SUBJECT: BUSINESS POLICY AND STRATEGY CASE STUDY On March 14, 2000, Stephen King
ID: 372463 • Letter: S
Question
SUBJECT: BUSINESS POLICY AND STRATEGY
CASE STUDY
On March 14, 2000, Stephen King, the prolific horror writer, published his new book, Riding the Bullet, on the Internet before it appeared in print. Within 24 hours, almost 400,000 people had downloaded he book –even though most of them needed to download software in order to read the book. The unexpected demand crashed servers. According to Jack Romanos, president of Simon & Schuster, “I don’t think anybody could have anticipated how many people were cut there who are willing to accept the written world in a paperless format. “ To many, this announced the coming of the electronic novel. Environmentalists were thrilled that e-books might soon replace paper books and newspapers, thus reducing pollution coming from paper mills and landfills. The king book was easy to downloaded and look less time than a trip to the bookstore, Crities argued that the King book used the Internet purposely because at 66 pages, it was too short to be a standard printed novel. It was also free, so there was nothing to discourage natural curiosity. Some people in the industry estimated that 75% of those who downloaded the book did not read it.
By 2008, Harper Collins and Random House were offering free online book content. Amazon was selling a US$399 Kindle e-book reader for downloadable books costing US$10each, but Apple CEO Steve Jobs described the Kindle as something that filled no void and would “go nowhere”. Sales in electronic trade books increased from US$5.8 million in 2002 to US$ 20 million in 2006 to US$380 million by 2012.
By 2012, the market for e-books accounted for more than 25% of all revenues in the book selling industry and e-book sales had surpassed sales of hardback books.
Amazon went on to release numerous versions of the Kindle reader ranging from US$69 to US$499. Amazon steadfastly refused to release sales figures for the Kindle, however, Forrester (a research firm) estimated that sales of the Kindle Fire (Its flagship product) had exceeded 5 million between its release in November 2011 and Christmas that same year. Far from going nowhere, the Kindle family was clearly a player in the Industry.
One of the lightly touched parts of the market is college textbooks. No individual area in the filed of publishing seems as good a fit as asking student to buy an e-reader and then down load all the material they will need for all of their courses. Rentals and outright purchases would represent a substantial change.
DISCUSSION QUESTIONS
Q. 1 Identify the problems associated with long term strategy plan and how your team over come these problems ( 10 Marks)
Q. 2 .Present your groups conclusion and suggestion to the case ( 10 Marks)
LIQUIDITY RATIOS Cash & Marketable Securities to Total Assets Acid Test Ratio Current ratio (Cash + Market Securities)/ Total Assets = (Cash + Market Securities + Receivables) / Current Liabilities Current AssesCurrent Liabilities ASSET MANAGEMEN Days Receivable Day's Inventory Asset Turnover = 365/ (Sales / Receivables) = 365, (Cost of Sales / Inventory) = Sales / Total Assets FINANCIAL LEVERAGE Long-term Debt to Total Assets = (Convertible Debt Long-term Debt + Non-current Capital LeaseOther Long-term Liabilities) /Total Assets = (Convertible Debt + Long-term Debt + Non-current leases + Long-term Debt to Stockholders' Equity Other Long-term Liabilities) /Stockholders Equity Coverage Ratio (Income Before Taxes+ Interest Expense) / Interest Expense PROFITABILITY Gross Margin Ratio Return on Sales Return on Assets (1) Return on Assets (2) Return on Equity -Gross Profit/Sales Net income />ales = Net Income / Total Assets (Net Income + Interest Expense)/ Total Assets Net Income / Stockholders' Equity DUPONT ANALYSIS Return on Equity Return on Sales . Asset Turnover . Leverage = (Net Income / Sales) x (Sales / Assets) x (Assets / Stockholders'Ety)Explanation / Answer
1: In the current era of technology everything is e- value based product. The conservative model of hard copies getting diminished on many categories as per the case study itself. Long term strategy related to e-book has a major concern of data capability , storage and security. It is easy to plgarise the contents in e-book and can be used for other purpose compared to hard copy. Thus long term strategy should comprises of
Coming to text book segment for college and school student it need more focus as the availability of proper gadget to read the content and it requires change manegement to change the concept of regular paper text book to the e-copies. There is a lot of scope in this particular segment.
2: Conclusion:
E-copy will definetely reduce the overall cost of processing the text book or whatever kind of books. It is more eco friendly and it is more simple to use. It can save a lot of space in storage of books, natural contamination of books can also be avoided . At the same time educational text books required unique focus which comprises of change management to incorporate all the current concerns in transformation. Reach of e-book and the usage capability would be the point of concern and misue of data is another issues. Psychologically also our pedagogy needs to change from the conventional rythm to e- book format.
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