The Power of Buyers in the Publishing Industry

In: Business and Management

Submitted By cappy2354
Words 507
Pages 3
Over the last twenty years and with all the changes in technology, buyers bargaining power has increased greatly. With the emergence of companies like Amazon.com and online stores like Half Price Books.com (where you can buy school books or any book) university book stores and big chain stores now have to compete buy price. Stores like Barnes & Noble have to compete buy price because now-a-days all you have to do is do a Google search of whatever book you what to buy and the search will come up with thousands of hits of people wanting to sell you that book. Also with devices like the kindle, and iPad, readers can buy eBooks and download them rite to that device for a discounted price. Stores that have already adopted the new way of buying and reading books such as Amazon will survive a downfall in actual published books because there philosophy has always been online and competitive. Barnes & Noble over the last few years has started to do more on-line sales and they specialize in sales of eBooks for the Nook, which Barnes & Noble came up with to compete with other e-readers.
There are two types of buyer power. The first is related to the customer’s price sensitivity. If each brand of a product is similar to all the others, then the buyer will base the purchase decision mainly on price. This will increase the competitive rivalry, resulting in lower prices, and lower profitability.
The other type of buyer power relates to negotiating power. Larger buyers like Barnes & Noble tend to have more leverage with the firm, and can negotiate lower prices. When there are many small buyers of a product, all other things remaining equal, the company supplying the product will have higher prices and higher margins. If a company sells to a few large buyers, those buyers will have significant leverage to negotiate better pricing.
Some factors affecting buyer power…...

Similar Documents

Buyer Power

...High Buyer Power - Large number of customers o What are our desired customer characteristics? What is our theme? o Loyal customer base o Reputation as a place out-of-towners need to visit. Cater to student and prospective student families and out of town fans attending WFU sporting events. - Small differences between competitors o Try to reduce buyer power through distinctiveness. o Try to differentiate with excellent, super-friendly service. Use fresh and highest quality ingredients. Have both standard and special menu items. Good selection of healthy offerings. Include two-three seasonal or specialty type items on menu every day. Include at least one super-healthy offering on the lunch and dinner menus. o Donate unsold, prepared food to food kitchens. - High sensitivity of price means that it’s difficult to charge high prices due to many competitors. o Price in middle-high-end ranges. o Offer at least a fewer lower-cost offerings so as to not completely limit our clientele. - High availability of substitute products o All kinds of restaurants, bars and coffee shops. o Energy drinks, soda, home brews.  Develop our own branded coffee for the brew-at-home market. - Switching costs o Frequent buyer program. o Daily specials. Special of the day. o Free coffee refills all day. Do not need to save cup or receipt, just use loyalty card as it will store necessary qualifying purchase. o Position ourselves in a unique way to add value to the experience so that...

Words: 615 - Pages: 3

Challenges in the Publishing Industry

...Progress Report 2: The Challenges in the Publishing Industry A. We have chosen to cover the issue of the challenges in the publishing industry. First we will examine what is copyright law and how it encourages the creation of published works while limiting the accessibility to those works. In fact, copyright laws protect artists from having their works stolen or copied and sold for lower costs, and therefore guarantee them certain revenue. The monetary incentive increases the creation of music, movies and literature. However, those same laws limit the accessibility to these works. People who don’t have means to pay for entertainment and cultural works are deprived from it. In the field of education, author copyrights may sometimes get in the way of the learning process. It comes back to the question: should access to cultural works be free for all to access or should it be a consumer good? B. We want to interview a range of different people with different views about the subject. We will ask questions to one university professor and one Cegep literature teacher, to one young musician, to four university students, to four people from 25 to 40 years old and to four people from 40 years old and up. The questions we will ask them: 1. Describe what you think Copyright Law is? 2. Do you think it is normal to pay for a) music, b) movies and c) literature works? Why do you think so? 3. Do you think artists should get paid for what they actually do (create cultural works)......

Words: 1151 - Pages: 5

Buyer Power

...1) Buyer power is high when the buyers have many choices of whom to buy and low when there are few choices. 2) Supplier power is high when the buyers have few choices of whom to buy and low when there are a lot of choices for buyers. 3) threat of substitutes products is high when there are many alternatives to this product and low when there are few alternatives for this product or service. 4) threat of new entrants is high when it is easy for new competitors to enter the market and low when there are significant entry barriers to enter the market. 5) Rivalry among existing competitors is high when the competition is fierce in a market and low when the competition is complacent. 2) Example: Bookshop: The buyer power is high because the buyers have many choices of whom to buy like City Lights and Strand bookshops. In order to have competitive advantage the bookstore should offer loyalty programs to their programs such as “the 5th book is free”, “10% discount for purchased 20 books”. Supplier power is low because the buyers have a lot of choices to shop in different shops. Threat of substitute products or services is high because you can order books online. In order to have competitive advantages I would try to use switching cost. I would offer my customers to order their books through the telephone or mail so I will deliver them the book free without any additional cost. Threat of new entrants is high because it is easy for new competitors to open a shop. It does not...

Words: 506 - Pages: 3

Bargaining Power of Buyers

...1.1 Executive Summary Green Paradise Budget Hotel operates in 90, JalanPetaling, 50000, Kuala Lumpur. As a new entrant in budget hotel industry, Green Paradise is selling its brand new Go Green Concept to the customer. Customer can gain new experience and enjoy affordable price in Green Paradise Budget Hotel. In the first year, Green Paradise may suffer loss for the budget hotel’s expenses. Green Paradise Budget Hotel will gain back net profile of RM 200,000 in the second year. Green Paradise Budget Hotel estimated to be at least 15% net profit and revenue increase in the following years. Green Paradise Budget Hotel will develop some marketing strategies to gain the sales target. First of all, the company will advertise through newspaper, social networks such as Facebook and Twitter to raise the popularity and sales. The company website will also be created for customer convenience. The customer can check the rate of room through the website and others related information. The company will gain customer loyalty and satisfaction. Green Paradise Budget Hotel is limited company owned by 5 persons. They are Chia Pei Jing, Choo Yee Ying, Tan Chu Xin, Lim Shee Wei and Chai TeikJian. The company will apply RM 350 000 business loan from bank for the financial sources of the company. The 60% of the capital will be used for buying equipment, renovation, facilities and others. Besides, 40% of the capital will be used for the marketing expenses and also to run the company daily......

Words: 4404 - Pages: 18

Will Technology Save the Publishing Industry

...Assignment 1: Will Technology Save the Publishing Industry? 1. Evaluate the impact of the Internet on newspaper and book publishers using the value chain and competitive forces models. In the past, Internet has had a negative effect on all publishing, including both the newspaper and book industries. Publishing companies have experienced a decline in advertising revenues, circulation, and readership while Internet traffic to online news sites and readership of e-books has grown rapidly (1). Many blame the newspaper and publishing companies themselves, expressing a defect in the companies’ value chain and competitive force models as they relate to the Internet. According to Michael Porter’s value chain model, a company must perform each business activity in the model in the most efficient way possible in order to add value to the company, i.e. maximize shareholder wealth and sustain a competitive advantage (2). Value-adding activities that are vital to the company according to the model are inbound logistics, operations, outbound logistics, marketing and sales, and service. The infrastructure of the company, human resource management, technology development, and procurement are all supporting activities that must be performed efficiently as well (3). In the past, newspaper and book publishing companies have failed at performing these value-adding activities efficiently, leading to minuscule profit margins. Simply put, these companies failed to offer a level of......

Words: 1170 - Pages: 5

Case Study 3: Will Technology Save the Publishing Industry

...12 January 2014 Case Study 3: Will Technology Save the Publishing Industry? 1. The Internet has had a significant impact on newspapers. The development of online communication has led to important transformations at an organizational level. The internet has involved changes in access, production and circulation of information. These changes are distinguished by the speed with which news reaches the reader, the low cost of distributing information and the opportunity to establish more direct contact and interaction with its users. Because information is available to everyone, the Internet raises the bargaining power of customers, who can quickly find the lowest-cost provider on the web. The internet also raises the bargaining power over suppliers by reducing the barriers to entry and from the elimination of distributors and other brokers that stand between them and their users. The same reduction of barriers that increase the bargaining power of customers also increases the threat of new competition by eliminating or reducing the need for a sales force and many physical assets that might have inhibited the entry of new business that could pose a threat. With a reduction in the differences between existing companies, the number of competitor’s increases, the geographic market widens making it more difficult to sustain operational advantages and puts pressure to compete on price with rivaling competition. Internet technology is based on universal standards that any company can...

Words: 411 - Pages: 2

Book Publishing Industry

...Assignment 1 The book publishing industry is rapidly changing. Gone are the days of brick and mortar book stores. People desire the fast paced changing world that technology has created. Technology has led to a total and complete transformation of the way books are sold. This new phenomena is known as the electronic book. The electronic book or eBook allows users to download their favorite book right to there handheld reader. These readers take the form of dedicated eBook devices such as the Kindle or fully integrated digital media devices such as the IPad. These downloads are relatively inexpensive compared to buying the printed book version. Also, as technology progresses and the market becomes more saturated the price of the readers will fall even lower than their already relatively affordable prices. Does this new form of media have enough to overtake its predecessor of the printed book? The introduction of this near perfect sounding new media is facing some resistance. This resistance is coming for the publishers that produce the material in the first place. They are fighting to keep the old business model of printed books alive. This struggle is similar to that of the music industry. The once striving music industry is now crumbled due to the introduction of online music downloads. Most of this is due to illegal music sharing, but it is also attributable to the pricing of the songs. Publishers fear that this will have the same effect on the book industry. There......

Words: 1391 - Pages: 6

Will Technology Save the Publishing Industry?

...The publishing industry is grappling with disruptive technologies that may transform its business models and the way we buy and read books. What is the impact of the Internet and e-book technology on book and newspaper publishing? Who will win and who will lose out, and how will the struggle play out? Newspapers are the most troubled segment of the publishing industry, due to the availability of alternatives to the printed newspaper and publishers' inability to protect valuable content from being distributed for free over the Internet. Over 60 percent of newspapers have reduced news staff in the past three years and about the same percentage report reducing the size of their newspapers. Readership has been declining for about a decade and advertising is down 15 percent a year. Alternative online sources of news such as Yahoo, Google, and blogs have become major sources of news for many Americans, especially younger readers. At first glance, the online newspaper industry appears to be a classic case of a disruptive technology destroying a traditional business model based on physical products and physical distribution. But the newspapers have much valuable content worth preserving and they have acquired a huge online audience. Next to social networks, newspapers have the largest online audience of any media, and online newspaper readership is growing by 17 percent each year. Contrary to popular opinion, they are one of the most successful forms of online content to date.......

Words: 1887 - Pages: 8

Bargaining Power of Buyers

...bargaining power of buyers - relatively low power for buyer, since oly few players in the market the buyer has less control over the products, the demand is more and the supply is less. Even now in most of the countries printing play a vital role in the education industry where the printed industry has its control over the buyer. bargaining power of suppliers - moderate influence of suppliers, suppliers who provide the raw materials for the printing industry such as paper pulp, dyes. These suppliers have a moderate control over the industry since there is quite a few number of industries which supplies these materials. Rivalry within d industry - high degree of competition, every nation has several giants in printing industry either in media or the vice versa, hence to catch hold of the market share each player offer prices as low as possible by adopting several cost cutting methods and adopting several innovative methods. Hence innovation is in a continous drive in printing industry threat of new entrants - relatively low, less small scale industry since huge investment is reqd, existing players are of king size,very attractive component for companies who can overcome the barriers because of the excellent stability presented but poses a significant problem for potential entrants. threat of substitute products - there is a great threat from substitute products. Hence constant innovation is required. Tv, internet and ebook readers are the potential threats in......

Words: 272 - Pages: 2

Power Shifts: the Digital Era and Publishing

... Power Shifts: The Digital Era and Publishing Power Shifts: The Digital Era and Publishing | University of South Carolina | University of South Carolina 2014 2014 Introduction The digital era has led to a slew of technological changes that are drastically changing the norms of the publishing industry which in turn impacts our literary culture. While attempting to avoid a techno-determinist argument this paper attempts to examine the manner in emerging technologies have shaped the publishing industry. The initial focus on the areas of the publishing industry that are most affected by the changes in technology and then examining how these changes ripple through the industry and eventually to methods used by publishers to adapt to the change. The initial focus is one consumer behavior and how it is affected by new technologies then there is a shift to how this shift effects the supply chain that was previously in use and the ways in which the publishing model has been changed. Traditional publisher are then examined to understand how the industry as whole can effectively manage the changes. Finally trends that are currently being implemented as well as the changing demographics and their demands are discussed in order to bring the conversation full circle. Consumers When looking at consumer behavior and how it has been shaped by the innovations of the last 20 years a psychology based perspective is important. Technology has not drastically changed consumer......

Words: 3736 - Pages: 15

The Bargaining Power of Suppliers and Buyers

...Poter’s five forces 1, the bargaining power of suppliers Haidilao Pot has its own four large modern logistics center and a raw material production base, it uses Backward Integration Strategy on its raw material, the company is a large enterprise with national chains in China, the need for raw materials is large, enhance their ability to bargain, recently some vegetables (cabbage, etc. ) oversupply, causing prices to fall, this is good for the company’s business; Shuanghui clenbuterol issue regulations require companies to make safety requirements for food, meat supply is under attack, but also good for the company’s business. It means suppliers has low influence on the company. 2, the bargaining power of buyers Haidilao’s guiding strategy is service differentiation, maximum to meet customers’rationalize requirements. In Haidilao, even waiting for seats can be enjoyable. There are different drinks and kinds of chess on the desk, newest play cards aside and services like nail care for women and shoe care for men available all the time. During dining, you are provided frequently with warm hand towels, a pinafore with ethnic feature, hair string for girls, glass cloth in case that the drop splits to your glasses and a small plastic bag to put your big screen cell phone in. Every waiter and waitress has the right to give you a free meal in particular situation. These uncommon attributes attract more and more interest. On the products, the company will......

Words: 254 - Pages: 2

Bargaining Power of Buyers

...Bargaining Power of Buyers The existence of influential buyers lessens the profit potential in any given industry. They fuel competition by decreasing prices, bargaining for better quality or more services and playing rivalries opposed to other market giants. The consequences include diminished trade profitability. The bargaining power of buyers involves one of Porter’s five forces which regulate the intensity of an industry. The rest includes; Barriers to entry, industry rivalry, threat of substitutes and the bargaining power of suppliers. The influence of an industry‘s significant buyer groups are determined by: * Relatedness to market situation characteristics * The relative significance of trade from industry as measured against the overall business Below conditions conclude the powerful nature of a buyer group: * The buyer is either concentrated or purchases large quantities * Products obtained from the industry represent a noteworthy percentage of the purchases or the costs of the buyer * Purchased products are undifferentiated or standard- substitutes are easy to find as the competition is tough * Switching costs are very low * The backward integration threat is high * Buyers are price sensitive * Buyer possess necessary information ( they are fully aware about the market prices and supplier costs) Product differentiation is one of the conditions that affect the power of buyers. Chocolate is regarded as a standard product......

Words: 491 - Pages: 2

Power Industry

...History of the Power Industry Power is so readily available and convenient these days that we do not often think about how these modern day necessity came to be. The electric power industry, in the United States, was started by Thomas Edison in the 1880s. Prior to that, there were small systems being sold to industrial companies to power factories but electricity has not yet been distributed. In the early years of the power industry, it was led by Thomas Edison, Charles Brush and Werner von Siemens, who were creating direct current systems to provide power. The first power station in the United States was called the Pearl Street Station and it serviced roughly 80 customers in the Manhattan area of New York. This is an extremely small number compared to the billions of people that use electricity today. Thomas Edison’s Pearl Street Station was originally started to be able to provide electricity to his new invention, the light bulb. The early direct current systems worked great for supplying electricity to places within one mile of the power supply but people wanted to send power over long distances. In order to send DC power long distances, it had to be sent at a very high voltage. This led to the HVDC method which allowed the power to travel longer distance. The HVDC method was short-lived and in in the late 1880s and early 1890s alternating current came out. AC power was engineered by Oliver Shallenberger of Westinghouse and is much more versatile than direct...

Words: 433 - Pages: 2

Power of Buyers-Si Project.

...Power of Buyers * price sensitivity * No brand identity, customer more care about price rather than which drug store to buy * No bargaining leverage * buyer volume * No buyer switching costs, same drug they can buy at any drug store * product differences * No brand identity, costomer more care about price rather than which drug store to buy *  Many key players are acquiring small stores, industry concentration Advanced 5 forces Analysis * Population aging * As the population ages, demand for pharmaceutical products to address health ailments, such as chronic illnesses, typically rises. * According to data from the Centers for Disease Control and Prevention, an estimated 89.7% of individuals aged 65 and older used a prescription drug during a 30-day period between 2009 and 2012 (latest data available). As a result, the industry benefits from strong need-based demand for prescription drugs from this age demographic. In 2015, the number of adults aged 65 and older is expected to increase. * External competition for the Pharmacies and Drug Stores industry * Pharmacies and drug stores face mounting competition from mass merchandisers (e.g. discount stores, supercenters and warehouse clubs), mail-order prescription providers, online pharmacies, convenience stores, wholesalers (e.g. Costco) and health clinics. Due to intensifying competition, the industry will contend with many external competitors cutting into consumer demand...

Words: 542 - Pages: 3

The Threat of Online Publications to the Traditional Publishing Industry

...decrementing those owned by their offline competition. Given their inferiority in cost, channeling, and time-to-market, how do traditional publishers stay in business? In the same way opposing forces in nature result in a state of equilibrium, there is a single overarching mechanism in the publishing industry that is designed to buffer short-term market gains and resist long-term change. This built-in mechanism in the media business consists of a multitude of socioeconomic factors. We will first explore the economics behind the publishing industry, which includes the horizontal integration of ownership and realizing specific market segmentation, such as textbooks. Then, we will scrutinize the social implications such as conventions, content censorship, and government regulation, and finally, delve in on a specific case of value-added books. In assessing the economics of the media business, it is helpful to first examine the ways in which publishing companies are owned and financed. Broadly speaking, media systems can be owned by the state, by private corporations, or by a mixture of both, all of which are financed through advertising (McCullagh 75). As with any other business, the publishing industry is profit-oriented, and the premise for all strategies deployed and actions taken is ultimately a means to achieve financial rewards. Many major national periodicals and magazines have developed web versions in the past two to three years, a move that helps strengthen......

Words: 2300 - Pages: 10

Neformálny Pevný Dlhý rukáv Dĺžka po kolená Šaty | cleanMyMac | The Last Ship 2. Sezon