marketing environment, competition, industry structure, Porters 5 forces model
Review the activity below or download the PDF student worksheet
- Student Worksheet: Using Porter’s Five-forces Model
- Instructor Solutions (Members Only): Using Porter’s Five-forces Model = Solutions
Student Discussion Activity
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
- Assess the book publishing industry using Porter’s Five-forces model.
- What key insights have you gained by assessing this industry using this structured model?
- Therefore, what is your overall assessment of the attractiveness of the industry?
- How could a firm use Porter’s Five-forces model in their strategy and planning activities?