available at a cheaper price. Further, we need to directly interact with professors and students to make them realise importance of our idea, and that they should recommend our books to fellow students/ professors.