HomeResearch & Knowledgeback to HomeStrategyback to Research & KnowledgeAmazon is disrupting the book market, but differently than you might thinkback to Strategy

Case Study

Amazon is disrupting the book market, but differently than you might think

By Stefan Michel, Marat Korovaev, Alexey Kozak, Elzbieta Rzepnicka and Peter Seres

16 pages

March 2022

Order this case study

Reference: IMD-7-2297

Michael Omer, an Israeli writer, was unsuccessful in getting his fantasy books published by traditional publishers in his home market. In the meantime, Amazon entered the market and then, in 2007, launched its e-book strategy with Kindle e-reader, Kindle Store and the Kindle Direct Publishing (KDP) platform. With these features it aimed to provide as many books to as many readers as possible, with the e-book price capped at $9.99. This move triggered confrontations with traditional publishers and opened the way to competitors like Apple. Ultimately, Amazon had to give up by accepting the new agency model, designed by Apple, and returning control over prices to publishers. At the same time, Amazon tried to hold leadership in the book and e-book market by decreasing the price of e-readers, issuing free reader applications, improving terms for self-publishers in KDP, introducing a new subscription model for readers, and establishing publishing units. Amazon was blamed for decreasing a book’s value; but it was also praised for destroying the hegemony of publishers. Mike had to learn how to promote his own books in the self-publishing ecosystem and how to approach other genres. In the end, he became one of the best-selling writers at Amazon KDP, with a mystery book that sold more than 100,000 copies. Success in KDP helped Mike establish a good relationship with Thomas & Mercer, one of Amazon’s proprietary publishers, and to achieve even greater success in both written and audiobooks.

Learning Objective

Understand the value of traditional and electronic books; the traditional and self-publishing book publishing process; and how KDP creates value via concepts such as customer journey, value constellation, value-based marketing and attributes-benefits-values
Insights into pricing, price elasticity and price discrimination can be gained by analyzing the price war between Amazon and traditional publishers
Gain and understanding of a digital platform

Keywords

Kindle Direct Publishing, Kindle, Apple, Self-publishing, eBook, Audiobook, Publishing, Ecosystem, Pricing, Agency Theory, Most Favoured Nation, Subscription Model, Strategy, Marketing, Disruption

Settings

Amazon, Thomas and Mercer, Media, Printing and Publishing
1994 – 2020

Type

Published Sources

Available Languages

English

IMD case studies are distributed through case clearing houses. In order to browse the collection and purchase copies please visit the links below.

The Case Centre

Cranfield University

Wharley End Beds MK43 0JR, UK
Tel +44 (0)1234 750903
Email [email protected]

Harvard Business School Publishing

60 Harvard Way, Boston MA 02163, USA
Tel (800) 545-7685 Tel (617)-783-7600
Fax (617) 783-7666
Email [email protected]

Asia Pacific Case Center

NUCB Business School

1-3-1 Nishiki Naka
Nagoya Aichi, Japan 460-0003
Tel +81 52 20 38 111
Email [email protected]

IMD retains all proprietary interests in its case studies and notes. Without prior written permission, IMD cases and notes may not be reproduced, used, translated, included in books or other publications, distributed in any form or by any means, stored in a database or in other retrieval systems. For additional copyright information related to case studies, please contact Case Services.

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Keep reading

Case Study

Entrepreneurship through acquisition: Sébastien Perroud and the IAR Group

Entrepreneurship Finance Strategy

By Benoit F. Leleux, Dominik Hanslin, Iuliia Mordacheva, Matthias Rey and Frank Schuster

Article

How to lead if you inherit a bad situation

As businesses navigate market disruptions, technological innovations and an increasingly turbulent world, leaders will frequently find themselves taking control of a team in the aftermath of a crisis. Inheriting such a challenging environment ofte...

Leadership Disruption Crisis Management

By Michael D. Watkins

in The European Business Review

17 November 2024

Article

How emotional intelligence is the best defence against GenAI threats

Emotional intelligence is essential for recognizing and managing artificial intelligence (AI) enabled manipulation, especially in scams. Organizations should train employees to spot emotional triggers and practice reflection to mitigate generative...

Artificial Intelligence Disruption Organizational Behavior

By Öykü Işık

in WEF Forum

15 November 2024

Case Study

Mastercard 2023: Rewired for infinite optionality

Disruption Digital Strategy

By Howard H. Yu, Mark J. Greeven and Martin Králik

Article

Management myth-busters: Does culture really eat strategy for breakfast?

Culture eats strategy for breakfast is one of the most enduring truisms of management. But is it really the case? And what is culture anyway?

Organizational Culture Strategy

By Michael R. Wade

in I by IMD

8 November 2024

Article

Drei Ideen, um die Kostenexplosion im Gesundheitswesen wirklich zu dämpfen

The total costs of the Swiss healthcare system are rapidly approaching the CHF 100 billion mark per year. Now Switzerland is voting on November 24 on a further reform step. But that will not be enough. New ideas are needed.

Strategy Change Management Disruption

By Alix Rey and Romain de Luze

in NZZamSonntag

31 October 2024

Article

Can Nike’s new chief executive restore the soul of "the swoosh"?

When John Donahoe stepped in as Nike's chief executive in January 2020, two months before the Covid-19 pandemic struck, the appointment looked like a masterstroke. His background in Silicon Valley, having served as chief executive of eBay and chai...

Change Management Leadership Disruption Business Transformation

By Howard H. Yu

in The National

23 October 2024

Article

Marketing to women: Four tips for avoiding pitfalls

More than 80% of purchases are made by women. But reaching, interacting with, and converting female consumers is a challenge for most companies. You can get through the maze of marketing to women by using these four guidelines.

Marketing

By Jenny Darroch

in I by IMD

17 October 2024

Article

I launched the AI safety clock. Here’s what it tells us about existential risks

f uncontrolled artificial general intelligence—or “God-like” AI—is looming on the horizon, we are now about halfway there. Every day, the clock ticks closer to a potential doomsday scenario. That’s why I introduced the AI Safety Clock last month. ...

Artificial Intelligence Technology Management Disruption

By Michael R. Wade

in Time

13 October 2024

Article

Strategy stack: An integrated approach to decision-making

The ways popular frameworks are used fall short in today’s rapidly changing environment. Here is a new way to make better-informed strategic choices.

Change Management Competitiveness Decision Making Innovation Strategy

By Albrecht Enders, Ajay K. Kohli, Andreas König and Arnaud Chevallier

in I by IMD

Entrepreneurship through acquisition: Sébastien Perroud and the IAR Group

By Benoit F. Leleux Dominik Hanslin Iuliia Mordacheva Matthias Rey and Frank Schuster
Case reference: IMD-7-2515 ©2024

Summary

GENEVA (SWITZERLAND), AUGUST 2021. There was a lot at stake for Sébastien. This was the culmination of his 18-month NCA supported search journey to find a company to acquire. Instead of a single target, he was now faced with the prospect of acquiring 4 separate companies at once, consolidating them into a group. One, SAS, was bigger than the others but also faced significant financial issues. Hopefully he had identified three additional companies as acquisition targets, all profitable and with low levels of debt but individually a bit too small. Should he pursue all three as a single deal or add SAS for a four-company deal? In a last-ditch effort to figure out the best deal configuration, he ran some simulations about the potential returns of the group with and without the SAS turnaround. With those projections in hand, it was time to finalize the management buy-in proposal to present to the investment committee the following week.

Reference IMD-7-2515

Organization IAR Group

Industry Finance and Insurance, Private Equity

Available Languages English

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Entrepreneurship

Finance

Strategy

Browse all topics

How to lead if you inherit a bad situation

By Michael D. Watkins
in The European Business Review 17 November 2024

Summary

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Leadership

Disruption

Crisis Management

Browse all topics

How emotional intelligence is the best defence against GenAI threats

By Öykü Işık
in WEF Forum 15 November 2024

Summary

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Artificial Intelligence

Disruption

Organizational Behavior

Browse all topics

Mastercard 2023: Rewired for infinite optionality

By Howard H. Yu Mark J. Greeven and Martin Králik
Case reference: IMD-7-2455 ©2024

Summary

In the 2010s, card processing – Mastercard’s flagship service – started showing signs of commodification as new, nimble players (typically, fintech startups thriving on digital) entered the payment processing space, and customer preferences evolved beyond plastic cards and traditional contact payments. To re-energize its central position and its ability to capture value, Mastercard – as the incumbent – had to make bold decisions. The case details Mastercard’s approach to conceptualizing and building a global platform ecosystem that upholds the principles and design elements of modularity (i.e. interoperability and scalability) and optionality. Today, Mastercard's services, based on application programming interfaces (APIs), integrate with a variety of platforms and offer flexibility to businesses that require customized payment solutions. All along, the company has accommodated a high level of internal disruption. The case also explores the nature of Mastercard’s systematic collaboration with fintechs – players that often started out as competitors in specific parts of Mastercard’s value chain. It describes the company’s engagement with fintechs as fostering collaboration and co-creation and facilitating access; in other words, opening doors and sharing tools with partners. The case presents observations and quotes by CEO Michael Miebach, whose career trajectory at Mastercard – spanning Africa & Middle East experience, fintech partnerships, product management and the CEO role – sheds additional light on the philosophy and values that have driven the company’s transformation to a technology powerhouse and self-described original fintech.

Reference IMD-7-2455

Organization Mastercard

Industry Finance and Insurance, Financial Services

Available Languages English

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Disruption

Digital

Strategy

Browse all topics