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A writers dream, a readers paradise

Marketing Plan for Scribd


Submitted by: Team 2 Marketing Strategy & Management Portland State University Summer 2009 > > > > > > > Stacy Butchart Liam Flaherty Kurt McDonald Jason Rippy Bianca Shedd Kinero Tan Jaclyn Tiedemann

Table of Contents
TABLE OF FIGURES......................................................................................................................6 LIST OF TABLES ...........................................................................................................................6 LIST OF EXHIBITS ........................................................................................................................6 1. EXEcUTIvE SUMMARy ............................................................................................................4
Market Opportunity ..................................................................................................................... 4 company Overview ..................................................................................................................... 4 competitive Assessment ............................................................................................................ 5 competitive Advantage............................................................................................................... 5 Net Assessment .......................................................................................................................... 5 Internal SWOT ....................................................................................................................... 5 External SWOT....................................................................................................................... 6

2. BUSINESS OvERvIEw .............................................................................................................. 6


The Business Opportunity Scribds Big Idea ......................................................................... 6 company Overview ..................................................................................................................... 7 Products and Services ................................................................................................................ 8 Product Description................................................................................................................ 8 Value Proposition ................................................................................................................. 10 Brand Identity ...................................................................................................................... 13 Brand Identity Promotion ...................................................................................................... 13 Strengths and Weaknesses .................................................................................................. 14 conclusions ............................................................................................................................... 14

3. TEcHNOLOGy ASSESSMENT................................................................................................ 14
Formal Product Description ...................................................................................................... 14 Product Technology .................................................................................................................. 15 Product Platform ....................................................................................................................... 16 competing Technologies .......................................................................................................... 17 Amazon Kindle ..................................................................................................................... 17 Docstoc ............................................................................................................................... 18 Technology Partners ................................................................................................................. 18 FAB Analysis and Comparative Assessment ......................................................................... 18 Cost Factors / Drivers........................................................................................................... 19 Technology Life Cycle ........................................................................................................... 19 Product Life Cycle ................................................................................................................ 19 Evaluate Potential Disruptive Technologies ............................................................................. 19 conclusions ............................................................................................................................... 19

4. MARKET ANALySIS ............................................................................................................... 20


Potential Market Segments ...................................................................................................... 20 Segmentation Analysis ............................................................................................................. 21 Customer Profiles ................................................................................................................. 21 value Drivers.............................................................................................................................. 23 Product Value Drivers ........................................................................................................... 23 Customer Value Drivers ........................................................................................................ 23 Segment Comparison and Contrast...................................................................................... 24 Segment Attractiveness ............................................................................................................ 25 Market Potential ........................................................................................................................ 26 Market Access........................................................................................................................... 27 Maximum Opportunity .............................................................................................................. 27 Target Market ............................................................................................................................ 28 Potential New Markets .............................................................................................................. 28 conclusions ............................................................................................................................... 28 1

Table of Contents, contd


5. cOMPETITOR ANALySIS........................................................................................................ 29
Industry dynamics. .................................................................................................................... 29 Porter model ........................................................................................................................ 29 Existing Industry Competition ............................................................................................... 30 Threat of Potential Entrants .................................................................................................. 30 Threat of Substitute Products ............................................................................................... 30 Bargaining Power of Customers ........................................................................................... 31 Bargaining Power of Suppliers .............................................................................................. 31 Porters Five Future Forces ................................................................................................... 31 Sources of competitive advantage ........................................................................................ 32 Competitive barriers ............................................................................................................. 33 Consolidation ....................................................................................................................... 33 Partnership/Alliances ............................................................................................................ 34 value chain ................................................................................................................................ 34 Business ecosystem ................................................................................................................. 34 competitive Factors Mapping .................................................................................................. 34 Key Competitive Factors and Strategy Canvas ..................................................................... 34 conclusions from Strategy canvas .......................................................................................... 38 competitive Profiles .................................................................................................................. 38 Amazon ............................................................................................................................... 38 Docstoc ............................................................................................................................... 39 conclusions (Company Strategy, Brand Position, Growth Strategy, and Market Strategy) ...................... 40 Disruptive Potential ................................................................................................................... 40 competitive Benchmarks.......................................................................................................... 40 Best in Class ............................................................................................................................... 40 Competitive Gaps ....................................................................................................................... 41 conclusions ............................................................................................................................... 42

6. NET ASSESSMENT ................................................................................................................. 43


SwOT Analysis .......................................................................................................................... 43 Strengths ............................................................................................................................. 45 Weaknesses ......................................................................................................................... 45 Opportunities ....................................................................................................................... 46 Threats................................................................................................................................. 46 critical Factors ......................................................................................................................... 46 Risk Factors ......................................................................................................................... 47 Success Factors ................................................................................................................. 48 MOA cONcLUSION ................................................................................................................. 50

7. MARKETING STRATEGy ........................................................................................................ 51


Strategy Platform .................................................................................................................... 51 Marketing Plan Objectives ........................................................................................................ 51 Marketing Objectives Dashboard ............................................................................................. 52 Growth Strategy ....................................................................................................................... 52 Blue Ocean Strategy ............................................................................................................ 53 Ansoff Matrix ........................................................................................................................ 53 Strategy Recommendations ..................................................................................................... 54 Market Leadership ................................................................................................................... 56 Positioning Strategy ................................................................................................................. 58 Desired Market Position ........................................................................................................... 58 Key Value Drivers ................................................................................................................ 59 Branding Strategy ..................................................................................................................... 60 Transition to 4 Ps ................................................................................................................. 61

Table of Contents, contd


Product Plan ............................................................................................................................ 62 Product Objectives .............................................................................................................. 62 Product Life Cycle ................................................................................................................ 62 Product Strategy ................................................................................................................ 62 Product Cost Model ............................................................................................................ 64 Product Launch Issues & Timeline ...................................................................................... 65 Sales and Distribution Plan....................................................................................................... 66 Sales and distribution objectives. .......................................................................................... 66 Sales strategy ...................................................................................................................... 66 Channel strategy ................................................................................................................. 68

Promotion Plan ............................................................................................................... 69


Promotion Plan Objectives ................................................................................................... 70 Promotion Theme ............................................................................................................... 71 Campaign Plan..................................................................................................................... 72 Schedule and Timeline ......................................................................................................... 73 Pricing Plan ............................................................................................................................... 75 Pricing Objectives................................................................................................................. 76 Pricing Strategy ................................................................................................................... 76 Customer Reactions ............................................................................................................ 77 Competitor Reactions.......................................................................................................... 77 Break Even Analysis ............................................................................................................ 77

8. IMPLEMENTATION .................................................................................................................. 77
Financials ................................................................................................................................... 77 Pro Forma P&L .................................................................................................................... 79 Marketing Budget ....................................................................................................................... 79 Controlling the Marketing Plan .................................................................................................... 81 Post-launch Activities ................................................................................................................. 81 Tracking and Monitoring ............................................................................................................ 82 Organizational Requirements .................................................................................................. 83 Organizational Plan ................................................................................................................... 85

9. BIBLIOGRAPHy ..................................................................................................................... 87 10. TABLE OF FIGURES .............................................................................................................. 89 11. LIST OF TABLES ................................................................................................................... 89 12. LIST OF EXHIBITS................................................................................................................. 90 13. APPENDIcES ........................................................................................................................ 91
Project Proposal .......................................................................................................................... 92 MOA ........................................................................................................................................... 97 Weekly Assignments ................................................................................................................. 148

SecTion 1

executive summary

Market Opportunity
With over 50 million monthly unique visitors, many of them searching through millions of documents in over 90 different languages, Scribd is currently is the largest online publishing company in the world. As a new competitor in the e-book industry, Scribd has already established a unique position as the largest social publishing company in the world, and has been referred to as the YouTube of written documents. Scribd entered this highly competitive market with the introduction of their iPaper technology (Scribd.com, 2009). This disruptive technology has given them a competitive advantage in the market. Their unique vision, where writers and authors are given the freedom to publish almost anything, and the opportunity to profit in an 80/20 revenue split leads to an exciting positioning moving forward and their big idea: A writers dream, a readers paradise Through our secondary research and use of the market sizing and forecasting models, (Harmon, 2007) our team has arrived at a Total Available Market (TAM) of 53.8 million potential buyers representing $1.3 billion worth of buying power in the e-book (digital publications) industry. Within this market, we have derived a Served Available Market (SAM) consisting of 23.3 million potential buyers, representing $563 million worth of buying power. The target market selected through our analysis of three potential market segments is the Alternative Online Consumer and aligns best to Scribds offerings, vision, and culture. Launched in March of 2007, Scribd resides in a market that is currently dominated by Amazon and home to players such as Docstoc and multiple smaller market entrants. Scribd currently holds a XXX percent of market share and will be working diligently to increase their brand awareness within the market. Scribd has established itself as a true player and continues to thrive, in part, at least, by remaining true to a vision that makes them a remarkable service provider. To date, Scribd has been able to continuously create awareness, gaining new potential customers (visitors to their site), and establishing beneficial partnerships at a rapid pace. From Scribds vision, to liberate the written word to turn everyone into a publisher and create the best possible reading experience on the web and mobile platforms, we have derived three contiguous objectives: 1) provide sustainability of the written word, 2) create a one-stop-shop for all things written, and 3) maintain integrity in displaying a creators work. The ROI for Scribd current investment capital has been calculated to be around 600 percent by the end of first quarter 2012. Scribd hopes to secure revenues of $95 million with their initial $12.8 million gained through investment capital. The original capital investment of $12.8 is forecasted to start producing profit in the second quarter of 2010, as a result of multiple revenue drivers including the launch of the Scribd Store in May 2009. With this new revenue stream Scribd can become not just a social online publishing site, but a viable and profitable enterprise. Being the platform facilitator in the written document-sharing world, as Scribd continues to grow as will their offerings. In June 2009, Scribd partnered with the fourth largest publisher in the U.S., Simon and Shuster. The continued attraction of writers and publishers, of course, provides more value to customers with regard to diversity and availability of publications. As a result, a growing rate of visitors to the site will provide Scribd the opportunity to increase on-site advertising revenues, attracting more and larger advertisers and raising rates.

company Overview
Founders: John Adler, Jared Friedman, and Tikhon Berstamm current Invested capital: - Y Combinator - $12k Seed - The Kinsey Hills Group - $40k - Angel - Redpoint Ventures & The Kinsey Hills Group $3.71M Series A - Charles River Venture, Redpoint Ventures & The Kinsey Hills Group - $9M Series B Future Investment Required: - $7M Dedicated to R&D and Promotions

Differentiation: Scribds technology and unique service allows customers to co-create value that is currently unrivaled in the industry. Business opportunity: Scribd is capable of altering the way that the e-book industry currently operates, and possesses the seeds to potentially forever change the worlds reading experience all together. The initial startup capital has allowed Scribd to create iPaper, and the resulting superior viewing and publishing experience. iPaper has made it convenient for users to transform their current PDF, Word, Keynote, Numbers, Power Point files, or various other formats, into the universal Adobe Flash format, for easy viewing and storing. Scribds primary business functions are to provide services through a website that allow consumers, publisher, and writers with a place to connect and share. To continue to enhance the customer experience, Scribd will need further capital to continually improve upon their platform technology and new product development.

competitive Assessment
Scribds two main competitors are Amazon and Docstoc. Amazon is the e-book industry leader and strong competitor due to their handheld reading device (Kindle), which makes the reading experience more interactive. They also have an already established readership and great amount of inventory creating a challenge for Scribd to convert customers. Docstoc is also considered a key competitor because they offer a very similar service, allowing authors to upload and readers to download books online. Docstocs focus is on the business and educational market segments.

competitive Advantage
Scribd maintains a competitive advantage in three major areas: price, technology, and flexibility. Scribd can offer lower priced publications because they offer authors 80 percent of revenues in return for them using their website to publish books. Because Scribd offers such a high return on profits, authors are given an incentive to price low because they still earn more on profits than any other retailer. In addition, Scribd offers free and low cost publications as an enticement to potential customers. The second competitive advantage Scribd maintains is their technology used to upload and download books. iPaper has allowed Scribd to stand out among competitors in terms of speed for downloading books and user friendliness. Current suppliers of e-books have yet to master a downloading technology that creates convenience for both the author and the reader. The ability for Scribd to give readers the exact design and layout the author intended, provides an unmatched customer reading experience. The last competitive advantage Scribd maintains, is their ability to open their service to all authors who want to publish their work. This gives Scribd a huge advantage because the suppliers are limitless in terms of the type of work that can be uploaded. People are attracted to this website because they have the largest variety of reading material available with just a click of a button.

Net Assessment
Internal SwOT Strengths iPaper capabilities Flexible pricing structure Indexing and embedding capabilities weaknesses Low number of revenue drivers Lack of CRM integration An analysis of Scribds strengths and weaknesses has uncovered the need for Scribd to continue to invest in innovative technology. As competitors race to meet or beat iPapers capabilities, it is crucial Scribd be one step ahead. Scribd also needs to continue to co-create value with partners and customers that can surpass the value
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created through online retailers such as Amazon. Additionally, an introduction of their own mobile reading device, via in house development or a partnership, is key to Scribds future success and growth within the industry. Scribd needs to continue to enhance the reading experience, while also implementing a CRM program to improve the overall customer experience in order to remain a viable player in the digital publications market. External SwOT Opportunities Expanding e-book market Media and publishing partnerships and contracts Threats Quick product innovation Duplication of iPaper technology Exploration of the external market has given insight to areas that need to be addressed for Scribd to continue to be successful far into the future. While virtual readership continues to grow, Scribd needs to establish a large partnership base to continue to provide more value to market consumers than their competition. Examples include magazines and educational publishers. While rapid industry growth provides Scribd with advantages to compete against industry giants, the threat of competitors and new market entrants eliminating Scribds iPaper technology advantage is a concern. Investment capital should be allocated to R&D to continually adapt and stay atop the innovation curve. Scribd has an exciting future ahead. The Marketing Strategy section of this document lays out the plan for moving forward by creating a blue ocean technology, a unique positioning that will differentiate Scribd in a meaningful way, and a marketing communications plan that will create the necessary brand awareness, community of followers and revenue gains to cross the chasm from start-up to market leader. To achieve these gains, Scribd seeks an additional $7 million in final round investment funds. A majority of these funds will go to continuous and aggressive R & D, promotion and brand awareness, and the development and deployment of a progressive CRM program.

SecTion 2

Business Overview
This section will demonstrate an overview of the Scribd company specifically illustrating a product description, value propositions, and brand recognition. The companys big idea will be presented, the framework in which it operates along with the underlying factors that feed into a successful implementation. The strengths and weaknesses will be addressed for the overall strategy. All of these components will be taken into consideration in providing the assessment for the market opportunity.

The Business Opportunity Scribds Big Idea


From the beginning, Scribd founders had a vision. With their company and its website, they wanted to liberate the written word. This vision honors the authors of written works, and benefits the reader by attracting works of all kinds. They want to make it simple to publish and make writers work visible and available to the masses. With the addition of the Scribd store, Scribd has created a revenue stream that takes them from being a social online publishing site, to a potentially very profitable enterprise. It will be a challenge for them to compete strictly in terms of e-commerce, as they are challenged by the behemoths of the industry. Scribds biggest business opportunity, then is to commit to the vision, staying advocates of writers and authors, continuing to offer the most innovative and popular platform so that readers can truly enjoy the reading experience. Their niche, if you will, is in the quality service they offer, and the pairing of what writers need and want, and what readers desire. Scribds big idea A writers dream, a readers paradise.

company Overview
Scribd was founded in 2007, by John Adler, Jared Friedman, and Tikhon Berstam and is currently the worlds largest social network publishing site (Crunchbase.com, 2009). The company offers a variety of services that include; free storage place for personal or professional documents, quick and efficient publishing, and a place for publishers to sell to consumers (Scribd.com, 2009). Consumers are provided with an easy-to-use one stop website and social online network. Scribds inventory currently consists of millions of articles, content in 90 different languages, and tens of millions of new readers every month. Scribd provides the customers with easy document sharing, improved imbedding functionalities and an incomparable digital reading experience (Scribd.com, 2009). Scribd unique structure in allowing any individual to go on to upload, download and share a wide variety of literature attracts the masses providing the potential for all current and future revenue generation. In May of 2009, the company launched the Scribd store where users could go on and purchase published books and documents, and a month later they signed a deal with the fourth largest publishing company in United States. Simon and Schuster brought with them 5,000 e-books, and the workings of a great relationship and opened the floodgates enabling future alliances to be set in place (Crunchbase.com, 2009).

The image to the right is a screenshot from Scribd.com, showing Simon and Schuster featured on the landing page of the Scribd store.

Exhibit 2.1 Simon and Schuster Featured on Scribd Store Source: (Scribd.com, 2009)

Authors and publishers are being provided a profitable revenue source from Scribd, derived from increased consumer reach, better price control, lowered cost of distribution, and higher volume of general traffic who may convert to customers upon previewing that writers work. The gained exposure, in turn, helps the publisher to reach more readers and find new writers. This multidimensional balance between free published literature by the millions and the Scribd store provides a healthy balance that encourages sustainability in the reader/writer relationship. At the same time it assists in generating viewership, brand awareness, and revenue, all while staying in line with the vision of the company. The social publishing network market has vast competition, with several startup companies, and many venture backed competitors. The introduction of e-books created a new playing field for existing retail websites and companies scratching at the potentials of the industry. While key competitors concentrated on profitability from sales and advertising, Scribd supported by The Kinsey Hill Group, Redpoint Ventures, and Charles River Ventures providing $12.8M in funding allowed them to focus on innovating new technologies and building strong value drivers with both publishers and readers (Crunchbase.com, 2009). The launch of iPaper in conjunction with establishment of signing deals with new publishers positively positioned Scribd in the market. Scribds strengths include their ability to meet specific needs of the customers through their iPaper technology, which include convenient formatting, embedding functionalities, and advanced viewing experience. This technological feature in line with a customer centric vision is what truly sets Scribd a part from the rest. Another strength of the company is lower costs for the writer and reader. It is free for the consumer to store, and view purchased material, as well as uploading and publishing. Unlike Amazon, where you have to purchase a device to view their digital publications, there are no costs of entry. Weaknesses include the constant consumer concern of copyright issues along with the longevity of the company and its commitment to the market (Jaclyn Blog). Scribd currently scores low in brand identity due to lack of publishers and advertising. Yet, with new publication relationships at Scribds doorstep

and a user base growing by the millions, brand equity and awareness are soon to be factors contributing to the strengths and successes of the company.

Products and Services


Product Description Scribd is an online document-sharing website enabling customers to upload and download documents in a variety of formats using its newly developed iPaper technology. iPaper is built with Adobe Flash and fully equipped to work with Windows, MacOS, and Linux, converting millions of PDFs, PostScript files, Excel spreadsheets, and PowerPoint presentations into the best viewing experience on the web. Scribd users can take advantage of the embedding capabilities enabling bloggers and websites to instantly embed iPaper documents into their work (Scribd.com, 2009). This relationship graph below demonstrates the different ways that users can utilize Scribd as a service. The illustration depicts the flow of literature as an ongoing cycle with Scribd as the medium for millions of people to share with one another.

Exhibit 2.2 Scribd Relationship Graph (Source: Kinero Tan, 2009)

The platform that the Scribd founders have created enables a sustainable environment all leading back to the Scribd website. With an easy-to-use and uncluttered feel, navigating through the millions of uploaded documents has never been easier. Search features allow viewers to explore by Books, Business, and Academics with categories ranging from sheet music, newspapers, to brochures and magazines. Once users have created an account, a community of writers are readily available that share specific interests whether that be short stories or cooking recipes. Publishers are equipped with a step-by-step process to get through the easy uploading, taking no longer than five minutes, and a help desk is readily available with quick and efficient responses sent back to the customers personal message board. Real time changes are available for publishers to modify the way their documents are viewed (Scribd.com, 2009). A Scribd Copyright Management System (CMS) has been developed along with a set of best practices tailored to the Scribd website. This system flags any unauthorized works by checking it with the hundreds of thousands of documents that have already been uploaded, and publishers are able to add their work into the database. Scribd has an ongoing relationship with other document-sharing websites who have an invested interest in improving the technology and best practices to protect their writers (Scribd.com, 2009). Third party users share many of the same capabilities on websites and blogs that have Scribd embedded documents. They are able to view the document in full the same way that it would appear on the website without having to link back to the Scribd page. Yet the ability to link back is available and conversion of third party users to Scribd readers and writers brings the potential for this group to become a piece of Scribds dynamic operational layout. Moving forward the focus will look at the multidimensional aspect of the service that Scribd provides. Specifically, an evaluation of the customer downloading and uploading experiences and how they compare with those of Scribds

biggest competitor Amazon, will be looked at in detail. The value drivers and what truly inspires the motivation for consumers to visit Scribd and once again how they compare to Amazon will be analyzed to assist in coming away with the most efficient strategy to be implemented within the next three years. This graph indicates the key features that are of most importance to Scribd downloaders indicating the advantages of each feature and how they benefit the customer.

Table 2.3 Feature Advantage Benefit Requirements for Readers and consumers (Source: Scribd.com, 2009)

The Scribd search and suggest feature is clear and concise guiding users to the exact written documents they need. With broad categories that are further divided, the search process is made easier for users looking for business or entertainment. The ease and convenience of the one step sign up and payment ensures users are not wasting time to get the documents they need (Scribd.com, 2009). All of these elements add up, creating an easy-to-use website. A display of part of the actual document is shown before purchase to ensure confidence that readers are getting exactly what they signed up for. Embedding capabilities allow users to easily access Scribd documents without creating a link to the site, and iPaper embeds are viewed without leaving the owners website or blog. Scribd users upload and download on the platform of their choice, creating a low cost environment for publishers and readers alike to share the written word. Amazon, on the other hand, has a strong website in navigation and search. Yet, the clutter of multiple products gets in the way of consumers trying to get in and out with a purchase of a product. Amazon customers are forced to by a $300 Kindle Reader to allow their consumers to view publications (Amazon.com, 2009). This is one area that distinguishes Scribds strength in flexibility of multi platform upload and download. This next graph displays the service features provided for publishers uploading their work, the advantages in comparison to Amazon, and how these features benefit the publishers.

Table 2.4 Feature Advantage Benefit Requirements for writers and Publishers Source: (Scribd.com, 2009)

Scribd offers a service that is a publishers dream with pricing structure that is all about the publisher first. With a generous 80/20 split and the capability to set your own prices lures many publishers in. They are empowered with the ability to make changes to their documents around the clock. Publishers are also able to take advantage of the millions of hits that Scribd receives every month in increasing potential sales (Scribd.com, 2009). Amazon is unable to live up to these offerings for any of their publishers. While they are strictly focused on generating revenue, Amazon sets the prices for their partners and they are limited to publishing just books. The ability for individuals to go on to change the viewing and downloading options are non-existent. A sense of community surrounding literature and dedication to the integrity of the authors work is incomparable to the vision and alignment that Scribd shares with its publishers. value Proposition After analyzing each potential segment that Scribd is set out to target, a set of value drivers were established aligned with creating value for the needs and wants of the Scribd user. Using a theory created by Kim and Mauborgne in an article titled, Charting Your Companys Future these drivers will be compared to where Amazon currently stands as a competitor, and provide a strategy canvas that will be mapped out to determine the direction that Scribd will take moving into the future (Kim and Mauborgne, 2002). The following graph provides the value drivers that are of most importance to the Scribd consumer and how these drivers compare to Amazon. It also is the inspiration contributing to the development of Scribds value proposition.

Figure 2.5 Scribd value curve Scribd vs. Amazon (Source: Kim and Mauborgne, 2002, Scribd team consensus, July 22nd, 2009)

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The majority of the shared pieces on Scribd are free and you also do not need to buy a device to view it (Amazon. com, 2009). This is one category where Scribds non-existent hardware and usage costs drive in audiences by the millions. The ability for iPaper to convert documents onto multiple platforms is unmatched and one of the main factors enabling Scribd to be one the biggest players in the industry. While Amazon has a great reading experience, it is limited to the Kindle platform. With audio features and life-like reading experience, the actual device is one step above the field (Amazon.com, 2009). Yet, Scribd is still able to compete in this category due to the innovative technology that enables readers to view converted documents the exact way that the publishers intended them to be read. Scribds platform also has the ability to reach mobile platforms. Vision alignment with customers is an area that breathes within the culture created by the Scribd founders. This is truly a place where sustainability of the written word is preserved and an atmosphere for readers and writers to cocreate their dedication and enjoyment for literature is made possible. The variety in literature offered is incomparable in meeting unique user needs. With a wide variety of readers and writers they have created a service model that makes this value category impossible to replicate by competitors. Amazon is a company that is strictly focused on generating revenue and it is understood that they are not hiding it. The headings and margins of their website are loaded with credit card offers, advertisement banners, Kindle attachments, and it immediately becomes obvious for Amazon customers that they are strictly looking to sell their products (Amazon.com, 2009). The major difference is that Scribd customers are not just strictly consumers of the offerings, instead they become a part of the product and service. Current brand image is low in comparison to Amazon. While Scribds tone, look and feel is strong, low recognition and awareness are a result of lack in big time publishers and advertisements. The recent signing with Simon and Schuster, arrival of new partnerships, and an effective advertising campaign in conjunction with vision alignment of consumers, brand image and awareness will soon be a future strength added to the collection. Many of the value drivers feed into the overall purchase experience. The ease of search and navigation are nicely laid out. A convenient one step sign up and check out enable a fast and efficient transaction process. An actual portion of the intended document to be purchased is displayed to ensure that customers are getting exactly what they signed up for (Scribd.com, 2009). In comparison to Amazon the clutter of Wish Lists, multiple devices for the Kindle reader, and product on top of product deters users from getting though the purchase experience. It also discourages future purchases from the site (Amazon.com, 2009). The combination of these factors assisted in establishing a value proposition and the creation of a new value curve. After understanding the current frame in which Scribd and competitors in the industry currently operate in, many of the same value drivers have been chosen as a focus for the future strategy of this company, along with a number of factors that guide them into creating a gap, to set them even further apart from the pack (Kim and Mauborgne, 2002). Scribds value Proposition Scribd is the premier innovative global publications resource that fosters and inspires a culture where all writers and publishers thrive, thereby expanding its customer base and creating profitability. The following graph indicates the new value curve created in alignment with the discoveries formulated of the current state of the industry that Scribd operates in. Many of the same values were chosen along with new drivers that will assist in guiding decision making in day-to-day operations. The first seven categories were existing drivers, and last five categories in the graph will be new focal points for Scribd (Kim and Maugborne, 2002).

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Figure 2.6 Scribds New value curve Present vs. Future (Source: Kim and Mauborgne, 2002, Scribd team consensus, July 23rd, 2009)

Multiple platform capabilities are a key value driver allowing the overall use and distribution of the Scribd service. While this currently is a strong point in Scribds current model, they must continue to stay innovative
in this field. Specifically, steps need to be taken towards creating an effective and useful iPhone application, bringing them one step closer to identifying themselves with individuals who enjoy Amazons Kindle Reader. This category is vital in attracting the masses and competing with others who already have a large share of the market.

Eventually Scribd must create a portable reading device in order to thrive. Continuation of product usage on other platforms is still key, yet the versatility of allowing consumers the option will assist in taking away an even larger share of the market. This combined with the variety in literature that Scribd offers will differentiate them, and the continued push in providing a better reading experience including adding audio features for all platforms will blow the competition farther away. The alignment and vision with customers and meeting unique user needs are areas that are also currently strong. Although Scribd must continue to ingrain this image into their users minds as they grow and add new offerings. It is important that they stay true to the community of users and remember why readers and writers came to begin with. Growth in variety of literature is a core piece in meeting unique user needs. As the partnerships of trade publications and other media alliances form the alignment with user needs will become stronger. Moving into the future Scribd must look to generate new revenue streams by establishing new partnerships with educators, more publishing companies, and even branch out in creating alliances with the dying use of newspapers. All additions to the Scribd store will enhance the relationships with the reader/writer community and ultimately the overall purchase experience with readily available material. This will truly be the one stop shop for all things written. With the addition of more publishers and other media publication partnerships, brand identity will grow, and the following will increase by the millions. Customer relationship management systems are currently nonexistent. While Scribds set of best practices assist them with copyright issues and taking down repeat articles in a database with tens of thousands of articles, the CRMs moving into the future must be utilized much more effectively. Copyright protection is vital in aligning themselves with publisher needs, and without an effective system, this will push many of the serious writers away. CRMs also should be assisting in keeping track of past buyers and users encouraging repeat purchases, tailoring offers that appeal to each unique user. With millions of users already within the Scribd community CRMs will help Scribd better understand their customers in continuing to co-create value in use. By following the strategy canvas that was created and using it as a reference to guide everyday business decisions, it will help each individual in the company towards the overall goals that have been set in place. The visual representation will help employees see where they currently stand and motivate them towards where they want to be (Kim and Mauborgne, 2002).

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Brand Identity The founders of Scribd have a vision. They want to liberate the written word to turn everyone into a publisher and create the best possible reading experience on the web and mobile platforms. (Scribd.com, 2009) Their vision is an important part of their brand identity. It identifies them as a company with strong values, and an understanding of the importance of benefits versus features with their customer in mind. The Scribd services provide an easy and efficient way for any writer to publish, and a flexible platform that makes reading on a screen a much more pleasurable experience than it had been before iPaper technology. The service also includes a customer store, where e-books and other electronic publications are made available for purchase. The brand identity for Scribd currently consists of their name, logo, website, public relations efforts and word-ofmouth referrals. There are Scribd Twitter and Facebook pages, but the content and layouts are cursory and the use of these as social media tactics in their current state of development is, most likely, negligible. The company name, if promoted well, could be a strong element of their brand identity. It is classified as an invented name, derived from the word Scribbled, but also fits the description of an evocative name, which evoke a positive attribute or feeling (Best, 2009). Current brand names that are also classified as evocative and have considerable mindshare among U.S. consumers are Yahoo!, Google, and Amazon. The logo mark depicts a simple icon of a document floating on a multi-colored circular background. It is clean, simple, and easily recognized. It is too soon for significant brand equity to be associated with this logo. We believe the logo should be improved upon before a new promotional campaign is launched. The website is a very important element Scribds brand identity. The site design is simple, clean and is easy to navigate. Search functions are easy to find and use, and both readers and publishers can find what they want on the homepage. It has a professional, yet friendly look, and appears to be patterned after well-known, consumer-friendly sites such as Netflix. User familiarity also aids in ease of use. The traffic to the site is exceptional for such a new company. Scribd claims more than 60 million unique users visit their site each month and more than 50,000 new documents are uploaded daily (Scribd.com, 2009). Top-level navigation includes Home, Explore; Community, Partners, and Store. Explore leads to a search landing page, with suggested books and publications and a left hand secondary level navigation to aid users in choosing areas of interest. Community leads to a landing page where users can create their own groups on the site. Beneficial marketing messaging and promotion of Scribd culture and importance of community are nonexistent, and would enhance brand identity and competitive differentiation significantly. Brand Identity Promotion The Scribd brand identity has not been promoted sufficiently. Team research failed to find marketing communications other than articles and editorial reviews, a Facebook page and a Twitter page. There has been a limited amount of search engine optimization (SEO) and search engine marketing (SEM) put into place. When searching for e-books on booth Google and Yahoo, Scribd does not appear in the first 10 pages of findings, however they do appear sixth on the pay-per-click sponsored links on Google Search. Scribd does not have a sponsored link on Yahoo Search. Scribd is a young company in an industry whose competitors include established book online retail giants. Going forward, Scribd needs a strong value proposition, and a clear business strategy that creates a unique space for them in the e-book industry. From there, they will benefit greatly from a marketing and communications program that promotes brand awareness and differentiates them from competitors such as Amazon and Google based on points of parity and points of difference. A proposed marketing communications plan follows in Section VII. Strengths and weaknesses Scribd provides a service that is growing in correlation with its potential market size. As the use of computers and Internet access continue to grow, the demand for a service that is capable of efficiently delivering real-time documents and books is being more and more widely accepted. With Scribds iPaper technology, embedding capabilities, and a captivated audience participating in uploading and downloading, and all the buzz surrounding Scribd, 60 million viewers a month have already been fascinated enough to at least take a peek at Scribd.com (Scribd.com, 2009).

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With a pricing structure that has a leg up on their competitors, Scribd owns a vision that is in line with what publishers are looking for. They also have created an atmosphere where writers can feel as if they have ownership to the way their work is displayed allowing for real time changes in pricing and formatting. Yet, currently Scribd has a minimal share of the market with competitive monsters including Amazon, Docstoc, and bookstores with online retail sites, such as Barnes and Noble. Besides the recent launch of the Scribd bookstore, Google Adsense placed advertising is the only steady stream of revenue to sustain growth. Technology barriers including copyright issues, staying ahead of rapidly occurring platform innovations, and highly competitive product innovation from competitors with big time funding.

conclusions
With a combined $12.8 million in private funding, Scribd already has a hold of the reigns with all the necessary resources at hand (Crunchbase.com, 2009). They now need to focus in on harnessing this captivated audience, and continuing to build on the values that they have already created in their service offerings. iPaper technology and alignment with user needs is what allowed them the current success they hold. Yet, product innovation and technological breakthroughs are a necessity to enable Scribd to continue to thrive. The creation of a portable reading device is a necessity in enhancing the Scribd reading experience and also making them a more competitive player in the industry. Scribd must find ways to generate revenue by establishing partnerships with multiple media publications while still maintaining integrity to the written word and strong relationships with current and future consumers, writers and publishers. As the number of products continue to grow along with innovative technological offerings, they must maintain the uncluttered, focused, and easy-to-use website that set them apart from their competitors to begin with. With millions of users, an efficient CRM system must be set in place to tailor to unique individual user needs. Scribd is capable of altering the way that the e-book industry currently operates, and possesses the seeds to potentially forever change the worlds reading experience all together. The structure and thought process that was fostered by the founders of Scribd incorporated the core competencies of a physical bookstore, distribution of e-books, online social networking, and the ultimate reading experience creating a model for the roots of an uncontested market space (Kim & Mauborgne, 2004). The innovative iPaper technology has put them at the forefront in terms of online viewing experience. Scribds multi platform capabilities and pricing structure, in conjunction with a social network which attracts the millions in tune with co-creating value in achieving Scribds big idea will assist in battling with the giants in the industry and deter and slow down new entrants from competing.

SecTion 3

technOlOgy assessment
The technology assessment exists to introduce and describe the technology that Scribd uses in its day-to-day operations. Scribds only product is electronic documents, so there isnt any hardware to speak of in terms of their technology. However, according to Scribd.com they were one of the first companies to launch an online reader for their online documents.

Formal Product Description


According to the Guardian.co.uk website, e-books have been around since 1971, the initial aim being to provide literature to the masses in a non-profit, mass-education effort. However, since then e-books have become a major for-profit business and are expected to generate $114 million in revenue in 2009. An e-book is essentially a book that is published in an electronic format. E-books are produced in many different formats and can be read across many different platforms and reading devices. Scribd is a company that sells e-book along with many different types of electronic publications. Scribd.com serves as their online social publishing network as well as is where their e-publication store is hosted. Scribd allows users to upload their documents for either download or sale. When downloading documents, depending on the level of security chosen by the publisher, they can either be retrieved as a downloadable PDF or viewed in Scribds proprietary iPaper online document viewer. If viewed in iPaper, documents will simply load in the flash-based iPaper viewer for instant, accurate document viewing. From iPaper, unless prohibited by the publisher, the document can be saved onto the users computer/reading device or printed out for a more paper-based, traditional reading experience.
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Product Technology
To understand where Scribds marketing plan needs to go, it is important to understand the differentiating technology that Scribd has to offer. iPaper is Scribds revolutionary flash-based document reader that allows all of the documents uploaded to Scribd, to be read on any online web browser. This section provides an introduction to iPaper and to Scribd.com, as the site that created the iPaper technology. Also, this section covers competing technologies, the lifecycle of an e-book, technology partners, cost factors and drivers, and disruptive technologies. Scribd is an electronic document sharing site and electronic document marketplace. Scribds is primarily a website where documents of almost any digital format can be uploaded and shared across the Internet, anywhere or anytime. The uploaded documents are then accessed via Scribds iPaper online, flash-based document reader. iPaper has support for over 18 electronic document formats, including PDF, DOC, and PPT. iPaper is functional on any flash-enabled web browser and therefore is supported in every operating system that has a GUI. iPaper allows for immediate viewing and sharing of documents as well as the option for making documents available for download, or download for a fee. iPaper is also an embeddable technology so that any blog publisher or website owner has the option to embed their documents directly into their websites. The technology of the iPaper document reader is what can help Scribd become the standard for online electronic document reading. This is due to the fact that iPapers cutting edge technology allows for exact translations from document format to what is displayed on screen. What this means is that, unlike the Amazon Kindle, any special formatting or graphics that are part of a document retain their intended format regardless of the platform they are being viewed on. This is promising for the future of Scribd because textbooks and scientific manuals could become a huge part of their business, having the ability to accurately represent the information in those types of publications is vital. As previously mentioned, iPaper provides a reading experience that is accessible for anyone with an Internet connection, a GUI-enabled operating system, and a flash-enabled browser. iPaper is also available on the iPhone and the T-Mobile G1 phone (i-stuff, 2008), with these technologies combined there are practically no consumers in Scribds target market that couldnt be reached with their service. With a versatile technology like iPaper, the future is very promising for Scribd. However, iPaper is only as strong as the storage system on which their content is saved and served from. To ensure that the documents that are uploaded to Scribd.com retain integrity and have adequate redundancy, Scribd uses Amazon Simple Storage Service S3 (Bentley, 2008). Amazon S3 is a cloud-based storage system that has advanced, customizable security features, and its buy-as-you-go pricing policy allows for infinite scalability (Farnsworth, 2009). These features create a secure, robust storage system for all of Scribds publishers intellectual property. The following figure illustrates the protocols for both file uploads and downloads.

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Exhibit 3-1 Example of Scribd.coms file download/upload flow (Source: Jason Rippy, 2009)

Scribd has a vision that hopes to liberate the written word to turn everyone into a publisher and create the best possible reading experience on the web and mobile platforms. (Scribd About Us, n.d.) Existing as an online flash-based document reader, iPaper will help to achieve this vision. Adobe, inventors of the Flash Player, note that the Flash player is installed on 99.0% of Internet-enabled desktops in mature markets (US, Canada, UK, France, Germany, Japan). (Adobe, n.d.) This fact is integral for Scribds success as Flash is required for online document viewing and is beneficial to Scribd users because there isnt any proprietary software to install in order to utilize Scribds library.

Product Platform
The main components of Scribds product platform are the proprietary iPaper reading interface, Adobe Flash and modern web browsers. All of Scribds content is readily available for reading through the iPaper interface. As long as the end user has a modern GUI web browser with Adobe Flash enabled and up-to-date, they can access Scribd content. One potential problem for Scribds platform is that iPaper is not an open-source software project and if there are problems with the reader, it is up to Scribd to find and fix all of the software bugs. This is only an issue at the moment because Scribd employs fewer than 30 people and may not be able to respond as swiftly to technical issues. Converting iPaper into an open-source project, while lowering the potential entrant boundaries, would create a tremendous community of participants that could potentially take the technology to the next level. After all, the technology isnt Scribds business, content providing is. As long as Scribd continues to sign new publishers, content will be king and iPaper wont be a competitive advantage as much as it will be a vehicle for their content.

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competing Technologies
In order for Scribd to impress their offerings into the mainstream; there are several obstacles they must first overcome. Various technologies offer an obstacle for Scribd to overcome in an effort to impress their offerings onto the mainstream. The competitors are not only competing in product downloads, but also in external document reading devices. The electronic document business is a matter of providing distribution for material and Scribds competitors offer solutions similar to Scribd and some solutions that Scribd cant offer currently. This constant battle for technology advancements makes it hard for the consumer to differentiate their advantage over competitors, causing the consumer to lack brand loyalty. Amazon Kindle The Amazon Kindle is an e-book reader that uses the revolutionary e-ink display to emulate the book reading experience in a handheld device. The Kindle can read e-books purchased from Amazon in the proprietary Kindle document format. Amazon currently has over 300,000 books that are available for immediate download on the Kindle. As well as the Kindle format, the Kindle supports viewing of the world newspapers in addition to displaying content from over 5,000 blogs. (Amazon Kindle, n.d.) The Kindle utilizes Sprints EVDO cellular network to retrieve any content for the Kindle. This was established in an effort to create an actual standalone device that wouldnt need a Wifi connection or a personal computer (Frucci, 2007). There is no additional charge for the EVDO connection, it is complimentary for the life of the device. The Sprint EVDO network has a maximum speed of 3.1mbps download and 1.8mbps, this facilitates downloading of Kindle books in 60 seconds or less (Frucci, 2007). The chart below shows the various stages that Scribd and Amazons products take when purchased.

Exhibit 3-2 Side-by-side comparison of Scribds and Amazons user download flow (Source: Liam Flaherty, 2009)

Docstoc Docstoc is an electronic document sharing website. They are similar to Scribd in that they allow anyone to publish electronic documents; they offer support for 10 document formats (Docstoc, n.d.) compared to Scribds 18+ compatible formats. Also, as with Scribd, Docstoc has an online flash-based document reader that all of their content can be viewed through. Due to the reader being flash-based, Docstoc is compatible with any operating system with a GUI that has an internet-connected web browser.

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Technology Partners
Scribd started in 2007 with no major publishing partners. As of 2009 they have deals with many major publishing houses such as Random House, Simon & Schuster, Workman Publishing Co., Berrett-Koehler, Thomas Nelson and Manning Publications (Guardian.co.uk, 2002). Scribd is utilizing these relationships to offer rich content to its users and its also used to prevent competitors from offering similar materials. According to a June 2009 Business Week article, Scribd is in talks with other big publishers and is working to make its content available on the Kindle and Apples iPhone. (Ante, 2009) Both of these ideas would represent major opportunities for Scribd. There are an estimated 20 million iPhones currently in use and an estimated 1.4 million Kindles will be in use by the end of 2009 (Arrington, 2009), this represents a huge technological opportunity for Scribd. If Scribd could use both of these devices to distribute their material, they would be looking at 21.4 million mobile devices that could access their library of electronic documents. FAB Analysis and comparative Assessment

Table 3-3 Scribd comparative Assessment and FAB Analysis (Sources: www.amazon.com, www.scribd.com, www.docstoc.com, 2009)

Figure 3.4 shows that Scribd stands up to its competitors quite well in all of the categories mentioned. Regarding cost, Scribd has free as well as paid material. Docstoc offers only free materials and the Amazon Kindle offers sample chapters to Kindle owners. In terms of platform, Scribd and Docstoc both have a significant advantage; both employ a flash-based online document reader. The Amazon Kindle is at a large disadvantage here as you need either their proprietary reader or an iPhone running the Kindle application to view their content. Selection is a weakness for both Scribd and Docstoc as Amazon, according to its website, has over 300,000 e-books currently available for the Kindle. Docstoc doesnt publish the number of e-books they have available for download and Scribd also doesnt publish the number of e-books they have available for download or purchase. Scribds largest competitive advantage is that, as previously mentioned, their iPaper reader supports over 18 document formats. Docstoc can only support 10 document formats. Lastly, the Kindle only supports its proprietary Kindle file format and as a result cannot compete with Scribd in this area.

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cost Factors / Drivers The main cost driver for Scribd.com is primarily bandwidth. Since Scribd is in the business of selling e-books and doesnt manufacture a product, there are no associated manufacturing cost drivers. According to the Amazon Simple Storage Service website, there are 3 costs associated with Scribds activities. The first being storage which Scribd pays $0.15 per GB for monthly. Scribd pays $0.10 and $0.17 per gigabyte for upload and download transfers. Scribd. com notes that their average file contains 81,678 characters which translates to approximately 80 kilobytes. To upload, store and allow downloads for 600 average files, Scribd incurs a cost of approximately $0.02 per month. This cost will be higher depending on how many files are being uploaded and download; however, the relative cost is still extremely low on a per document basis. The costs that could not be estimated here are any costs associated with the exclusive licensing agreements that Scribd has established with publishers. Technology Life cycle Scribds iPaper requires either a flash-enabled Internet browser or a compatible mobile device (e.g. iPhone or T-Mobile G1). The average file size is 80 kilobytes as noted in our Cost Factors/Drivers section below, any internet connection would be sufficient for handling such a small amount of bandwidth to load Scribd documents. This flexibility ensures that any internet user will be able to access Scribds library of online content. Product Life cycle Scribd is in the market of selling e-books and e-books, due to their nature, have no life cycle. Being in a digital format, there is no degradation over time and e-books could potentially last forever. Since the documents that Scribd hosts can be read on almost any personal computer, and we are assuming the personal computer has a 5-year life cycle, the only upgrades the consumers should be concerned about are the upgrades to keep their Flash reader up-to-date and compatible with Scribds technical specifications. Adobe Flash can run on almost any personal computer setup, so consumers need not worry about purchasing the fastest, most cutting edge computer to make use of Scribds services.

Evaluate Potential Disruptive Technologies


Scribd announced their Scribd store feature on May 18, 2009 (Claburn, 2009). Essentially, Scribd has created a store where publishers can publish any of their own works, set their own prices, and ultimately keep the majority of the profit, 80% to be exact. Upon launching this feature, Scribd established an e-book marketplace unlike anything that had been launched prior. Despite larger competitors having large budgets, Scribd released a feature that is truly disruptive. By providing larger shares of profit and letting the publishers set their own prices, Scribd created an extremely desirable place for publishers to upload and sell their literary wares. Along with providing a desirable marketplace, Scribd also provides a tremendous analytics system for publishers to track their sales. For example, when someone adds your document to their list of favorites, Scribd warns you via a daily e-mail digest. In addition, Scribd sends an e-mail to the publisher when any of their documents are sold (Savikas, 2009). These features compliment the Scribd store and together prove to be a very disruptive technology. Its not as if features similar to the store and the analytics mentioned above havent existed prior, its that Scribd has made all of them work together to create an extremely cohesive technology set.

conclusions
Scribd is presenting an extremely interesting platform for e-books to be read and sold upon. iPaper paired with Scribds content library makes them a leader in the e-book field. The flexibility of iPaper allows almost every internetenabled computer in the world access to Scribds library of content. With 60 million unique visitors per month (Scribd, About Us, n.d.) and the introduction of the Scribd Store in 2009, Scribd is helping to revolutionize the e-book industry. If Scribd is successful in getting their content available on the Kindle, they will have the mobile e-book market covered by being offered on mobile devices, dedicated e-book reader (Amazon Kindle), and any internet-enabled computer. Technology coverage like that makes Scribd a very dangerous and viable e-book provider.

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SecTion 4

market analysis
The purpose of the Market Analysis is to identify the market segment with the greatest potential for Scribd. From this analysis and selection, the maximum opportunity and potential new markets are defined. The selection of the targeted segment is based on tangible as well as intangible benefits of the Scribd service offerings, the attractiveness of the segment based on value drivers, and analysis of the viability or profit and growth potential of the segments. Although Scribd serves both writers and readers alike, for the purposes of this marketing plan the focus is on potential customers that are most likely to download free or inexpensive publications from the Scribd online library and to purchase the products available through the Scribd store, defined in this document as Readers or Customers.

Potential Market Segments


The potential market segments chosen for analysis and consideration are the Internet-savvy college student, the alternative online consumer, and the career-oriented professional. The customer profiles, or characteristics, of these three segments are described in the following section, Segment Analysis. The information used in to define target segments has been a compilation of data from Mintel, the Diffusion Company, Alloy Media + Marketing, Bureau of Labor and Statistics and Simplymap. The compilation of data from these reports gives Scribd their three segments target market numbers. The three segments do not account for all of the total online publishing/reading service market; however it does represent the majority of early majority, innovators users of Scribds market. The following three paragraphs disclose the process to define and describe our market segments in more detail. The Internet-savvy college student: To find the target market for this segment we used a report from Alloy Media + Marketing that gave us the total number of college students with in the United States. The segmentation dividers that were used to find the target market were: college students that use the Internet, early adopter, early majority, buy book online, and e-book purchasers. The alternative online consumer: To find the target market for this segment we used a report from Simplymap that gave us the total number of people age 18 49 that have an internet connection or regular access to the internet in the United States (Geographic Research, Inc., 2009). The segmentation dividers that were used were: people who have purchased online in the last 12 months (Mediamark Research & Intelligence, 2008), early adopter, and early majority (Moore, 2001). The career-oriented professional: To find the target market for this segment we used a report from the Bureau of Labor and Statistics to get the total number of professional business people in the United States. The segment dividers used were Internet usage, early adopters (Moore, 2001), people that said they would prefer to read an e-book (Allen, 2008). To determine the viability of each targeted segment, this section contains charts showing potential revenue, three years sales potential for each segment and the Segment Potential Table. The data gathered to determine the market potential of the targeted market segments came from articles and surveys from Harvard Business Review, Mintel, the Diffusion Company, Alloy Media + Marketing, Bureau of Labor and Statistics, Simplymap and Mediamark. In addition, the value drivers that support the Scribd offering were determinants in selection of potential market segments. To summarize, consumers most likely to become Scribd customers have a need or desire for published books and other resources; a tendency to purchase online; use the Internet for networking, researching and purchasing; and a preference to align with companies whose corporate values match their own. The specific value drivers applied to our analysis are discussed in the following section. Digital publication, or the e-book, is a recent development in the book industry the industry was launched in 1998 (Roush, 1999). New products tend to be purchased earlier on by early adopters and some early majority consumers (Mason et al, 2007). In addition, those that shop online tend to be more innovative, which is a characteristic of the early adopter (Mason et al, 2007). Each of the segments consists of consumers with the characteristics of early adopter, and with some crossover to early majority consumers. Early adopters are attracted by high-risk, highreward projects, and because they envision great gains from adopting innovation, they are not very price sensitive. The early majority is not looking for revolutionary changes, but is motivated by evolutionary changes that bring about productivity enhancements (Slater et al, 2007).
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Segmentation Analysis
The Segmentation Analysis defines and describes each of Scribds potential market segments with a customer profile and a hypothetical persona based on that profile. To analyze the potential market segments by segment attractiveness, customer value drivers were determined, and charted to factor segment attractiveness, followed by a summary table to contrast the core need, demographics, psychographics, value drivers, and price sensitivity for each of the three segments analyzed, segment attractiveness chart and maximum opportunity. customer Profiles The Internet-savvy college Student This segment is defined as all students attending U.S. colleges and universities. There are approximately 2,554,738 potential customers based on these criteria. Most of these students are between the ages of 18 and 30, and are spending an average of $702 per year on textbooks. A very high percentage of those attending colleges and universities are early adopters and early majority consumers. The highest percentage is 25% of males in postsecondary schools consider themselves early adopters. Based on that figure we can assume as high as 80% of upper-education students are either early adopters or early majority consumers. This group consists of heavy Internet users, who also participate in social networking, online entertainment and online purchasing. About 70% of this group owns a laptop. All students are required to have access to textbooks, and most will purchase them. This group is also more price sensitive than our other segments, and would prefer a used textbook, if it were less expensive, than an e-book (Allen, 2008). Meet Claire. Claire is single and 21, and working on her undergraduate degree in education. Claires parents are paying her tuition and board, but Claire is working part-time to cover the rest of her expenses. And since shes a senior and soon to graduate, Claire is also interested in putting a little money aside to pay for her expenses after graduation. She is considering getting her graduate degree right away, but has her feelers out to see if there are job opportunities after getting her undergraduate degree. Claire is very bright, and for the most part, enjoys school. She likes to try new things, and considers herself pretty progressive. She would probably consider herself an early adopter, but, truth be told, may fit more into the early majority consumer group. Like most of her friends, Claire is a very savvy Internet user. She has a Facebook account, gets most of her music from iTunes, and enjoys seeing the YouTube videos her friends are constantly posting. She also spends a great deal of time on her phone, texting friends throughout the day. When the each term starts, Claire always has sticker shock when she realizes how much textbooks cost. Over the last 3 years shes spent around $2000 on books and supplies, but has managed to save some money buying used books and sometimes selling them back to the student bookstore. She feels she would be open to buying e-books online if the price was comparable to used book costs, especially when shes in graduate school, as shell have to work more, have less time and can see that buying books online and getting them downloaded immediately could be a time saver. The Alternative Online consumer This segment is defined as consumers who a more discerning and tend to make decisions based on their own unique set of values. They are conscientious in their choices and decisions regarding the companies they support, the lifestyle choices they make and search for products that best suit their individuality. Decisions, in general, are driven by their strong sense of independence, however can be influenced by those they perceive as being like-minded, or fitting their selected subculture. Based on an amalgamation of consumer products that would appeal to this segment, the age range for this alternative online consumer is 18 to 49, with only a slightly higher percentage of males. (Quantcast, 2009) Brashear et al stated with the Internet, the younger cohorts are the computer generations and will be more likely to purchase online than older consumers. Online shoppers are younger, possess greater wealth, are better educated, and spend considerably more time on the Internet. (Brashear et al, 2009) Early adopter to early majority

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characteristics apply, as these consumers are open to or seeking better products and services and are willing to try them out. (Mason et al, 2007) This segment is limited to those who have Internet connections. The Internet connection criteria allow us to focus on consumers who are more comfortable with Internet transactions, are exposed to Internet searching and possibly social networking. This criteria also, then, allows us to factor in demographics and psychographics of the Internet purchaser. There are 23,377,728 potential consumers who meet the criteria for this market segment. The average spent on publications annually is $336.00 Meet Tyler. Tyler is a young architect. He earned his architecture degree at a state university with an excellent School of Architecture. Hes been at the same firm since graduating, and chose to work for a smaller firm that specializes in LEED certified housing and small commercial buildings because he feels its the responsible way to practice architecture. Hes committed to creating high quality, beautiful buildings. Tyler is 28 years old, and engaged to his girlfriend of four years. They live in a nice, but not extravagant, condo in a close-in city neighborhood. When not at work, Tyler and his girlfriend spend time with friends who have similar lifestyles and values. Neither of them is materialistic, but would rather spend their discretionary funds for life-enriching experiences and events. They also both love to read, and are interested fiction as well as many non-fiction topics. Tyler considers himself to be fairly innovative and open to new products and experiences. But he also feels hes fairly particular, and therefore likes to take some time to evaluate products and services before adopting them. Hes a heavy Internet user, and does a lot of searching, connecting and communicating on his laptop and iPhone. He also has a Facebook page, and a Twitter account to stay in touch with friends and family. Part of his process when selecting a product or service is considering the corporate values of the products company. He likes to know if they are good corporate citizens, concerned about their customers and provides a positive purchasing experience. If he finds they have values similar to his or a corporate culture he would feel good about supporting hell even pay a little more. The career-oriented Professional This segment is defined as those who hold managerial and professional positions, specifically within business services, public and private education, health services, engineering, engineering management, and social and legal services (U.S. Census Bureau, 2007). For the year 2007, the number of jobs meeting in those classifications is 82,507,000 (U.S. Census Bureau, 2007. The Business Reader segment consists of males and females equally, ages 22 to 62 (Hecker, 2001). The majority of this segment lives in or near the cities they work in. The majority has post-secondary educations, and most of them have undergraduate degrees, graduate degrees or professional certifications (Hecker, 2001). Those in the early stages of their careers are single or married with no children; however, most successful executives who are in mid- or late-career are married with children. There are 9,838,960 potential consumers that meet the criteria of this segment. The annual average dollars spent on books related to their jobs or careers is $140.00. Meet Angie. Angie is doing well in her career. Shes 32, is recently married, and has no children. Angie has always been an over-achiever. Her job as a Marketing Manager at a medium-sized and successful manufacturer is a not the end all, but a step in the right direction. Her goals are to learn all she can in her current position, moving up to a possible Director of Marketing position there, and then make the move to a larger player in a related industry. Angie finds she needs to stay current and continuously learn about her industry and her audiences. She frequently reads books and other materials that will help her be successful as an employee, manager, and to become more of an expert in marketing and her industry. Since she has little time, she prefers online search and download as a means to get the information she needs quickly and with little hassle.

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Angie also has a nice home for entertaining, and likes it to be well furnished. Shopping online works well for her for most things, even brands she has seen in the stores. She likes to shop for price and service, and really likes the convenience of buying from her laptop. She and her husband travel when they can, and research their trips thoroughly before they go. They also love their road bikes, and do a bit of touring as well. They are planning on having children in the next few years try to dining out and going out with friends at the end of a long week. Their social networks help them connect with people, let them know whats going on in their busy world and plan events with friends. They also take advantage of sites that recommend entertainment options, home furnishings, music and other interests. Angie is very comfortable surfing the Internet, social networking and taking recommendations from like-minded strangers. The following section describes the key value drivers relative to Scribd and Scribds potential customers. value Drivers Value drivers of importance to our analysis include Product Value Drivers, which relate directly to the features, advantages and benefits of the Scribd service offering and Customer Value Drivers, which are defined below. Understanding the customer value drivers is key to the success of any company or brand. Product value Drivers The key product value drivers used in our analysis of potential market segments are further defined in this section. These are the most attractive features, advantages and benefits of the Scribd service. These product value drivers are an easy-to-use, well designed website; multi-platform uploads and downloads; online social network and community; more pleasurable viewing and reading; quick and free global access; and social community. customer value Drivers According to Robert Harmon and Greg Laird, Customer value drivers are the decision-related attributes that are perceived by the customer to be the most important to the choice process. (Harmon & Laird, 1997) The key customer value drivers used in our analysis of potential market segments are further defined in this section. Economic, product performance, supplier, buyer motivations and buying situation value drivers were used to evaluate the potential of each of the three potential market segments. Delivered initial cost and flexible pricing structure are the most valued of all the of the economic value drivers. There are no delivered initial costs, such as hardware, or shipping and handling with Scribds offerings. Flexible pricing refers to both the pricing strategy with authors, where they can set there own prices, and the ability to download free and very inexpensive publications, and the option to buy a section at a time of many of the available publications. Scribds currently has no delivered initial cost. The Scribd pricing structure attracts more writers and publishers, which, in turn creates more variety and availability of publications available to the customer. Performance value drivers include features that allow iPaper documents to work on multiple operating systems. Additionally, Scribds iPaper format creates publications that most closely mimic the look of printed publications. Scribd customers are not limited by a single reading platform, and enjoy a digital reading experience that is most similar to the printed version of the book they are reading. Supplier value drivers are those that refer to the company itself, such as its values, culture and the perception of its credibility. Shared values are an important supplier value driver for customers. Scribds vision and philosophy, to support creators and writers, make publications available to everyone, and to create the best possible digital reading experience are values that can be with consumers and partners. The credibility of the source is also a key supplier value driver. Scribds website, concern regarding plagiarism, strong and growing partnerships, and safe ecommerce infrastructure can lend the credibility consumers are looking for. The leading buyer motivations value drivers for a social online publisher include a strong sense of community. Consumers can identity with Scribd as a company and the community of Scribds loyal customers. Further, they have the opportunity to build their own communities on the web site. (Scribd.com, 2009) Having unique needs met is another important value driver for potential Scribd customers. This is accomplished with the diversity of writers and publications available on the Scribd site, and the services offered to writers and readers.

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The more important value drivers in the buying situation value drivers are availability of materials and a positive purchasing experience. A positive purchasing experience refers to the entire process a consumer goes through, including use of the website, ease of search, ease of purchase, and customer service. After defining and describing our three potential market segments we begin to compare and contrast those segments. To do this we are using a contrast table to compare characteristics, demographics, and buying behavior. Segment comparison and contrast The table on the following page (Table 4-1) summarizes and contrasts the core need, demographics, psychographics, value drivers, and price sensitivity for each of the three segments analyzed.

Table 4-1 Segments and Summary of criteria Used to Analyze Each Segment (Source: Adapted from Robert Harmon lecture slides, Portland State Pure Innovation Model, data compiled from Mintel, the Diffusion Company, Alloy Media + Marketing, Bureau of Labor and Statistics and Simplymap.)

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Segment Attractiveness The following figure, 4-2, the Segment Profile Curve, charts the relative importance of each of the value drivers for each potential market segment.

Figure 4-2 Segment Profile curve (Sources: Marketing 464 Team 1 analysis of customer value drivers)

This chart indicates which segment closely aligns with Scribds value drivers. Figure 4-3, which follows, shows the relative segment attractiveness of each of the potential market segments. It is based on weighted averages of ratings of importance of each value driver for each segment. The weighted average of each segment represents the attractiveness of that segment to Scribds service offerings.

Figure 4-3 Segment Attractiveness based on weighted Averages (Source: Team analysis of customer drivers based on Robert Harmon lecture slides, 2009)

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The segment attractiveness graph shows that the Alternative Online Consumer would be the most attracted to Scribds services. Market Potential The following figure shows the 3-year potential revenue estimates for each of the targeted segments using TAM/SAM estimates.

Figure 4-4 Scribd Potential Revenue by Segment (Source: Adapted from Robert Harmon lecture slides, Portland State Pure Innovation Model, data compiled from Mintel, the Diffusion Company, Alloy Media + Marketing, Bureau of Labor and Statistics and Simplymap.)

According to the 3-year estimated revenue figures, the Alternative Online Consumer has the most revenue potential in all three years. The Internet-savvy Student takes second place in potential earnings with the Career-oriented Professional lagging behind. The growth rates for the segments, in that same order, are 173% for last year with the forecasted growth rate to flatten out to 100% over the next three years for the Alternative Online Consumer (Shatzkin, 2009). The growth rates for Internet-savvy Student will be around 25% for the next three years. As for the Careeroriented Professional the growth rate is forecasted to be around 7% according to a Mintel report. We used our research to find the total buyers that represent each segments total buyer numbers. We then were able to make a reasonable estimate for each segments average purchase price by using other resources such as Amazon.com. We took an average of 30 random educational books offered on Amazon to get the purchase price for the Internet-savvy college student. We then took this average and multiplied it by 9 to get the yearly purchase price for this segment at $702. We used two book based on the requirement that be registered in three classes within a term-based school to be a full time student. With students taking three classes a term, and three terms in a year, that equates to a total purchase of around nine books a year. As for students enrolled in a semester-based school, the student needs to register for, four classes to be a full time student. With two semesters per scholastic year, students will be required to purchase around eight textbooks per year. Using an average of books purchased; from both the term and semester schedules, we arrived at 9 textbooks purchased per year. For the Career-oriented Professional average purchase price we took the average of a sampling of the business publications from the Scribd store to come up with $14. We made a reasonable assumption based on an interview survey conducted by Jason Rippy that asked 30 business professionals how many job or career related books they read a year. The finding from this survey allowed us to find that this segment would buy 4.5 books a year to give them yearly expenditure of $140. For the Alternative Online Consumer, we took an average sampling of 30 books currently offered from the Scribd store define the average purchase price per item. As for yearly purchase frequency, we made a reasonable estimate

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based on reports from Mintel and Mediamark. With the data from the reports the number of books bought per year is around six times per year. This creates an average yearly purchase expenditure of $336 for this market segment. We estimated the remaining segment to have a low average purchase price due to the fact that we believe they would be using the site more for the free offerings and purchasing inexpensive offerings very infrequently. Market Access An important factor is selecting a target market is their accessibility in marketing to them. With all the potential market segments analyzed in this document accessibility via the Internet is high. The Internet-savvy College Student segment is easy to access. They spend a great deal of time on the Internet and can be targeted through social media, tribe-oriented communications, online advertising, and SEO/SEM tactics. Further, we can access them through on-campus communication tactics as well. This Alternative Online Consumer segment is easily accessed via the Internet. A traditional campaign would need to be large scale and comprehensive to have any effect, and would prove cost prohibitive for a start-up with limited capital, however, a non-traditional campaign that is contains integrated social media and Internet marketing tactics could be very successful in targeting the Alternative Online Consumer. There may also be guerilla type marketing tactics that would work with this group, further discussed in Section VII. This Career-oriented Professional segment is also easily accessed. They spend a great deal of time searching and reading online, and would be prime targets for online advertising, SEO/SEM research tactics, and other campaigns. Further, they have many vertical market and industry related resources, so we could target them both traditionally, print advertising and direct mail, and at industry specific tradeshows and online associations. Maximum Opportunity Upon reviewing our research and data using the market sizing and forecasting model provided in class, (Harmon, 2009) we have come to the conclusion that the Alternative Online Consumer segment represents the maximum opportunity for Scribd in the current market with $563 million. The next highest segment includes the Internet-savvy College Student that represents a market potential of $200 million. The Career Oriented Professional Segment falls into last place among the three targeted segment markets with a $135 million market potential. To reach these market values, our team pulled data from a variety of key sources including industry reports from Mintel to economic data provided by government agencies. The table below represents identifies the total market opportunity for Scribd three different segments. The three segments 16 percent of the total population within the United States, with a $735 million market potential. The following table shows total number of potential customers, the average purchase price of an e-book from Scribd, and the total annual revenue potential for each segment.

Table 4-5 Segment Potential (Source: Data derived from data compiled from Mintel, the Diffusion Company, Alloy Media + Marketing, Bureau of Labor and Statistics and Simplymap, analysis by Jason Rippy, 2009)

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Target Market
In the Business Overview, Scribds big idea was put forth as the provision of an place and service (social online publishing website) that enables a writers dream, a readers paradise. The business opportunity for Scribd requires a breakaway from their biggest competitors by creating a blue ocean business environment and focusing on the Scribd offering as a service. The success of that strategy requires the selection of a target segment that would prefer not to patronize the large mainstream corporate leaders, nor be defined by their product offering. This is an important determining factor in selecting the target market for Scribd. After reviewing the research and analysis completed for each of the potential target markets, including demographics, psychographics, size of market, market growth and revenue potential over three years, and after taking into consideration of blue ocean strategy discussed above, we have determined the target market for Scribd. Scribds definition as a service is what factors most heavily in our determination of the best target market for Scribd in its early stages. Scribd needs to take the position of Customer Intimacy Leadership. For Scribd, this involves establishing a reputation which exceeds customers expectations, involves the customer in value creation, customizes to the individual customer, can sense and respond, appreciate the lifetime value of the customer, uses customer loyalty as the primary competitive barrier, has an emphasis on intangibles, and provides industry leading customer service. (Harmon class lecture slides, 2009). The Segment Profile curve, in the Segment Analysis section, illustrates that core values that align with Scribd are highly valued by The Alternative Online Consumer. The Alternative Online Consumer also rates highest on the Segment Attractiveness graph, also in that same section. Derived from the findings above, the selected target market for Scribd is The Alternative Online Consumer.

Potential new markets


In the immediate future, with regard to the Alternative Online Consumer, Scribd would do well to create additional partner agreements with the major publishers. In addition, they need to either partner with a company to provide a reader device, or develop their own. Additionally, there are new market opportunities with additional segments, and we would propose both of the potential market segments, the Career-oriented Professional and the Internet-savvy Student, and in particular the Internet-savvy Student, should be considered for future market expansion. The Internet-savvy Student is a market with great potential for Scribd. By partnering with Colleges and Universities, as well as the major textbook publishers, Scribd could be very attractive to higher education students, who are primarily looking for best availability of textbooks and other required published materials at reasonable price, and secondarily, convenience and ease of search. In mid July of 2009, Harvard announced it will publish 1,000 digitized books on Scribd. (ars technical, 2009) This can be viewed as a move in the right direction. Harvard is the kind of partner who can attract similar partners and textbook publishers as well. Global opportunities exist in all of the proposed segments, with the same qualifiers, most significantly, Internet availability. Based on their current online shopping habits, specific European, South American and Asian countries are the highest potential target geographic markets. Brashear et al reported the following: European and Asian online shoppers average almost twice as many purchases as North American online shoppers, and growth in online shopping is faster in the developing markets than in the developed economies. Total e-commerce sales in Japan, South Korea, China, and India were $51 million in 2006 and are expected to grow to $115 billion in 2010. (Brashear et al, 2009).

conclusions
Scribd offer a service that will appeal to certain consumer segments based on intangible as well as tangible benefits. Three market segments were selected for analysis using data, research and our analytic findings. Product and customer value drivers, along with consumer characteristics and traits, were used to derive segment attractiveness. Three year sales forecasts, TAM/SAM estimates and market growth were used to determine the maximum opportunities for each of the potential market segments. All segments were made up of early adopter or early majority consumers, who had consistent Internet access and did information searches and product reviews online. All segments also were comprised of people who had the need or
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desire to read for work or pleasure. This was determined by estimated average number of publications read per year, and the inherent need for books and publications based on career choice and college status. With regard to market potential, revenue forecasts and market size, the more attractive segment for Scribd is the Alternative Online Consumer. This group also better aligns with Scribd value drivers and the Segment Attractiveness score for this group (see Figure 4-2) is higher than the other market segments. This audience will be more responsive to Scribds vision, services, and unique diversity of publications. Scribd is a service, and should take the position of customer intimacy leadership, where positive relationships with customers create lifelong customer loyalty.
SecTion 5

cOmpetitOr analysis

Industry Dynamics
The competitor analysis for Scribd will focus on two main competitors: Amazon and Docstoc. Scribd and its competitors will be analyzed through Porters Model, competitive factors, industry competition, and industry benchmarks. This analysis will give a snap shot of where Scribd currently stands against competitors. It will show what areas Scribd needs to improve in, as well as what areas they are strong in. Porters Model The Porters Five Forces model is included in this marketing strategy for the purpose of determining any potential threats Scribd faces within the market it currently serves. The model will analyze Scribds current position in the market, as well as its current and potential competitors. Since the introduction of Scribd, more and more book retailers have adopted the idea of having digital books available online. Increased competition, the introduction of pricing for digital books, as well as innovative platforms to upload and download books have all provided a basis for this model.

Exhibit 5-1 Scribd First year Porters Five Forces Model (Adapted from Porter, 1980)

Existing Industry competition Since the introduction of digital books, there has been an increase in the number of businesses that are tapping into this market providing services for authors and digital publications for readers. Currently, there are two main competitors Scribd faces in this industry: Amazon and Docstoc. A high level of competition exists among these three businesses because they are all attempting to gain a large market share of e-book readers. In a survey conducted by Mintel (2004), the results revealed in 2000, 11 percent of adults 18 and older bought books online. In 2003, that number grew to 18 percent, as physical bookstore purchases decreased by three percent (Mintel, 2004). A conclusion can be made that book retailers will expand into the e-book industry as they learn it is a growing and is becoming a lucrative market. The e-book industry is growing 100 percent per year (Springer, 2009). Amazon has proved to be one of Scribds most threatening competitors. Although the Kindle offers an entirely different reading experience because of the platform, it is perceived as a threat to Scribds potential customer market. Amazon
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currently provides over 300,000 books for their Kindle platform, and has an average of 65 million unique visitors to the website each month (Amazon.com, 2009). To compete, Scribd needs to introduce more products or services to counter Amazons advantage. An advantage, and disadvantage for Scribd is their pricing structure. Currently, Scribd allows authors and publishers to set their own prices and to receive 80 percent of all profits made from their book sales (Scribd.com, 2009). The authors can choose to set their prices lower, given the higher percentage of return on the asking price. Publishers may not choose to be as competitive as individual writers, which in many circumstances gives Amazon an advantage as they set their own prices. Amazon is discounting many of their books, such as those on the New York Times bestseller list to under $10.00 (Amazon.com, 2009). Amazon sets the price of the books, while only giving a 35 percent share of the revenue back to the authors (Switch11, 2009). The second major competitor for Scribd is Docstoc. Docstoc currently does not charge visitors to download books posted on their website; however, they soon will. We assume Docstoc is also creating a store much like Scribds, where they will also charge readers to download books but it is known what their pricing structure will be. Docstoc has a narrow focus with types of books offered, which include only business and educational publications. This makes Docstoc less of a threat to Scribd. It is important to note that an assumption can be made that although Docstoc does not offer all of the same products as Scribd, they can, and may, change their strategy and expand their categories of books and publications, thus going after a larger share of the market. To stay competitive within the market, companies have had to become more innovative and provide greater depth and value of products and services. Competitors will constantly be searching for ways to update their technical platforms to make the experience of buying and reading e-books and e-publications a more desirable choice. All key competitors may be forced to maintain low prices and expand their technological capabilities. For example, with the Kindle, Amazon provides a digital platform that is not only portable, but also is audible (Amazon.com, 2009). Threat of Potential Entrants E-books have recently become an alternative for readers who normally buy printed books. With the emergence of this new product offering, Scribd faces a large threat of potential entrants. Scribd came out with digital books for free in 2007, and only opened their e-commerce store in May of 2009 (Snyder, 2009). In that period of time, several smaller companies have come out with similar service offerings. It is the larger, previously established companies, with brand names that are well known that provide the greatest threat with regard to sales of digital publications. Sales of books and e-books online dont have the same kind of overhead as brick-and-mortar stores. Because of the significantly smaller start-up costs, it is easier for businesses built around their websites to open a business, and creates greater potential for multiple competitors to spring up. Scribd had an original start-up cost of $12,000 and continually expanded investments to allow the business to grow (Gonzalez, 2007). Also, because of the Scribd business model, which favors both authors and readers, an assumption can be made that new potential competitors will see that starting a business in the e-book industry is financially feasible. Another potential threat for entrants is online book retailers of printed books. Scribds offering can be identical to printed books, as publications uploaded with iPaper look just like the original book or publication, but in digital format. The result is a reduction of market share for these brick and mortar bookstores. According to a Mintel report (2004), There are approximately eight books sold in stores for every one book sold online and an estimated 38 percent of online users purchase books online. If market share decreases, they may be inclined to offer the same services as Scribd to maintain their market share. Large online bookstores such as Barnes & Noble, Powells Books, and Borders who have the infrastructure to sell digital books, are also a significant threat to Scribd. Barnes & Noble has already established an application used on smart phones and wireless mobile devices (Trachtenberg & Fowler, 2009). According to Jeffrey Trachtenberg and Geoffrey Fowler (2009), Barnes & Noble has established an online store to sell books in electronic format, and has also entered into a strategic partnership with Plastic Logic, a firm that makes electronic book-reading devices. Threat of Substitute Products In addition to competition from other book retailers, Scribd faces a real threat with substitutes. A current threat as a substitute product is the Amazon Kindle. Currently, Scribd only offers their books in digital format that can only be read on a computer screen and smart phones. Amazon has introduced a platform where the book or library is portable and can provide a more interactive experience with the reader. The Amazon Kindle also allows the user to download the book and take advantage of an audio feature. Scribd could stay competitive by either creating an innovative product similar to Kindle, that encourages the reader to continue using Scribds products, which seems to be contrary to their vision, and/or enhancing the services they

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currently offer on their website to make it more appealing to read on a screen, such as a laptop or other computer, rather on a handheld device. Other substitute products Scribd currently faces are books on DVDs and MP3 players. Downloading a book in audible format has become incredibly popular. Many customers are reverting to this substitute product because of their desire or need to multi-task. For example, they can listen to a book and work out at the same time. According to the National Federation for the Blind, Approximately one-million people in the U.S. are legally blind and approximately 50,000 Americans lose their vision every year The sales growth and popularity of digital audio players will help fuel audio books market (Mintel, 2004). Scribd needs to be aware there is a need for a substitute product that is audible. To keep market share, Scribd should introduce a feature similar to this on their website, which allows readers to listen to a book. Bargaining Power of customers The bargaining power for customers is very high, primarily because they have opportunities to buy the same product from multiple stores. Scribd encourages authors to set low prices by offering a large return on profits. If Scribd cannot beat competitors prices, the reader can easily go to another source to buy the same book. However, it is important to know that Scribd has created this bargaining power for customers. They have encouraged authors to set low prices based on the price elasticity of the market. Therefore, with the encouragement of Scribd to maintain low prices, customers simply support this business model because it ultimately benefits them in the end. Again, however, larger commercial publishers may not be as willing to discount prices, even with the generous revenue split. Bargaining Power of Suppliers There are two main suppliers that Scribd has leveraged to grow their business. The first supplier is individual authors that have supplied their work without the help of a publishing firm. The bargaining power for suppliers is very high because these suppliers are the only source that supplies the product to the reader. Scribd has allowed the bargaining power of suppliers to be their top priority. The authors have a lot of bargaining power because they have the ability to set their own prices for their books and also have been given an 80 percent profit (Scribd.com, 2009). They also have the choice of whether or not they would like to offer the book for free. Scribd has given these authors a huge amount of bargaining power because they are their biggest vendor. The site has proven to produce a large amount of hits without the charge for books; however, Scribd has been able to see how much traffic has been drawn to this website once they have allowed authors to charge for their books because customers are in high demand for mainstream written materials. The second main supplier is publishers. Scribd has just begun to do business with major publishing companies and has given them a large amount of bargaining power as well. They have allowed the publishers to choose the price for their books with the same terms for individual authors. A conclusion can be made that the reason why Scribd has given major publishing firms the same amount of bargaining power as individual authors is because these books that will be uploaded on the site will attract an enormous amount of customers. Mainstream books will allow the website to become mainstream. It will increase the market share for Scribd and will also expand the target market segment. It is important for Scribd to give a lot of bargaining power to their two main suppliers because they are the ones that drive traffic to the website and maintain readership. Porters Five Future Forces For the second year, the e-book industry is expected to gain more entrants that will further competition with Scribd. iTunes and Google will have successfully implemented an online book stores for readers. Large retailers selling printed books is going to be a huge threat for Scribd as they figure out a way to upload their books online and make it easy for readers to download. The market segments will remain the same for Scribd, but there is a risk they will lose market share with these segments as competitors increase.

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Exhibit 5-2 Scribd Second year Porters Five Forces Model (Adapted from Porter, 1980)

For the third year, there is a possibility Docstoc will no longer be in business as they learn their market is too segmented and business and educational readers can get the same reading materials through Scribd. At this point in time, large book retailers who sell printed books will have successfully joined the e-book industry as they master the technology used to upload and download books. The bargaining power for customers will rise even more as consumers are exposed to more choices when searching for a book online.

Exhibit 5-3 Scribd Third year Porters Five Forces Model (Adapted from Porter, 1980)

Sources of competitive Advantages Price Scribd may be able to create a competitive advantage due to their unique pricing structure. Authors receive a much larger percentage of profits than they normally would if they sold the book through other retail outlets, they are willing to sell their book for a lower price because they still make a large profit off sales. Amazon sets the price for books sold on Kindle platforms, and provides little room for the author to set the price. Scribd has placed itself in the perfect position because they are able to create the greatest customer value by charging a low price but not low enough to make the customer believe the writing is not worth reading.

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iPaper Scribd has perfected its digital platform that allows easy access to upload and download digital documents. Unlike Kindle, where the customer first has to buy the reading device and wait for delivery, Scribd allows the customer to instantly download books. iPaper does not require users to download additional software programs in order to digitally read books. Instead the program is a click away from receiving a book online. This program has also allowed the process of uploading written works from authors to be very easy and less time consuming than others. Open to the Public Scribd has maintained a strong competitive advantage because they give everyone the opportunity to publish their work on the website. Customers are attracted to this website because they are not only exposed to mainstream writings, but are also exposed to unique, individual writers. The beauty of this website is that anyone can be published and not just those that go through the formal process of getting published through a firm. Because Scribd allows everyone to write, they also have a large amount of product offerings. For example, blogs, books, lyrics, and poems can all be posted on this website for the public to see. Scribd has gained a competitive advantage because they have opened the website to the public and have shown their main goal is not to make profits, but to spread the excitement for reading. Competitive Barriers Technology Currently Amazon has increased competition with Scribd with their new portable, digital reading platform: Amazon Kindle Reader. Scribd will eventually encounter a barrier that is caused by technology. The company needs to find a way that can make the reading experience more interactive for the reader besides clicking through digital pages. Amazon has invented a device that reads like a book and can download a book within 60 seconds (Amazon.com, 2009). Technology will eventually become a huge competitive barrier for Scribd as more companies adopt a similar platform as iPaper. Scribd is currently ahead of the technological curve compared to Docstoc because they have created a program that is hassle free for uploading and downloading books. However, once companies, such as Docstoc, create programs similar to iPaper, what is the next technological move going to be for Scribd to stay competitive? Plagiarism Plagiarism has come to be a competitive barrier for Scribd as users have figured out they can upload other peoples works and receive profit off of those sales. Authors are becoming more hesitant to use this program because they face the possibility of people plagiarizing their work. For example, if a book is put in digital form for the first time, it is much easier for people to copy and paste their work onto another website and start earning profits. Amazon has been able to overcome this problem because the book can only be uploaded on the device which does not have a copy and paste function. Also, Amazon reviews all books uploaded so they are able to see where the content is coming from (Amazon.com, 2009). Currently Scribd is trying to break through this competitive barrier by encouraging readers and authors to report writings that could be plagiarized and have created a program that scans all saleable content (Slattery, 2009); however, with over 35 million words uploaded, Scribd is chasing a problem that is moving at a much faster rate than they are (Scribd.com, 2009). commitment to Market The last competitive barrier Scribd faces is their commitment to the market. Scribd is brand new to the market, and many concerns have been voiced in terms of credibility and reliability. Every new company faces the problem of needing to build trust with the customers before they can become successful. Right now, authors are unsure of how long Scribd is going to stay in business, so they are hesitant to post their documents if this website is not reliable. An assumption can be made that authors are hesitant to post their work because they do not know how credible the site is. consolidation The potential for a Scribd merger or acquisition is moderately high. In addition, Scribd is currently seeking a partnership with Amazon to use the Kindle as an additional platform for downloading (BUSINESS WEEK). An assumption can be made that an acquisition by Google or Amazon might also be a possibility in the future.

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Partnerships/Alliances Scribds primary partnerships will be major publishers. Scribd has recently partnered with Random House, Simon & Schuster and other major publishers (Snyder, 2009). Scribd has negotiated with publishers to have selected books for free, and others for sale. The free offering will drive traffic to the website, and pull the readers by, in essence, seeding the product. The publishers will bring in a greater market share for Scribd as they expand their current market to include mainstream readers. According to Chris Snyder (2009), Publishers hope to boost both print and e-book sales through e-book sharing and word of mouth. Other major partners listed on Scribds website consist of the following companies: Environmental Health Perspectives Harvard University of California Fox Business Ford The MIT Press Duke Medicine The Atlantic Monthly Marriot Ford Datamonitor Dublin Chamber of Commerce Workman World Economic Forum Berrett-Koehler Publishers The New York Times TechCrunch Baltimore Police Carnegie Endowment for International Peace Cato Institute (Scribd.com, 2009) Value Chain There are three steps in the value chain that Scribd completes to gain a competitive advantage. With their popular website and user-friendly platform (iPaper) in place, Scribd first begins collecting written material from the public. They encourage anyone who has passion for writing to upload their work. The written documents, in this case, are the inventory or input of materials. The second step Scribd completes to add value to the product is publishing it into a readable format for consumers. This step can also be considered outbound logistics, as it takes the finished product and gets that product to the customer. Marketing on the website includes featuring books people are currently reading, books for exploration, and exclusive first looks (Scribd.com, 2009). Authors do not need to manage this section of value chain activities. The third step in the value chain is provision of reader and author services. This includes a system they have developed to curb plagiarism. Toward that goal, if someone other than the author is selling a book, Scribd immediately removes it from the site. Site maintenance and improvements, and customer support are key services that add value for customers as well. The last step Scribd completes in the value chain is marketing and sales of the product, such as featuring publications. The site also has a free book search function for readers. In addition, Scribd has significant public relations history, and the numerous articles published about the company drive traffic to the website. Business Ecosystem This table illustrates all of the customers, suppliers, competitors, and partnerships that work together to create an ecosystem for the e-book industry. This table summarizes the core factors that allow the e-book industry to be successful.

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Exhibit 5-4 The Scribd Business Ecosystem (Adapted from Magniez, 2009)

Three main areas make up the business ecosystem that supports the industry for e-books: Core Enterprise, Extended Enterprise, and the Outer Business Ecosystem. The first, Core Enterprise, is comprised of the direct suppliers and channels that allow this industry to flourish. Publishers, authors, and media companies make up the suppliers because they provide written material that can be sold and distributed over the Internet. The distribution channel that is used allows information to be passed via Internet. The Internet encompasses the websites that booksellers use to upload and download books for readers. The second section of the business ecosystem is the Extended Enterprise. This section consists of direct customers, which include Scribds three main market segments: Internet-savvy college students, career-oriented professionals, and alternative online consumers. They use the services offered and build traffic for the website. The last section that makes up the business ecosystem is the Outer Business Ecosystem. This section includes investors, partners and stakeholders that are involved in the e-book industry. Scribds partners and investors are listed in this outer portion. Also within this section are Scribds current competitors. These are classified as stakeholders. All three areas work together to make up the business ecosystem for e-books. Each factor listed within the model has a stake in the e-book industry. If one factor changes, other factors will change within the ecosystem as they all work off of each other to create a successful industry.

competitive Factors Mapping


Key competitive Factors and Strategy canvas Competitive factors are determined based on what the authors of this paper feel customers look for when buying an e-book from Scribd, Amazon, and Docstoc. Economic, performance, supplier, buyer motivation, and buying situation value drivers were used to rate the companies on the how much they offered these drivers to customers. It also shows a comparison of how each company is doing competitively within the market. After the competitive factors have been chosen, each company is rated from a scale of one (lowest offerings) to five (highest offerings). These weights are then plotted on a Strategy Canvas, which create a value curve for each company. It is a visual representation of how each company is doing for each value driver from the customers perspectives. This Strategy Canvas is used to figure out competitors strategies for how they stay competitive within the market, as well as how they determine where they need to improve to offer more to the customer (Kim & Mauborgne, 2002). Below is a description of what each competitive factor examines within each company.

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Delivered Initial cost The delivered initial cost looks at additional costs the customer encounters when entering into the market and does not consider the cost of the books yet. It examines accessories or membership fees that need to be bought in order to read the book. Flexible Price Structure Price is a key factor for consumers, when deciding to make a purchase and who to purchase from. If one companys e-book provides a very similar reading experience and searching experience as all the others, the deciding factor will, most likely, be price. Consumers continuously seek a product that has high perceived value at a low cost. works on Multiple Operating Systems The website needs to be user-friendly for the customer. Ease of use is a key advantage. A website that is simple, easy, and fast will ensure the best results for authors that upload their work. Companies should be competing to find the easiest way for authors to upload their works because they know this industry can be easily substituted by the traditional methods of printing. Shared values The philosophy that breathes within the community is dedication to the written word. The more dedicated publishers are to writing and the creative process, the more likely they will provide a positive experience and environment for the author. If a company is only concerned with maximum revenue, easy sales of mainstream books and publications, it doesnt value its contributors and their contributions, they run the risk of alienating authors, who may go elsewhere. By co-creating the experience with their customers and partners, companies can create customer intimacy and shared value. credible Source If a website is notorious for people gathering and plagiarizing written pieces, a customer is less likely to use that service. Also, if the website lacks safety in regards for plagiarism and the purchasing process, the websites reputation may be tarnished. This could lead customers to purchase elsewhere. Platforms that make it easy for readers to download and authors to upload, also make it easy for plagiarism to occur. A website with the best security measures that monitor and react quickly to copyright infringement gain a huge competitive advantage. Authors require a safe place to share their work. Sense of community This competitive factor looks at the networking opportunities and the culture each company creates through the buying and selling of e-books. It looks at the level of opportunity consumers have to interact with authors and share pieces writings with peers, family, or colleagues. Unique Needs are Met Customers look for specific writings that will fulfill a certain need or want. This competitive factor examines the variety of literature each company offers to its customers. Specifically, it examines if the company has a limited or large amount of product offerings that can expand market share. Product Availability Consumers seek a retailer that can provide literature that fits within their interests. It is a competitive advantage with the online consumer segment to have a large variety of publications. All three competitors supply different focuses on the type of reading material they offer. Amazon focuses on mainstream books published by large publishing firms. Docstoc supplies reading materials that fit in with business and education. Lastly, Scribd supplies all different types of reading materials ranging from mainstream, business, educational, or purely entertainment. Purchasing Experience Readers are switching over to e-books due to the ease and speed of purchase and immediate download. The Scribd website, along with Amazons website, is easy to use, easy to search and easy to purchase from. Amazon can download a book to the Kindle within 60 seconds (Amazon), which has given them a competitive advantage over other e-book suppliers. Readers can substitute the digital book for a printed book, but that requires travel time to and from the store, shopping and purchasing, which may involve waiting in line. The online printed book ordering process also takes little time, but delivery date is dependent on shipping and handling.

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The table to the right is used to compare Scribd, Amazon and Docstoc with regard to how much they offer the customers for each competitive factor. It summarizes each competitors current offerings to the customer for each factor listed. It is used to determine the weights for the Strategy Canvas following this table.

Table 5-5 competitive Factors customer perspective (Source: Adapted from Chan & Mauborgne, 2002)

The Competitive Factors table is used to score each competitor based on how much of each competitive factor they offer to the customer. This table takes qualitative data from the table above and turns it into meaningful numerical data that can be used to rank each competitor based on their amount of offerings. The weights are used to create the Strategy Canvas following this table.

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Table 5-6 competitive Factors weighted Averages customer perspective (Adapted from Chan and Mauborgne, 2002)

This graph illustrates visually how each competitor varies in terms of competitive factors. The Strategy Canvas takes the weights from the table above and creates a value curve. This is a visual representation used to show where each company is exceeding and lacking in certain areas.

Figure 5-7 competitive Factors comparison (Adapted from Chan and Mauborgne, 2002)

conclusions from Strategy canvas From the customers perspective, Scribd has the strongest competitive advantage in terms of weighted averages. However, they need to focus their efforts on creating a more enhancing and interactive digital experience for the customer. This will enhance the purchasing experience. This is one of the most problematic areas for Scribd because the technological industry is rapidly changing and new entrants with bigger and better technologies are gaining way over companies that have been in the industry longer. Scribd needs to find a way to make the purchasing experience

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easier for the customer in order to gain a competitive advantage over Kindle. Scribd is very competitive in the market; however, there are many areas in which the product can improve in. The customer seems to be most interested in the technology the product has, and dominates the field in purchasing experience as well as variety in literature. These are important aspects Scribd should focus strongly on because the ability to substitute Scribd with other products is very high. Examining the value curve, it is clear Scribd has the potential to be the market leader for e-books, but there are some problematic areas they need to attend to. Scribd needs to work on plagiarism to build credibility. This will attract a large market share as well as large publishing firms who are looking for an outlet to reach millions of readers. If Scribd can master the art of building credibility, they have a strong chance of maintaining or expanding their customer and supplier base. competitor Profiles
AMAzON

Headquarters and facility locations, number of employees: Amazon Headquarters is in Seattle Washington. Amazon employees 20,700 employees worldwide and participates in over 34 different industries. Products, market reach: Amazon web site offers millions of books, music, and movies these items account for most of Amazons sales revenue. Amazon has started to break away from its core business of media and has stated to move into selling auto parts, toys, electronics, home furnishings, apparel, health and beauty aids, prescription drugs, and groceries. Amazon has also made it easy for the consumer by allowing the purchaser to purchase with a one click shopping basket, Amazon has also made it possible for the consumer to download books, games, MP3s, and films to their computers handheld portable devices, and smart phones, including Amazons own portable reader, the Kindle. (Hoover.com, 2009) Amazon has worldwide reach due to It is the largest e-commerce company and the leading online shopping site in the world. The companys retail sites include Amazon.com, Amazon.ca, Amazon.de, Amazon.fr, Amazon. co.jp, Amazon.co.uk, Joyo.com, and www.endless.com. Amazon.com operates retail websites and offers online programs that allow third parties to sell on their website. The company also provides services for third party retailers, marketing and promotion services, as well as web services for developers. In addition the company also operates other websites such as www.a9.com, www.alexa.com that enable search and navigation. Amazon also has other numerous website like www.imdb.com which is a comprehensive movie database. Amazon has also purchased The company operation are divided into two main segments: North America and International. The North American division handles online retail operations in the United States and Canada, while the international division manages online retail operations in the UK, Germany, Austria, France, China, and Japan. The company has established long term relationship with a number of strategic partners such as America Online, Yahoo, Excite, Netscape, GeoCities, AltaVista, @Home, and Prodigy. Growth Strategy The main growth strategy includes constant device updates to improve the reading experience and break the barrier between reading a digital book and a traditional book. They improve their technology continually to enhance the reading experience and maintain a competitive advantage. Amazon continues to provide more services to the reader with each device update in order to attract more customers to grow the company. Market Position, Reach and Marketing Objective Amazon is the current technology leader in wireless reading devices. They have continually improved their product to create a better digital reading experience. The company strategically positions themselves to have a continually expanding library through Amazon.com. Amazons market reach is global and universal. Technology and Innovation Amazon has reinvented the reading experience through their wireless reading device, the Kindle. Although they are not the only company to produce this type of device, Kindle is leading the industry with their newest device called Kindle DX. The new device is thinner and lighter than their old device, and has advanced antiglare screen, along with page turning abilities to make for a more traditional reading experience (Amazon.com, 2009).

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Financial Position Amazon had operating revenue in 2008 of $19,166,000 which was up from their 2007 operating revenue of $14,835,000. The company also has a positive cash flow of $985,000. Docstoc is a venture-backed company with current funding around $4,000,000. Most of their funding is through Rustic Canyon Partners (Crunchbase.com, 2009). Strengths and weaknesses Amazon digital books and publications strengths include innovative industry-leading technology, an easy-to-use device, easy access to e-books through their already established large e-commerce site, and the financial backing and infrastructure of Amazon. A weakness of Amazons Kindle is the start up cost for the reader, which includes the cost of a Kindle in addition to the price of e-books. Amazon struggles to lower the cost of a Kindle device to the customer, due to the high cost of production.
DOcSTOc

Headquarters and facility locations, number of employees: Docstocs headquarters is located in Santa Monica, Ca; which employs seven employees (Hoovers.com, 2009) Product Docstoc offers a service very similar to Scribd, but company, its library and leadership is much smaller. Docstoc concentrates their service to cater to business professionals. Docstoc offers free business and legal documents, along with resumes, creative, and educational documents. Docstoc is known for their blogosphere, embedding, and mainstream media. (Scribd.com, 2009) Growth Strategy Docstocs growth strategy is to expand their document database and user data base, both new and continuing users. Docstoc also is in the process of innovating new technology to improve their viewing, formatting and embedding functions to differentiate their site from competitors. These technology advancements make their site a more desirable space to view and store professional documents. Market Position, Reach and Marketing Objective Docstoc has geared their market position towards being the professionally lead document storage website. The companys objectives include continuing technology innovation to support the needs of educators and business professionals, along with improving readership. Docstocs market reach includes business professionals, educators, students, and some leisure readers. Technology and Innovation Docstoc has improved their technology to have better embedding functionality. The company is constantly improving their platform to compete with iPaper. They also supply technology advancements through API and widgets. (Docstoc.com, 2009) Financial Position & Partnerships Docstoc is a venture backed company with current funding around $4,000,000. Most of their funding and industry expertise comes from Rustic Canyon Partners with $3,250,000 raised. Other investors include Scott Walcheck, Brett Brewer, Robin Richards, Matt Coffin, Crosscut Ventures (Crunchbase.com, 2009). The company reported revenues of $300,000 in 2008 (Hoovers.com, 2009). The company primarily makes its revenue through advertising, and has not yet begun to obtain revenue through document sales or memberships. Pricing and cost Structure & Distribution Docstoc is currently a free space to store your documents and published work. Docstoc is a self distributing site where you can obtain others work, or self distribute your own. Although Docstoc is currently free, it is presumed by our team the site could open a store to sell documents and other published materials in the future.

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Table 5-7 company Strategy, Brand Position, Growth Strategy, and Market Strategy by competitors (Source: Jaclyn Tiedemann, 2009)

conclusions from company Strategy, Brand Position, Growth Strategy, and Market Strategy As seen from the table above the three industry leading companies strategies all contain increasing their library content available to their consumers, though each has a different focus with regards to how they want to attract more customers. Scribd is looking more towards building relationships compared to Docstoc selecting the business section for their target, while Amazon is trying to turn the Kindle into a commodity. These unique focuses contribute to how each of the three companies have positioned themselves within the industry. Through a growth and market strategy of continually innovating their technology, Scribd hopes to continue building relationships to help become the go to site for individuals with unique needs. With a strategy to improve technology to enhance their storage and protection capabilities, Docstoc expects to position themselves as a professional website for business users. As for Amazon, their strategies align with providing the most available content to consumers with the highest quality mobile reading platform distribution. This gives Amazon the brand position within the industry as creating high quality digital reading experiences everywhere consumers venture. Disruptive Potential Disruptive potential to both Kindle and Docstoc is the treat of new entrants in the market. Many companies are beginning to enter the cloud computing, and inventing new technology to view documents through the computer and through wireless devices. The major disruptive potential is that e-books is a relatively cheap industry to enter, new technology and integration or consolidation can easily sway consumers motivations and value perceptions, along with their buying situation. Google has recently established their plan to enter the e-book market, Google already has made available their 1.5 million public-domain books. Google has made these books available to read through Kindles immediate competitor the Sony reader (Rich, 2009). competitive Benchmarks Best in class Currently within the e-book industry, Amazon still manages to stay best in class regardless of Scribds effort to take their market share. Scribd needs to become as innovative as Amazon in terms of products and services offered. To ensure competitiveness, Scribd needs to be improving their current products and services and searching for innovations that can make them best in class. Scribd is best in class in regards to reading a book on a computer; however, they need to adopt a technique that can allow the reading experience to become more portable. Best in class companies are using the following strategies to maintain market leadership: Continually innovating to make the reading experience more interactive and exciting Responding to changes in customer behavior by changing both products and services offered Simplifying the uploading and downloading process for the author and reader Leveraging assets to produce the largest return for their website Managing books uploaded to reduce plagiarism

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The table below is used to analyze where Scribd and its competitors currently rate for best in class strategies. The table weights each company based on how much they have contributed to being best in class (one is low, five is best).

Table 5-8 Best in class Rating (Source: Bianca Shedd, 2009)

With regard to technology, Amazon and Scribd are best in class. Amazon has been able to produce a technology that allows the reader to read a book on a light, portable, high quality platform and create an interactive reading experience. They have set the benchmark for innovation and product line extension. Scribd is also leading in this category because of their technology platform, iPaper. Except for Amazon, all of the companies are lacking in the product and service changes in response to customer behavior. Amazon has set this benchmark as they prove they can make changes to the Kindle that will make the device more user-friendly and entertaining to the reader. Amazon Kindle has come out with multiple upgrades since their first release. Scribd, on the other hand, is making changes to iPaper to enhance the reading experience, but they need to offer more services to the reader in order to maintain market share. Another area that prevents Scribd from being best in class is their lack of leveraging assets. Scribd has yet to fully integrate a CRM system into their business processes, which is a major asset they are not taking advantage of. Scribd needs to examine what they have at hand, and find a way to use it to their advantage. All of the current competitors are exceeding or improving on these best in class strategies; however, it is a race for who can accomplish these strategies first. These best in class strategies form the positioning of the product in the consumers minds. As more businesses are beginning to adopt e-books, it is important to constantly work to maintain best in class strategies. Amazon has set the bar for best in class with a total rating weight of 23.5. This should signal to Scribd they need to restructure their business to find a way to be best in class in all areas. competitive Gaps After analyzing where Scribd currently stands in terms of competition, the next step is to determine where the group wants Scribd to stand in the upcoming three years. It is discovered Scribd needs to work on three things to become more competitive within the market: technology, plagiarism, and services offered. The goal is to make Scribd an industry leader and to stabilize their position in the market as more companies enter such as iTunes, Google, and large printed book retailers. There is a competitive gap in technology. As mentioned before, iPaper is currently a leading edge technology; however, as more companies adopt a similar platform, Scribd needs to create a competitive gap with them by introducing a device that is similar to Kindle. Through the introduction of a device, Scribd will be a bigger competitor to Amazon and has the potential to gain part of their market share. The second gap is plagiarism. Scribd needs to continuously improve on their speed of their scanning technology. Currently, books are being downloaded at a much faster rate than the copyright technology can scan. By creating a flawless copyright technology, Scribd has the potential to gain more suppliers, specifically publishing firms. If Scribd can decrease plagiarism, they will become more competitive as publishers see they can gain more profits on books on a platform that is just as safe as Amazon.

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The last competitive gap is services offered. Currently, Scribd only offers services for customers to download books in digital, reading format. It was discovered earlier, Amazon offers books in digital reading and audio format (Amazon. com, 2009). If Scribd wants to compete with Amazon, they must introduce a service that allows readers to listen to books online. Scribd needs to be in a position where they offer just as much or more than Amazon in order to gain position in the e-book industry. Referencing the Strategy Canvas, Scribd needs to go from their actual state (Figure 5-5), to their ideal state, which is having ratings of five for all competitive factor offerings.

conclusions
As the online document sharing industry continues to unfold, Scribd needs to continually adapt to the fast changes likely to occur. Currently, Scribd stands very strong among their main competitors which include Amazon and Docstoc. Their core competencies and value they provide to their segmented market have awarded Scribd with a high volume of website visitors whom are potential or current consumers of Scribds offerings. Their disruptive technology has allowed Scribd to build market share and brand identity among the industry. This innovative technology focus needs to continue for Scribd to maintain this advantage as well as stealing wallet share from competitors like Amazon by creating or co-producing a mobile reading platform of their own. Through startup capital Scribd took advantage of being able to attract traffic to their website. They improved their brand awareness and differentiated themselves from their competition, while only recording revenue through media ads on their site. This has helped provide them with a competitive position within the market that aligns to their vision. They have become known as being the place where everyday individuals can publish their work and readers gain access to an assortment of written work not available anywhere else. Some have referred to Scribd as the YouTube and iTunes of written documents (Gonzalez, 2007). As Scribd has matured, they have begun to take advantage of the opportunities within the e-book industry by setting up an online store that allows readers to purchase written work (Synder, 2009). The 20 percent share provides Scribd with another source of revenue to allocate to technological improvements (Scribd.com, 2009). Going forward, Scribd and their competition face many factors that will affect the competitive market. The first of which is technology. As new and improved technologies come about, Scribd, Docstoc, and Amazon as competitors will not only have to worry about one another but new entrants into the industry. Companies with valuable brand names similar to Barnes & Noble, provide a substantial threat if they are able to produce the necessary technology to compete in the market. For Scribd to ward off potential market entrants and gain share within the current market, industry barriers need to be strategically placed. This involves key partnerships with leading publishing, media, and other value added companies who only distribute their offering through Scribds site. Through partnering with the likes of Simon and Schuster, Harvard, University of California, and NY Times for example, they have started to build their wall on the barrier of new entrants and increase their current share in the market. Scribd needs to gain as many valuable partnerships as possible, as others enter the e-book market. As iTunes and Google begin to enter into this market, Scribd needs to take these proactive steps to keep their customers from switching to well known industry giants. Google and iTunes have already established a very large customer base and have successfully implemented additional services that consumers have adopted. With the addition of companies to the e-book industry, Scribd must continually find ways to provide more value to the customer so they can prevent switching to another competitor.

SecTion 6

net assessment
The marketing net assessment is derived from the previous sections of the marketing opportunity analysis, including the Business Overview, Technology Assessment, Market Analysis, and an in-depth Competitor Analysis. In our exploration, we have uncovered key areas that need Scribds continuous focus to establish growth and sustain success. Scribd has an unmatched file sharing platform, (CrunchBase.com, 2009) which is the foundation to becoming an industry leader in the online document sharing industry. As seen in the technology assessment, the iPaper technology demonstrates a universal approach to customer value. The technology creates value for users of various viewing platforms. Users can read a book or publications off their smart phone, 13-inch computer screen or their 74 inch HDTV. No other technology allows consumers as many viewing options as Scribd (Scribd.com, 2009). Within the Business Overview a Feature-Advantage-Benefit comparative assessment was evaluated for both the readers (downloaders) and writers and publishers (uploader) of digital publications. The features for the downloaders include the iPaper multi-platform capabilities, the ease of the website, the reading experience, and embedding capabilities. Features benefiting writers and publishers are pricing strategy, where authors and publishers set their

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own price and enjoy an 80/20 split of revenues from publications sales, the multi-platform distribution, preview structure, and free sample books to entice readers to purchase the writers other works. Available features from Scribd were compared with Amazon. It was also found in our Market Analysis, that Scribd and Amazon provide similar features and benefits to uploaders, however, Scribds features and benefits are more in line with customer value drivers. A strategy canvas was created to measure the customer value drivers that are most important to Scribds customers, how they currently compare to Amazon and help to indicate where Scribd needs to strengthen its efforts moving forward. These value drivers and relative importance led to the development of a Value Proposition, which, again, is: Scribd is the premier innovative global publication resource that fosters and inspires a culture where all writers and publishers thrive, thereby expanding its customer base and creating profitability. In our market analysis, we introduced three potential market segments to determine which would be the most profitable and best target for Scribd. The three segments are Internet-savvy College Students, Career-oriented Professionals, and Alternative Online Consumers. Table 4.2 highlights the market potential for each of the three segments. The total available markets (TAM) for all segments is 53,867,506 potential buyers with a total served available market (SAM) spending potential of $1,334,628,048 billion. Of the three segments, the Alternative Online Consumer showed the most market potential, with $100,631,962 million of revenues the first year, $193,485,074 million the second year, and $292,391,308 million in year three. This segment also aligns best with the customer value drivers associated with Scribd. As stated in the market analysis, Scribd needs to take the position of the customer intimacy leader (Harmon, 1997) to form positive relationships increasing customers lifetime value. In the competitive analysis we compared Scribd and its two most significant competitors, Amazon and Docstoc, on how each fared based on key competitive factors. We assigned weights to the factors which included delivered initial costs to the consumer prior to the publication purchase, pricing structure flexibility, platform function capabilities, shared values, credible source, sense of community, unique needs are met, product availability, and the overall purchase experience. Using this approach we found Scribd to have the highest overall weighted average rating at 4.4, followed by Amazon at 3.5 and Docstoc at 2.9. Using these weighted averages, a strategy canvas was created, highlighting those areas Scribd needs to focus on. While out performing both of their competitors for most value drivers, Amazon rated slightly higher in its perception of credibility. By addressing this issue Scribd will have a strong competitive advantage in customer perception. Scribd has entered a rapid growing industry currently dominated by Amazon. Scribd was able to gain entry and quickly steal share from Amazon and Docstoc through the introduction of the iPaper technology. This was a disruptive technology to the industry and has awarded Scribd a strong presence in the written document file sharing market. Scribd must continue to innovate to build barriers for other entrants and to continue to compete in the market. Through our research and analysis we have concluded that Scribd is a viable player in the e-publication industry, and more so as the largest online social publisher. Scribd offerings align very well with the customers value drivers in their targeted market, and their iPaper technology maintains top position as the platform to beat.

SwOT Analysis
This section provides further assessment of Scribd and their competition within the online publishing industry. To understand each aspect of the company and industry, a SWOT analysis has been created. A SWOT analysis is the summary of all the situational forces that provide current and future strengths, weaknesses, opportunities, and threats that have been uncovered in the previous sections (Best, 2007). With this analysis an assessment has been made regarding Scribds current situation and what needs to happen to move forward to stay aggressive in this highly competitive market. This exploration generates an overview of where Scribd currently stands in the market. This analysis also provides a focus on their external environment, in order to understand what lies ahead in both potential opportunities and foreseen threats. By being aware of potential market opportunities, Scribd can initiate penetration strategies to maximize potential profits and market share. This also helps to minimize risk and allows Scribd to create strategies to eliminate future potential threats.

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Exhibit 6-1 SwOT Analysis Table (Source: Kurt McDonald and Team)

Strengths From our Technology Assessment we have found that one of Scribds major strengths stems from their technological innovation with the iPaper platform. iPaper is a rich document format built for the web. Built with Adobe Flash, iPaper will display documents in the same way regardless of whether youre using Windows, MacOS, or Linux (Scribd, 2009). This disruptive technology allowed them to enter the document file sharing market with an advantage over any of the big players in the industry. As a result, Scribd has been able to establish market awareness and credibility. Another benefit their technology awards them is the ability to reach their market segment easily through worldwide distribution with multi-language capabilities. Any individual currently residing in the U.S. that has access to the Internet is able to receive the benefits Scribd has to offer. As the Internet culture grows globally, Scribds market potential will continue to increase. As the market has evolved, the attitudes and expectations of consumers have migrated towards an I want it now mentality. The desire for immediate gratification is beneficial to Scribd because it aligns with their current offerings. Scribds investment capital gives them strength over companies like Docstoc and new market entries by providing them with resources for R&D to continue to innovate. This also allows them an opportunity to compete with the market dominant players like Amazon. Other strengths include Scribds ability to attract high profile publishers, which increases the value their customers receive. Attracting publishers and authors with allowing control over pricing and an 80 percent revenue share, aids Scribd in establishing key relationships with value added resources. Scribds pricing flexibility provides them with an advantage over competition in regards to customer satisfaction, through allowing customers to preview documents, along with the ability to purchase segments of written material. The indexing and embedding technology also provides benefits to both their partners and customers. Search functions for customers are made easier with their indexing technology. Partners may embed a preview of their written work on another social network that links back to Scribd, allowing for further reach and quick purchase access. As the only company to currently offer embedding capabilities, this gives Scribd the ability to increase their market share while competitors work to develop similar technology or to improve upon it (CrunchBase.com, 2009). weaknesses Although Scribd documents can currently be read on smart phone platforms, they do not offer a portable device similar to the Kindle platform, which allows users easy access to publications. Providing a specific smart phone
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application would be attractive to the large number of smart phone users, taking away some of the need for a mobile reader device such as the Kindle. Though Scribds innovative technology has awarded them some brand awareness, Scribd holds a very small percentage of the revenue-providing e-book market. Competitors who have established brands and multiple streams of revenue dominate this market. This provides the competition with capital to continue to improve their current offerings. As Scribd attracts more publishers and writers they will be able to increase both brand awareness and revenue. Currently, Scribd gains most of its revenue through advertising placements on their site, but must shift the balance of revenue income to publication sales, to avoid being perceived as too commercial, and less customer-centric. Another weakness for Scribd is not having a mobile reader such as the Sony E Reader or the Kindle. The mobility offered by a reader device is of great value to consumers who are constantly on the go. Without a mobile reading device, Scribd not only loses potential revenues from product sales but also cannot create switching costs for current customers, which can deter customers from moving away from Scribd. Scribd would also benefit from deeper use of customer resource management (CRM). Though now recognizing repeat customers, Scribd is far behind their competition when it comes to providing customer value through CRM functions. Scribd needs to focus more on one-to-one marketing with potential and current customers. Using database software, Scribd can improve upon these functions, directly enhancing on site search functions. Currently the site lacks a well functioning algorithmic model. The search process can be more time consuming than it needs to be, which decreases value to the customers. Public relations and word-of-mouth appear to be Scribds only current marketing efforts. Though highly beneficial, Scribds marketing presence in and outside the industry is minimal. Scribd is not taking advantage of the opportunity to obtain valuable customer information to assist them in developing a marketing strategy that aligns best with their target market. A current presence on social networking sites, Facebook and Twitter provides Scribd with little marketing return since the sites lack exciting and engaging content. There is no real branding integration to promote viewers to visit the site or become customers. There is a traditional news page on the site which features articles written about the company, but little else. Opportunities The e-book market continues to increase on average 10.6 percent annual, from around 16 percent of U.S. book sales (Mintel, 2004). As more individuals move to virtual readership, Scribds market potential will have a positive upward trend. Attracting the virtual readers early adopters, will provide Scribd with key influencers in the migration process from hardcopy to virtual formatted reading. Scribds current technology advantage and culture offer them an opportunity to attract a large amount of writers and publishers. As mentioned in our competitor analysis this would help increase publication inventory, providing a greater value to Scribds customer base. Scribds brand equity will rise as more publishers partner with Scribd. Becoming a well recognized site will make Scribd a necessary place for publishers to reside. The growing segment of consumers who support sustainable living (green consumers) can also boost brand awareness, and provide additional potential customers. Smaller businesses and educational institutions may try to save on print and paper costs, while consumers move away from tangible publications to e-books and portable reading devices. To better reach this segment Scribd is currently in negotiations with Amazon for distribution rights on Kindle devices (TechCrunch.com, 2009). As mentioned in previous sections, Scribd needs to focus on the production or partnership for a portable reading device of their own. Having the technology to allow for viewing work on the Kindle and their own reader would eliminate switching costs for current Amazon customers. This will help in pulling market share from Amazon in both e-publications and reader device purchases. By creating more value to the consumer with a mobile reading device, Scribd would also improve motivation for partners and writers to publish their works with Scribd. The education and small business market provide even more potential than those trying to save on costs. From our market analysis, a subset of these two segments represents a $335,755,990 revenue potential for Scribd. Teaming up with universities and educational publishers is an untapped profit pool opportunity, Scribd can take full advantage. By aggressively working to lock up partnerships with book and media publishers, Scribd would create a greater opportunity to allocate revenue, along with decreasing potential competitive threats of losing those partnerships to competitors. Again, this would increase inventory of available offerings to customers and increase advertising demand for the website.

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An intangible service and multi-language capabilities, provide Scribd with an opportunity for global expansion. This would provide Scribd with a vast number of potential new consumers and partners. Established Internet countries provide an immediate market opportunity for Scribd to enter, while the growth of global Internet access cements future opportunities in underdeveloped markets. Threats A large issue that threatens Scribds future success is their limited ability to protect their writer and publisher partners copyrights. A foundation of Scribds business model is allowing anyone and everyone to publish and share their work. If partners do not feel safe publishing on the site, it could be difficult to maintain and grow these partnerships. As seen in our technology assessment, Scribd is currently addressing this issue. Another threat is the introduction of disruptive technologies by competitors. The market Scribd launched into is dominated by large players. These competitors have the resources for research and development (R&D) to find ways to replicate Scribds core competency of platform integration with their iPaper technology. If duplicated, competitors may introduce new products of value to Scribds target market. From our competitor analysis we discovered Scribds competitors to have greater brand awareness and brand equity, which could be used to lock down contracts with partners, who can provide additional value driven product innovation. To stay ahead of this curve, and remain competitive, Scribd has to increase revenue thereby increasing investments. If investors feel Scribds potential for success is low they may limit their funding. This would drive an increased focus on revenue, taking away from important R&D investments. With todays economic challenges, the dramatic slowing of local and global economies, consumers may conserve dollars and switch their buying behaviors. This may include buying less and downloading more free publications, lowering revenue from a key driver. This, along with smaller amounts of investment dollars may cause Scribd to consider acquisition by a competitor. critical Factors Scribds SWOT analysis highlights areas where Scribd is currently strong along with those having room for improvements. With the SWOT analysis completed, there are some areas of great opportunity and some areas where Scribd needs to take precautions to properly mitigate possible negative issues. These steps are outlined in this section, first the risk factors are analyzed and suggestions are made for mitigation. Second, the success factors will be analyzed with a discussion of how to leverage these factors. Risk Factors Upon completion of the SWOT analysis, it is clear there are major weaknesses and threats that present themselves as risk factors. The table below outlines these aforementioned risk factors. In any business, having multiple revenue drivers is important. A businesses health is usually based on the amount and frequency of revenue coming into the business. A potential issue for Scribd is that their revenue comes in the form of sales from the Scribd store and minimal on site advertisements. Of the store revenue generated, Scribd retains 20% of the sale of each document. To mitigate this, Scribd could create more revenue streams. In-text advertisements, a portable reading device, and or more unique offerings such as monthly subscriptions, may help Scribd diversify. This would help mitigate the risk of relying on two core revenue streams. With a new company, there is always a period of time where the new company has to work furtively to establish their brand awareness and build their brand equity. This is an area where Scribd can most definitely improve. Scribd has been established since March 2007 and has Amazon as a competitor, so its a market where theyre competing against a household name to be noticed. If Scribd can continue making their exclusive deals with publishers, they are making definite strides towards increasing brand awareness and building brand equity. Integration into social networking sites, and increased marketing will provide Scribd with highly valuable brand awareness. With Amazon and Docstoc as the two major competitors, with minimal market barriers to entry, Scribd is in a highly competitive market. Docstoc has a website that emulates Scribd, without having a store element. Amazon offers over 300,000 books, as well as a dedicated e-book reader. In this highly competitive market, Scribd has an advantage against each of these competitors with their innovative technology. Scribd must continue to innovate to stay ahead of the curve, in providing the most useful and value added technology within the market. If Scribd can continue making exclusive deals with publishers and develop their technologies, they can maintain their competitiveness in this highly competitive market. Scribd was able to enter this market with their disruptive technology. There is always the potential for current competitors or new entrants to mix up the industry through duplication or new product innovations.

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The following table describes Scribds risk factors, how to mitigate those risks, and metrics to track them.

Table 6.2 Risk Factors Scribd (Source: Scribd team, adapted from Harmon, 2007)

Success Factors This growing company is in a prime state to strengthen their current value drivers and tap into the potential opportunities within the industry. With over $12 million in private funding the revenue streams are beginning to open up with the release of the Scribd store and signing of major publishers (Crunchbase.com, 2009). The resources needed to drive growth and promote success are present. Scribd must now find the most effective strategy to suit the needs of their customers and this growing industry. iPaper technology currently leads the way in this industry with easy uploading and downloading, documents are converted to iPaper without having to change fonts, layouts, or original artwork. This feature intertwined with millions of people with the ability to freely go onto Scribd, and upload their own unique pieces of work. This created one of their biggest strengths and truly sets them apart from industry leaders. The convenience element and quality in displaying the integrity of Scribd writers can be used as leverage against big time players such as Amazon. iPaper in conjunction with embedding capabilities enables users to incorporate iPaper document viewer on their websites or blogs (Scribd.com, 2007) This feature allows individuals to go onto websites with Scribd embeds and view them without having to leave the site. Viewers are able to see the documents the exact way publishers intended them to be seen. While other competitors like Docstoc have embedding options, the iPaper technology once again is what sets Scribd embeds apart from those that have similar features. The difference in embedding capabilities will be realized by both readers and writers alike. Publishers will look for a company that provides them the most effective way to display the integrity of their writing. Readers will enjoy the convenience of not having to leave a site to read embeds and the originality of the work can be seen through the iPaper technology. Another strength Scribd has over its current competitors is the pricing structure, and relationship with their publishers. With an 80/20 revenue split in favor of the writers, and allowing for publishers to set their own price points and make real time changes, there are no other companies that compare with Scribd. (Scribd.com, 2009) The company has a dedicated vision of sharing literature with the world with quality and convenience as the underlying themes. This is a
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vision that can be recognized by any publisher that encounters Scribd. This is also recognized when comparing sites with Amazon who often clutter their pages with product on top of product, with an unfocused alignment in the needs and wants of a writer. To ensure future success and sustainable growth, Scribd must take the necessary action to protect their iPaper technology and embedding capabilities. They must continue to stay technologically innovative, branching out to all downloading platforms including the iPhone. The iPhone application will bring them one step closer in piloting a product that is similar to Amazons Kindle reader. This will enable them to decide if further research and development should be spent towards creating a Kindle like product. They must also take much more precaution in protecting the rights of their writers surrounding plagiarism and copyright issues. While new products, publishers, technology, and users expand in numbers, Scribd must maintain the easy-to-use website, clutter free atmosphere, and stay true to their belief in A writers dream, a readers paradise. Growth in publishing companies is inevitable, yet Scribd must find a healthy balance in maintaining good relations with current publishers while increasing brand equity and awareness by signing on the new. Scribd has everything it needs to create new revenue streams. With the ability to create alliances with newspapers, more publishers, businesses, and educational facilities revenue can be generated in establishing contracts and partnerships with all of these categories around the world. With 50 million unique hits every month, Scribd is just beginning to scratch the surfaces of their followings potential purchasing power. (Scribd.com, 2009)

Table 6-3 Success Factors Scribd (Source: Scribd team, adapted from Harmon, 2007)

With a focus on mitigating the critical risk factors and leveraging the critical success factors Scribd can maintain many of their competitive advantages they currently hold in their industry. With strong competitors, these advantages and

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future opportunities may be eliminated if Scribd does not follow the tracking metrics provided. The costs incurred through reaching the objectives established pertain to R&D and marketing costs, viewable in the Implementation section of the report. The costs for integrating mitigation and leveraging strategies is far outweighed by those incurred from ignoring them. Scribd cannot afford to fall behind in the value they provide through their innovative technology. In this hyper-competitive market Scribd needs to continue increasing their offerings and switching barriers for customers or it will cost them their business.

conclusion
After reviewing and analyzing Scribds competitiveness within their market, we feel as though Scribd has a viable reason to advance into the implementation process. Scribd is the provider of the most advanced social documentation distribution platform. (CrunchBase.com, 2009) This is an important time for Scribd to gain as much market share and awareness as possible. Their core competency will at some point become an industry-shared technology. To counter, Scribd must create a large consumer base while focusing on adaptive and innovative ways to increase their current value offerings. As stated in the Market Analysis, as Scribds customer volume grows, they must follow their vision to promote their culture, creating a loyal following. Determined in the Business Overview, Scribds Big Idea, a writers dream, a readers paradise was formed from their overall vision and strongly represents the culture they serve. Scribd needs to stay true to this vision in order to benefit from a following of consumers, that believe Scribd to be the best channel for representing their desires and needs. Scribd has entered a market that represents a large number of potential consumers. Through our analysis the most attractive segment is the Alternative Online Reader that represents 23,337,728 of consumers with a monetary potential of $563,606,131. Many new entrants and larger companies are trying to capture market share. These include Scribds current competitors Amazon and Docstoc, along with the potential clash of high tech leaders Apple and Google (Hoovers, 2009). The advancement of new technologies and a focus on their target markets key value drivers will keep Scribd ahead of these potential competitors. Scribd must work on creating strong industry barriers to deter further competition and provide them with further advantages to their current competitors. Scribd has built a presence over the Internet as a place where readers can buy books for a low price and where authors can upload their written works to share with the public (CrunchBase.com, 2009). We believe the marketing plan should move ahead as Scribd has set the foundation for an already established customer base. This customer base is expanding rapidly as more people learn of the type of service Scribd offers. The expanding customer base shows that Scribd will be a reliable business for both authors and readers. More companies will be inclined to work with Scribd, as they become aware of the fact that the number of hits the website receives daily, is growing each month, currently at 50 million unique visitors (Scribd.com,2009) Scribd should also move forward because they offer a service that no other digital publication retailer can offer: a public website where anyone can upload written work. (YouNoodle.com, 2009) Scribd has caught the eye of many authors because they give them an opportunity that no other book retailer has ever given before. Although Docstoc allows authors to upload written books, authors are still limited to only business and educational writings. Scribd, on the other hand, allows anyone to upload everything, which gives them a competitive advantage in customers value perception. Scribd offers something special to both readers and authors. This is seen in the Competitor Analysis section of this report. Scribds alignment with their industrys customer value drivers, is far better than those of their two main competitors. Using these value drivers as a guide for further offering, Scribd can continue to follow their vision, while creating the most value to their segment. The business model Scribd uses has allowed the company to provide authors and publishers with control over pricing, awarding them with valuable partnerships. Currently major partnerships with Simon and Schuster, Harvard, and others have boosted brand identity and awareness as well as given Scribd free public relations and brand association (Scribd.com, 2009). Since Scribd shares a greater percentage of profits with authors and publishers, this keeps the supply of quality written work flowing. Scribd offers a better deal for authors than any other competitor and still maintains a growing profit. The marketing plan should evolve because the relationships built between Scribd, individual authors, and publishers will only get stronger as Scribd continues to offer the best service available. Scribd is building relationships with publishers that will secure future written works on their website. The number of authors and publishers using this site will grow, which will result in a larger inventory of publications, promoting greater readership for Scribd. Scribd has proven they have the potential to enhance technology, increase readership, and secure relationships with authors. It has become evident that Scribd has all of the right tools to compete vigorously with current and future

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competitors by focusing on a unique position derived from their value proposition and customer-centric service orientation. By instigating an aggressive marketing plan and campaign, Scribd can capitalize on existing their best of class technology, grow their base of solid partnerships with authors and publishers, and ensure a loyal customer base, thereby creating barriers to new entrants.

SecTion 7

market strategy
To properly market Scribd, a very innovative business, there needs to be a strong market strategy. This marketing strategy section will outline and discuss the steps needed to carry out the strategies. First, a dashboard will be created to keep track of the varying metrics used to evaluate our implementation of the marketing strategy. This will assist in tracking all of the various metrics that are established to gauge the health and relative success of the business. Secondly, we will use a blue ocean model to establish potential growth avenues. The blue ocean model will help determine where there is room for Scribd to exist and where there may be potential, untested waters. Lastly, a strategy will be developed to increase and eventually maximize sales for the next three years in Scribds existence.

Strategy Platform
The strategy platform is what Scribds strategic plan is built upon. The various elements help determine opportunities, plan for the future and ultimately, and maximize growth. According to lecture 5 by Harmon in 2009, there are five elements in the strategy platform and they are as follows: Strategic Objective Dashboard, Growth Strategy, Value Disciplines, Positioning Strategy and Branding Strategy. With these various elements the marketing plan will establish what is going to be done and how it will be done. These elements focus on the all-encompassing plan and when properly established and done correctly, this strategy section provides all of the practical planning required for a proper market strategy.

Marketing Plan Objectives


Sales and Market Share Scribd holds a market share that represents approximately 12.5% of the e-book market. 12.5% of the e-book market is representative of estimated revenues of $ $92,615,045 in fiscal year 2009. Profits The profit margin on Scribds e-books are severely limited by one major cost, the 80% of the sale price that is given to the publisher when their products are sold. 20% of the profit goes through to Scribd. While the profits may seem to favor the publisher and not Scribd, its important to note that Scribds costs are very low for storage and selling of product, so there is still a fair amount of easy profit being made for Scribd. Market coverage Currently, the United States is the only market that can read, access and buy all of Scribds offerings. Despite the fact that Scribd has support for many languages, Scribd has yet to lengthen their reach out to markets outside of the United States. By 2011, Scribd expects to be able to sell their materials in any market across the world. Brand Awareness Brand awareness is low for Scribd. One of their most popular competitors is Amazon.com and Amazon is becoming one of the most recognizable brands in the business world. Scribd needs to expand their advertising and marketing reach, make more large publisher deals and create a stronger brand identity to really reach a high level of brand awareness.

Marketing Objectives Dashboard


To fully understand the plethora of information that will be presented as a result of this marketing plan, there needs to be an at-a-glance resource that will provide pertinent information quickly. This is where the marketing objectives dashboard provides a great purpose, as many applicable statistics can be tracked via one set of graphs.
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Scribd will be tracked with the following marketing objectives: Return on Investment, Return on Marketing, Profits and Market Share. This information is key for owners, employees and investors in the company. The four of these graphs combine are effectively like the heart monitor of the business. A significant dip in any of these figures would suggest a potential issue for Scribd. Figure 7-1 below shows what a hypothetical marketing objectives dashboard would look like for Scribd. Other potential areas where Scribd could benefit from a marketing objectives dashboard would be tracking traffic to the website, average amount of time spent on the site, average dollar amount per purchase, etc. All of this information could be worked into a comprehensive dashboard to further Scribds ability to evaluate their companies health at a glance.

Fig. 7-1 Marketing Objectives Dashboard (Source: Liam Flaherty, 2009)

Growth Strategy
This section will uncover the theories developed on a Blue Ocean Strategy created by Kim and Mauborgne. A description of Ansoffs Matrix and the possibilities for four different types of alternative strategies that can be implemented will be revealed. It will also show how Scribd can use current resources in creating a blue ocean and the possibilities in each alternative strategy in the Ansoff Matrix. Growth innovation, new ventures, and partnerships will be explored. A platform strategy will indicate the potential alliances with Sony and Kindle Readers. A presentation of Scribds three-year plan will be explained collaborating all of these elements in executing an effective growth strategy. Blue Ocean Strategy Blue ocean strategy is concept that Kim and Mauborgne have created to signify the uncontested markets of a companies industry. They explain the difference between red oceans where companies are in direct competition with one another trying to take hold of more of the existing shares. Within the confines of red oceans growth and profits are reduced as more players enter the same market. In red oceans products and services become so abundant that consumers are allowed to choose according to price, and companies are in a constant battle with one another to

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create the most cost effective rates. To achieve a blue ocean companies must bring about completely new industries. Yet, the most prominent blue oceans are created when companies take the current state of the industry and alter the parameters to ultimately develop an uncontested market. A graph was created to explain the trade off between cost and customer value. Essentially, Kim and Mauborgne explain that to achieve blue oceans companies must find ways to drive down costs and increase value. They also focus on being proactive and not using other competitors to set your companies benchmarks (Kim and Mauborgne, 2004). This concept of blue oceans will be a key element in assisting Scribd to develop the most effective strategy moving into the future. Ansoff Matrix The Ansoff Matrix model aims to determine where each company currently stands and develops alternative direction assisting in growth opportunities and objectives. Consisting of four different dimensions including current products/ markets and future products/markets, the strategic alternatives are presented as follows: Market Penetration This first strategy utilizes existing products aimed at attracting current and potential Scribd customers to purchase more products. It also goes after competitors customers often resulting in a price war. Increasing advertising and marketing communication efforts is a big push in this strategy, ultimately creating brand awareness around the product or service. Market Development In this strategy, new markets are introduced to the current service offering. Product Development In this strategy, implementing new product offerings or innovating the current products and services is the main focus. The existing markets are the targets of product development, and higher risks are often incurred through the cost of research and development along with the launch of new products. Diversification With the highest amount of risk, diversification aims to tap into new markets and offer new products and services. Risk becomes higher in this strategy if the approaches are not built from the core competencies that currently exist within the business (Richardson & Evans, 2007). The following chart demonstrates the four dimensions of Ansoffs Matrix.

Figure 7-2 Scribds Ansoff Matrix (Source: Richardson & Evans, 2007)

Looking forward, the Blue Ocean Strategy in correlation with the Ansoff Matrix will assist in developing the most effective growth strategy. While Scribd currently operates in red oceans consisting of giant competitors and a smaller share of the market, a plan of action will be presented for the most effective market penetration models for the business in 2009. Transitioning from 2009 to 2010, Scribd will look towards R & D in bringing new products to the current markets, as well as tapping into new markets for optimal revenue potential. While the customer base, brand awareness, product innovation, along with potential media publication partnerships all continue to grow, a diversification strategy will be put into place in 2011 based on the core competencies of the current business structure.

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Strategy Recommendations This chart demonstrates the different options Scribd will choose to invest in moving forward. For optimal growth, each strategic alternative consists of several options that will be analyzed for implementation.

Figure 7-3 Scribd Growth Strategy Options Source: Scribd team consensus, 2009

Recommendation on Strategy (August, 2009 July, 2012) The Scribd team was able to see that the ideas that were established by the founders already have potential to create a Blue Ocean Strategy. The concept of proactively creating blue oceans became a reality when it was recognized that there was no need to use competitors as a benchmark for success (Kim & Mauborgne, 2004). The unique offering that was initially created for the Scribd service is much different in comparison to the competition. Amazon uses the Kindle Reader that forces their customers to purchase a $300 device to download, also limited to only published books. Barnes and Nobles and other bookstores are not comparable to the convenience of downloading on Scribd. They also do not include the social networking aspect or the ability for anyone to display their work to share with the rest of the world. Docstoc is similar yet very limited in variety of literature, tailoring their offerings strictly towards business professionals. Scribd is in a league of its own, and has already grazed the surfaces of creating a blue ocean incorporating innovative technology, cutting costs, and creating a higher level of value. They now need to continue to expand on product and service offerings creating demand and eventually achieving a blue ocean of their own. year 1 (August 2009- July 2010) In the initial year of this strategic plan Scribd will have heavy emphasis on promoting the brand looking to increase awareness among the target market (Alternative Online Consumer) by 60%. In order to gain more market share and take away customers from the competition, Scribd will increase the amount of big time publishers from 10 to 25 within the first year (Figure 7-9). Alliances with more trade publications will take place increasing the value towards current and future users in the Alternative Online Consumer category. 2009 will have the Scribd store as the focal point of revenue generation as they fine tune the current product offerings, uploading and downloading service, technology innovations and push to continue to stay aligned meeting the needs of these unique users (Figure 7-8). year 2 (August 2010- July 2011) During this time Scribd will continue to attract more media publications on an advanced scale. They will also look to increase communication among universities and colleges about the current service offerings. A heavy push in teaming up with national and local newspapers will be factored in to the equation, and with Harvard University launching

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1,000 books on July 16th, 2009, the windows of opportunity will open up, to team with university libraries in textbook publications (Scribd.com, 2009). Partnerships with government facilities will become a part of Scribds operations. A pilot study will be conducted in the state of California providing DMV documents available for the general public. This will allow for uniform real time changes to be made and instantly posted throughout the DMVs in California. Yet, they will also move forward in technological innovations providing video embedding capabilities and audio features for an enhanced user experience. A heavy international push will come into the equation as international on-line retail continues to flourish. European and Asian online shoppers average almost twice as many purchases as North American online shoppers, and growth in online shopping is faster in the developing markets than in the developed economies (ACNielsen 2005). Total e-commerce sales in Japan, South Korea, China, and India were $51 million in 2006 and are expected to grow to $115 billion in 2010 (Asia Pacific B2C E-Commerce: China, Japan and South Korea 2007).These product and market developments signify the beginnings of the shift from red oceans to blue oceans (Figure 7-8). Towards the latter portion of this year an emerging alliance will be formed with the Sony reader. Sony E Reader was developed by E-link Corporation in 2006, enabling readers to view text in direct sunlight with no power necessary to maintain a static image. Sony Reader currently uses an iTunes store-like interface in Sony publication transactions. In need of an efficient wireless data network, they make a perfect partner for Scribd (Cnet.com, 2009) (Figure 7-9).

Exhibit 7-4 Image of co-Branded Scribd/Sony Reader Source: Created by Jason Rippy, 2009

year 3 (August 2011- July 2012) In the third year of the growth strategy, Scribd will transition into the diversification stage of the Ansoff model, and move towards a fully developed blue ocean. During this time, the tables have turned and trade publication, educational programs and government facilities are all looking to cut cost and take advantage of Scribds massive following. With media publications knocking at Scribds doorstep, partnerships are formed with a major player in this newly developed industry. They will introduce the new Scribd Reader co-branded with Sony, fully equipped with audio and video embedding capabilities. This device will not just be limited to published offerings; instead all of Scribds millions of uploaded documents and unique literature can be downloaded within seconds. Other new technological advancements will allow the hundreds of languages on Scribd to be automatically translated on all Scribd platforms. They will also utilize CRM system to create a Preferred Customer Plan tailoring special offers to loyal repeat users, and annual magazine and newspaper subscriptions will become available at the Scribd store (Figure 7-8). This can be further referenced in the sales distribution section. As indicated in the product platform (Figure 7-9) in year 2011, Scribd will open up the doors in offering all of their unique literature on the newly co-branded Scribd Reader. With millions of documents, increased trade publications, magazine subscriptions, and individual uploads this alliance will be a lucrative investment for both parties (Figure 7-8). This next chart indicates the relationship of Scribds three-year growth strategy plan in the confinements of the Ansoff Matrix. It is also a representation of the progressive transition over the years into a blue ocean/diversification portion of the model during the third year.

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Figure 7-5 Scribds Three-year Growth Strategy into a Blue Ocean (Source: Kim & Mauborgne, 2004, Richardson & Evans, 2007)

This product platform chart shows the product progression among our three target markets and the correlation with the platform progression over the next three years. It also indicates the partnerships that are set in place for future emerging platforms.

Figure 7-6 Scribd Product Platform (Source: Quantcast.com, 2009, Scribd.com, 2009, Scribd team consensus of platform and technological innovation, 2009)

Market Leadership This section will look at the market leadership model consisting of five different metrics. The model looks to differentiate a companys position in the industry, making them difficult to replicate by competitors. A company must excel in all areas to be successful player among the competition, yet specialize in specific metrics in order to differentiate the value being created. The Scribd team will evaluate the core competencies that contribute to each attribute positioning the company in the most effective manner. The five metrics include: knowledge This multidimensional metric can focus on knowledge within the company between employees, and knowledge shared and co-created with customers. The development of sharing of knowledge increases value in your product or service.

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innovation This metric devotes a commitment to R & D in creating new markets and technology. Innovation is developed in three different ways including Demand Pull where marketers encourage engineers to create products tailored towards high opportunity market, Technology Push, where engineers create technological breakthroughs that have potential in the market, and Integrated Approach, where engineers and marketers co-create technology with the market in mind. The innovation metric increases customer value by enhancing the products, processes, and people. time This metric creates value by keeping in mind that the element of time is a product attribute. By creating the most efficient systems, a company can strengthen value-in-use. In cutting down delivery processes it will ultimately decrease cost and increase benefits by giving back the customer their time. Speed is a vital characteristic of time that can create opportunity maximization. customer intimacy In this category intangible benefits play a large role in creating value. It also aims to incorporate the customization of unique individual customers, and allowing them to participate in determining what is valuable in the end product. A heavy emphasis is put onto a company being able to sense and respond, making proactive decisions and leading the industry in customer service. Operational excellence This metric focuses on the people within the company as the core assets. Every operation is team based and value is created by tapping into new markets with existing assets. At the same time, companies must continually enhance product designs, materials, and processes to achieve the most efficient overall cost (Harmon, Lecture Five, 2009). This Radar Chart demonstrates the key metrics that Scribd will focus on in differentiating themselves from competitors. It also illustrates the utilization of core competencies in Innovation and Customer Intimacy, enabling enhanced value in the overall Scribd service.

Figure 7-7 Scribd Radar chart (Source: Harmon, Lecture 5, 2009, Scribd Team Consensus)

Scribd possesses well-rounded attributes in meeting the needs of each dimension of the Radar Chart. Yet they have really pushed the envelope in terms of product and service innovation. Their ability to bring innovative value driven products to existing and new markets is what truly differentiates them from competitors. The introduction of iPaper technology set their foot through the door to compete with a company like Amazon, and the introduction of their service concept in tune with the needs of consumers is what sets them apart. The Scribd marketing team has worked alongside engineers to develop technology and services that cater to the needs of the market, in achieving integrated innovation (Harmon, Lecture Five, 2009). The potential for expanding into global markets, and the addition of audio and video embedding capabilities on the newly co-branded Scribd reader will reinvent the industry. The addition of instant translation in hundreds of languages will bring them one step closer to creating foreign media publication alliances. With a deeper understanding of their audience, the co-creation of value-in-use with Scribd consumers, and a service that incorporates a small piece of each competitor, Scribds innovation process is performing on an enhanced, blue ocean driven scale. Another strong performance metric is Scribds Customer Intimacy. The reason they are able to excel in this category in comparison with competitors is because they truly allow their customers to participate in the value creation process. Scribd audiences are not just individuals consuming a service instead they are the service. They are the readers,
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the writers, the social network, and the voice behind what Scribd has become, and where they would like it to go. If Harvard University wants to digitize 1,000 books on the Scribd website, then they can. They will become a part of the value creating process and begin their own social network of users, and make changes whenever they would like. Scribds ability to sense and respond is spot on, and they are merely a facilitator of Scribd users, specializing in customer service (Harmon, Lecture Five, 2009).

Positioning Strategy

yEAR 1

yEAR 2

According to Robert Harmon and Greg Laird, positioning strategy represents a firms decision of how and where it will use its distinctive value creating competencies to create competitive advantage (Harmon & Laird, 1997). The objectives of the positioning for Scribd are: 1) to differentiate them from e-book and book retailers, by focusing on yEAR 2 yEAR 3 the benefits of their offerings as services and 2) to distinguish them as an online social publishing network, positioned according to their unique vision, to liberate the written word to turn everyone into a publisher and create the best possible reading experience on the web and mobile platforms (Scribd.com, 2009). In keeping with those objectives, Scribds positioning should be focused on their attributes and benefits. Appealing to consumers emotions is even more important than ever. From their article on emotional product positioning, Vijay Mahajan and Yoram (Jerry) Wind explain this is the following way: Given product proliferation, information overload, a focus on customer relationships, and consumers increased use of Web-based search engines and decision tools, companies need to do more than appeal to the head in positioning products. They must also appeal more than ever to the heart. (Mahajan & Wind, 2002) And according to Mahajan and Wind, because Scribd is a service, this is especially true. Service comes from the heart, say the authors, Affect fuses together a wide range of features and benefits that are not, or cannot be, clearly articulated (Mahajan & Wind, 2002). In other word, products are easily classified, however services are a complex grouping of less tangible elements, and an emotional appeal can help customers relate to the services offered, thus gaining mind share or brand awareness. Scribds vision and generous relationships with their partners, as well as excellent customer service are important to the emotional aspect of positioning.

Desired Market Position


As previously described in this paper, Scribd is competing with both large e-book retailers or smaller online publishers who seek to fill the needs of selected vertical markets. With regard to both types of competitors, Scribd needs to differentiate itself. Against larger retail competitors, Scribd needs to be positioned as the company that cares the most about the creation of value for its customers and is most customer-centric in products and services developed, corporate culture and marketing strategy. Against smaller vertical niche competitors, like Docstoc, Scribd need to position itself as providing more and better services, a wider variety of printed works from individual creators to established publishers such as Simon and Schuster. Scribds positioning can be both cognitive and affective by being focused on solutions and benefits sought by consumers, and in conjunction, appealing to those consumers who share their values of supporting creators and writers by publishing all works, sharing the results with a wide-reaching audience, and therefore proliferating the written word. Both cognition and affect are important, but the battlefield of positioning is shifting to affect (Mahajan and Wind, 2002). Further, customer intimacy positioning can be achieved if Scribds marketing strategy stays linked to key value drivers for their audience, and evolving as those value drivers change by developing knowledge-based relationships with its customers. A Customer Intimacy Leadership position involves: Responsibility for the customers results. An established reputation exceeding customers expectations. Involvement of the customer in value creation. Customizing to the individual customer. The foundation for sense and respond. Lifetime value of the customer.

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Customer loyalty is the primary competitive barrier, it increases switching costs. Emphasis on intangibles. Industry leading customer service (Source: Robert Harmon lecture slides, 2009) The desired positioning for Scribd, then, is derived from affective cognitive and customer-intimacy leadership positioning. Ideally, Scribd must be more customer-centric than any of its competitors, with customer value driving its strategy moving forward. Key value Drivers For Scribd, the value drivers that rated highest for the proposed target market are unique needs are met, a high level of product availability, a positive purchasing experience, shared values with the company, source credibility, sense of community, delivered initial cost, flexible price structure, works on multiple operating platforms, and easy accessibility of the product (downloading), and a reading experience that most closely matches a printed book. These are covered in greater depth in Section 4, Market Analysis. The key value drivers listed here rated at a value of higher than five in relative importance to the consumer. This information is taken from Section 4, the Market Analysis section. A comparison of the key value drivers of the selected target market, the alternative online consumer, and those value driver ratings for Scribd competitors is shown in the following table. The value drivers are listed in order of importance to the Alternative Online Consumer segment.

Table 7-8 Key value Drivers Relative to the competition Source: Section 4, Market Analysis, of this paper.

On all of the value drivers listed above, with the exception of credible source, Scribd ranks higher than both Amazon and Docstoc for the alternative online consumer. Amazon is considered a more credible source based on its brand awareness and equity, and longevity in the marketplace.

Branding Strategy
As described by Leonard L. Berry in his article about services brands; Service companies build strong brands through branding distinctiveness and message consistency, by performing their core services well, from reaching customers emotionally, and by associating their brands with trust. (Berry, 2000) The strongest service brands reveal a conscious effort to be different, a conscious effort to carve out a distinct brand personality. The goal of branding, proffers Berry, is to reinforce a demonstrably different service experience with a demonstrably different brand position. (Berry, 2000) As a service, Scribd needs a brand and branding strategy that transcends product features and benefits, and makes an emotional connection with the audience. To do that, Scribds brand identity must reflect customers core values.
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In this way, Scribd can differentiate from competitors by promoting feelings of trust, loyalty and affection. And service brands strengthen brand equity by focusing on under served market needs (Berry, 2000) Brand is built from the customers entire experience with the company, its products, and its services (Dunn & Davis, 2003). Brand strategy for Scribd will include integration of branding, messaging, service and the corporate vision to all internal and external touch points. Brand touch points are all the different ways that an organizations brand interacts with and makes an impression on customers, employees, and other stakeholders (Dunn & Davis, 2003) Scribds brand strategy will need to start from the top down with a demonstrated commitment from top executives, alignment with business strategy, and a consistent personality. It must work with the affective cognitive, customerintimacy positioning proposed, and center around a unique and easily recognizable personality as that of the online social publisher who cares about the creation and sharing of a uniquely diverse inventory of written works, sharing the written word and making their resources available to all.

value Proposition
Scribds new value proposition is: Scribd is the premier innovative global publications resource that fosters and inspires a culture where all writers and publishers thrive, thereby expanding its customer base and creating profitability. Brand Identity Recommendations Scribds brand identity needs to be strengthened with a stronger version to the existing logo - logo should be more descriptive and emotionally evocative - logo should have more personality and stand out from competitors Scribds brand identity needs to be consistent, with a fully developed corporate look and feel, and voice The brand identity must tie in with the value proposition and align with the following attributes: Worldly Customer value driven Supportive Thoughtful Intelligent Innovative Scribd needs a tagline that is also emotionally evocative: A writers dream, a readers paradise. Following is a brand story from the Alternative Online Consumers perspective. Brand Story My name is Austin and upon my first visit with Scribd on my recently purchased Macbook Pro, I was immediately impressed with the ease and convenience of navigating through the Scribd website. Without cluttered margins filled with advertisements and products, this page clearly indicates that this is an online publishing site where I can upload and download published work. The variety in offerings is outstanding, and best of all most of it is free. I can never gage how great a book is from just reading the back cover, and I love that when I click on a book, Scribd actually gives me a sample reading of the first chapter. It makes me feels good to know that Im paying for a quality reading experience. The look and feel of this website is very easy on the eyes and Im enjoying going through and exploring the different magazines, cooking recipes, and sample resumes available. I usually get frustrated when Im trying to check out and purchase on an online site, but Scribd has made this one step sign up and payment so easy. I was in and out within minutes. After my last experience I couldnt wait to revisit Scribd. This next time I was back on the publishing end. I had taken a creative writing class and came away with some really great friends that I still share short stories with every now and then. I told them about Scribd and how it makes it so easy for me to publish my short stories to share with my friends. The iPaper technology is great and publishing has never been easier, no wonder Scribd has such a huge following. I noticed that I made some grammatical errors on one of my published pieces. It

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was amazing how quickly I could go in and make changes to my document. I even have been able to meet several people who share the same passion for writing short stories. Ive created a network of people that specifically just share this one common interest. It really is a nice feeling knowing that Scribd has created an environment that dedicates itself to sustaining the written word, and I cant believe they let their publishers set their own prices and give them 80% of each sale. I can now see why the fourth largest publishing company in the world has decided to create an alliance with Scribd, and I cant wait to see the new offerings that will be available in the years to come. My friend Rob has a blog where he shares his favorite literature, and often Ill find that he has embedded Scribd documents onto his blog. Its great how convenient and easy it is to go through the Scribd document even on other websites you dont even have to leave the page and you can read through the whole piece, and even link back to Scribd if you want to. The best part is that it displays as great as if youd gotten the publication straight from the Scribd website. Every time Ive got some time to kill and Im surfing the web, Scribd is in my favorites and one of the top five sites I go to when surfing the net. I do wish they had an iPhone application so I could load up some documents to read before Im about to board a plane or get into a car for a long ride. I would definitely download that application as soon as it became available. Every time I had questions or concerns Scribd support desk was very helpful. With most of my questions the answers were already available under FAQs. When I couldnt figure out how to embed a document I submitted a report request, and I had a message in my inbox the very next day with step by step instructions telling me exactly how to embed a document onto a website. The best part is that they have clearly created a visible email preferences section that allows me to block any unwanted material from coming into my email account. This really made me feel like Scribd was trying to enhance the quality of my life by making things easier, and not shoving advertisements down my throat and filling up my inbox with annoying reminders. Scribd possesses all of the attributes that I look for in an e-book publisher and seller. With a clean uncluttered approach in presentation, ease and convenience from check in to check out, and place where I can affordably learn and share, this is as customer-centric as it can get. Scribd is a company that is keeping reading alive by sustaining the reader/writer relationship and I am proud to be a part of that. Transition to 4 Ps

Knowledge (.15)

Innovation (.32)

Product Leadership (.15)

customer Intimacy (.30)

Time (.25)

Figure 77 4-P Figure 7-9 Transition Map (Source: Jaclyn Tienneman, adapted from Harmon lecture slides)

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Product Product is the most prevalent out of the 4-ps in our strategy transition map. This is because it is the main source of our revenue, as well as gateway to customer intimacy. Product innovation and product leadership is the key to competitive advantage in this technology field. Scribd currently leads the field in innovative technology with their iPaper, the strength of this product is what currently drives Scribds market share. Promotion Promotion ties for second place in our strategy transition map. Promotion is especially important to Scribd because they are a startup and a relatively new entrant to the market. Scribd needs to concentrate promoting brand awareness to increase their unique visits, and translate those visits into sales. Placement Placement or distribution ties for second in our strategy transition map as well, it is important to our marketing strategy because the consumer needs to be able to access the site easily and in a timely matter. It is important for Scribd to boost their search engine optimization to find the site, as well as within the site, so the consumer can easily navigate the page. Price Price held the lowest score in our strategy transition map. This is because Scribd currently uses a skimming pricing method, since the product has a high perceived value. Although price scored the lowest we do feel that it is necessary for Scribd to begin using aspects of a penetration pricing plan to compete with giants such as Amazon. conclusion In our 4-ps strategy transition map we find that our products scored the highest. Next were promotion and placement, closely followed by price. Scribds marketing strategy will need to focus on creating brand awareness through out all four Ps. We also found that in this industry is eager for customer intimacy and innovation. Time scored relatively high as well, we assume this is because it is an internet-based company, and consumers are constantly looking for the quicker more convenient services. Product Plan An extensive product plan including the product line strategy and the product platform strategy will now be provided. A product line strategy is a time-phased conditional plan for the sequence of developing product offerings from a common platform with each product offering targeting a specific market segment (McGrath, 2000.) The key considerations while creating the product plan for Scribd are the key market segments and the offerings appropriate for the targeted segments. Product objectives Scribds product objective is to become the most used digital publication site on the Internet for the Alternative Online Consumer and other profitable consumer segments. Including enhancing their current industry position of the most innovative technology platform and easy-to-use website. Product life cycle, market life cycle, technology life cycle The following is an overview of the product, market, and technology life cycles for Scribd, including market development, market growth, market maturity, re-differentiated market, and market decline. Since Scribds product offerings are provided through a service, their offerings life cycle could last indefinitely. As long as the world has writers, Scribd will have a product to offer. The Technology life cycle, as stated in the technology assessment is nearly non existent. Since the needs of customers are filled through a continually updated and modified system, customer disposition behavior is limited. A Flash player update can be downloaded to a users computer, providing them with the needed requirements to view their purchases. While the online document sharing life cycle is still in its growth stages, there is opportunity for Scribd to cement themselves within the key market segments provided in the market analysis. The market life cycle has moved out of development and into the growth stages. As our Competitive Analysis has highlighted, they are large businesses and smaller market entrants that are trying to capture a share of this growing market. Product Strategy Our product strategy is to increase site traffic and market penetration into the Alternative Online Consumer market segment, as early adopters continue to understand the benefits Scribd has to offer, while the early majority catches on

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to the sites iPaper technology functions and capabilities. To promote this strategy Scribd needs to enhance customers accessibility and availability to document offerings. At the same time increasing Flash Player technology, allowing for user editing and citing capabilities. Introducing audio and visual features will add value and attractiveness for the segmented market. Using a time-phased plan for the development of different products from a common platform (McGrath, 2001), will help management focus on key growth decisions. Developed in the table below, is Scribds product strategy which focuses on five key performance indicators (KPI) (Harmon, 2007) used to track the growth progress. Included in the KPIs variables are Revenue Drivers/Sales, R&D/Product Platform Technology Innovation, Inventory, Usability, and Packaging. The Revenue Drivers/Sales will be measured by Scribds amount of available documents that customers have access to. By increasing customer access abilities and offerings Scribd hopes to increase profits, market share, site traffic, and market penetration. R&D/Product Platform Technology Innovation will be monitored by the publication format distribution capabilities. Providing abilities to edit and cite, along with audio and visual features will improve Scribds technological assets. One of the aspects of Revenue Drivers/Sales includes the Inventory variable. This will be measured with Scribds publication partnership growth. Expanding publication contracts and uploader activity, Scribd will increase profit potential and share potential. With more offerings site traffic will grow, benefiting market penetration. The Usability variable will be measured by Scribds ability to provide a mobile reader through a partnership with Sony and Apple. Sonys partnership will include the Sony E Reader, while an application will be available on Apples iPhone and iPod. Providing mobile devices that have additional attributes like editing and visual functions will improve profits, market share and penetration, along with Scribds technology innovation functions. The last KPI variable, Packaging, will be measured through Scribds ability to integrate customer relationship management (CRM) software and viewing benefits, to improve the customer experience. A more one to one marketing approach will drive customer satisfaction, improving site traffic, potential for profits and share.

Table 7-10 KPI variables Growth Strategy Plan Objectives

Product Portfolio Scribd being a service provider, the product portfolio currently consists of writer and publisher offerings available to customers for download from the Scribd site. These currently include a wide range of materials from best selling books to resume examples and poetry. Any virtual form of written material is a viable product form which Scribd is able to offer. In the future reading applications and a mobile reading device will be added to this portfolio. Product Platform family As seen in Product Platform Figure, Scribds base and only current platform consists of the iPaper platform with Adobe Flash technology. This is the main component to Scribds platform family, the reason they are in business, and the parent to future portable reading devices. The next platform will consist of Apple applications and the Sony

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E Reader. This platform will allow Scribd to increase reach and add value for both their customers and publishers. Using the technology from the base platform, Scribd will be able to take their competitive advantage mobile. The next platform will be comprised of Scribds innovative mobile document reader. This platform will include advancements to audio and visual, and editing and citing capabilities. Each platform will have the format conversion and embedding capabilities. The attributes these platforms provide will benefit our target segments differently but each will help Scribd in becoming the most used digital publication site in the industry. Product development As seen in the Product Platform Strategy Figure (7.2.1) through the remainder of 2009 and the first three quarters of 2010, Scribd will stay focused on providing value to their customers through benefits of their iPaper Technology. Working with Sony and Apple, during this period, Scribd looks to launch a Sony E Reader portable reading device, along with new Apple applications for the iPhone and iPod during the last quarter of 2010. With this release date, Scribd looks to reach the U.S. holiday shoppers market.

Figure 7-11 Product and Platform Strategy (Source: Kinero Tan, 2009)

Packaging Packaging needs to be strategically implemented based on Scribds value offerings. Though the service is provided on a virtual network, the website needs to add value to Scribds customers. As stated earlier in the plan, the site needs to be highly functional and easily navigational. As Scribd continues to improve upon their CRM functions, this will benefit the website and design. A more one to one marketing approach can be accomplished, allowing each package to match the needs and wants of each unique customers. Services With Scribds innovative technology they are able to run on any operating system and can distribute formats desired by customers to multiple viewing devices. With their current business model and Internet delivery Scribd does not need to work with channel partners. In the future the introduction of a mobile reading device will need an Internet provider partnership to allow customers to purchase products directly from their device. Uploading, downloading, copyright, CRM, Scribd support 24/7. Warranty Since our product is the service provided by a distribution platform which allows users to view multiple formats of published writings, there will be no need for a warranty for our current product offering. A warranty program will be established for the mobile reader products Scribd provides in the future.

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Product cost model

Table 7-12 Product costs Source: Kurt McDonald

Exhibit 7-13 cost of Data Transfer and Storage (Source: Jason Rippy and Liam Flaherty, 2009)

The total product costs currently for Scribd, includes the website domain and bandwidth, along with the salaries of the 23 employed and R&D costs. As seen in our product cost model figure 7.2.2 the average upload expenditure is $1,728 a year. This is based on 18 million file uploads at a 10 cent cost per gigabit. Their storage expenditure based on a 15 cent per gigabit, per year increases yearly from $2,592 in year one, to $5,184 in year two, and $7,776 in the third year. Downloads have the greatest cost at 17 cents per gigabit downloaded. With an average of 1,000 downloads per file and an .08 gigabits needed to download a single file, we have assumed an expenditure of $244,800 per year for Scribds cost to download. Yearly costs as seen in table 7.2.2 would amount to $249,120 in year one, $251,712 in year two, and $254,304 in year three. Total data costs incurred for the three years would be $755,136. Future cost models will need to be analyzed when a tangible mobile reading device becomes available to consumers. Product launch issues and timeline Scribd is already up and running and the introduction of the Scribd Store in May 2009 is fully functional. Communication with the software and production teams for future innovations, including the development of the mobile reading device will be crucial for success. The Apple applications and Sony E Reader introduction are set for a 2010 fourth quarter roll out. While the Scribd portable reader hopes to be introduced third quarter 2011. Scribd engineers, product development teams, and marketing staff will need to work diligently in producing a set of objectives and goals to meet throughout this development process.
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Sales and Distribution Plan


Sales and Distribution Objectives Scribd has five main objectives for sales and distribution. The following objectives are designed to decrease distribution time and increase sales for Scribd within the next three years.

1. 2. 3. 4. 5.

Decrease search time for a book to three minutes or less. Expand Scribds bookstore offerings to increase sales of books by 70 percent by the end of three years. Create a portable reading device in order to decrease distribution time. Offer multiple pricing models to secure and increase sales. Provide promotional incentives that will increase sales by 10 percent.

The first objective is aimed at decreasing distribution time. Scribd is focused on reducing the time it takes for a customer to get a book on their computer. This process includes a user who has a book in mind and searches for it, finds it, and clicks to download. The downloading time will vary depending on the customers computer. The process for searching for a book needs to be simple for the buyer to reduce time spent on finding a book. The second objective is focused on increasing sales. Scribd is relatively new to the e-book industry and has the opportunity to gain more customers through increasing their inventory. Scribd should continue to focus on building relationships with suppliers (publishers and educational facilities), to expand product offerings for the reader. The company should also contact colleges and universities for potential suppliers. If Scribd can provide more books to read, especially those from mainstream authors, their sales will increase dramatically as the years progress. The third objective is focused on decreasing distribution time as well. According to Amazon, the Kindle can download any book on the device within 60 seconds or less (Amazon.com, 2009). This reduces their distribution time as it is clear the reader receives a book in a much shorter time period. With Scribd, the download time could vary drastically depending on the computer the customer is using and the size of the book. Also, with Kindle, the product is mobile with a built in wireless connection, allowing them to have downloading capabilities from anywhere. To decrease the time it takes for a customer to receive a book, Scribd should focus on the technology aspect to design a product similar to Kindle. The fourth objective is focused on providing multiple pricing models for the consumer in order to increase sales. Scribd should focus on integrating subscription services for magazines and newspapers available on Scribd. For example, if a consumer reads People magazine once a week, it would make sense to offer a pricing model that allows
the consumer to prepay for a subscription (SubScRIBDtion) that will run for a month or up to a year. By integrating this pricing option, Scribd secures future sales and makes the buying process easier for the reader.

The fifth objective is focused on increasing sales through promotional offers. Scribd can utilize contracts with publishers and reading devices that will encourage readers to download and buy more books. For example, Scribd could encourage downloads by offering a free book for every five books purchased from the same author or genre. This would encourage customers to buy more books with the goal of receiving a free one. Other promotional offers that could drive sales would be to offer a discount on the future portable reading device with the purchase of one book. This offer would encourage customers to buy the device as well as more books.

Sales Strategy
The sales strategy consists of two sales teams that are designed to target publishing firms and colleges. The strategies for these two teams are to grow suppliers, which will ultimately lead to an increase in sales because of a larger product variety. The sales strategy will involve hiring sales employees who specifically excel in building partnerships. Scribd has not taken full advantage of partnerships with large publishing firms. If Scribd can partner with other large publishing firms, they can provide their customers with a larger inventory of publications, which will promise a greater increase of sales. Scribd needs to expand their sales department and create a strategic plan for how they will go about partnerships with other publishing firms. Besides creating a sales team designed exclusively for publishing firms, Scribd should also create a sales team that will target the educational segment. More specifically, the team should make proposals to colleges around the nation. These proposals will target professors who have educational materials they would like to sell to students such as

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textbooks or class lectures. If the sales team can attract professors, students will follow which will ultimately increase revenues. Both sales teams will be responsible for setting pricing options and building partnerships with magazines to accomplish the fourth objective. The following chart shows a layout of the different sales teams and their tasks. These teams are designed to accomplish the second objective.

Exhibit 7-14 current Organizational chart

To accomplish the first and third objective, two technology teams will be assigned to tasks that simplify the website for book search and the production process for the portable device. Currently, Scribd has a Chief Technology Officer who will be in charge of the two teams accomplishing these tasks. If Scribd feels they cannot create a device similar to Kindle internally, they should seek outsourcing or partnership options. Ultimately, the group recommends Scribd build the device internally co-branding with the Sony E Reader team. Scribd has successfully created a website that is more user friendly than not; however, they need to work on their search engine in order to decrease the time it takes a reader to find and buy a book online. Scribd has millions of written works uploaded, so it would be beneficial for them to create a more robust search engine. For example, readers currently have the ability to narrow their search down to the type of material (book, magazine, newspaper, etc), but they cant distinguish writings that are already copyrighted from those that are not. If the user can decrease purchasing time, Scribd may increase sales as they learn this is a crucial function to have in order to maintain and grow their customer base. The following chart shows a layout of the different technological teams and their tasks. These teams are designed to accomplish the first and third objective.

Exhibit 7-15 Proposed Organizational chart

channel strategy
Scribd will continue to maintain a direct channel for getting the books to the reader. Authors and publishers can directly upload publications on the website which allows the direct channel to be possible. Customers simply go onto the website, search for a book, and buy it directly from Scribd. Scribd does not need to utilize intermediaries as this is an e-commerce business.

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By utilizing a direct channel strategy, Scribd is able to keep 20 percent of revenues and give 80 percent to authors (Scribd.com, 2009). The direct channel gives Scribd the ability to return a large amount of revenue to suppliers, which builds strong relationships. If Scribd were to utilize an indirect channel, an assumption can be made that both Scribd and authors would not see nearly as much return on revenue. The following table represents how customers receive the product.

Exhibit 7-16 Scribd Distribution channel

The table shows Scribd uses a direct channel to get products to their customers. Channel management is strong even though the steps to get the product to the customer are minimal. To manage this channel, the sales teams need to ensure their suppliers are downloading books in a timely fashion, and are uploading the books that are contracted with Scribd. In terms of supplier qualifications and certifications, these vary depending on who the supplier is. If Scribd is targeting publishing firms, the firms must have qualifications and certifications for copyrighting as well as permission from their authors to sell the book on the site. If they do not have permission, this could turn into a major legal issue because it is considered plagiarism as authors are not collecting revenue from their work. Individual authors do not need to have any qualifications or certifications to upload their works on the site. In terms of managing iPaper application, the Chief Technology Officer (CTO) needs to continuously maintain the site so it stays user friendly and can handle the amount of daily downloads. Scribd needs to have an enhanced scanning system for any plagiarized work to maintain credibility for the site, improving their set of best practices (Scribd.com, 2009). The Director of Communications should oversee a CRM database program to collect data regarding the customers purchase experience, and any other customer feedback that could improve the channel. Information on Scribds CRM was unavailable. It is unknown whether or not Scribd uses a CRM system to divide up their market; however, it can be assumed they have the technology and tools to heavily utilize a CRM system. If Scribd does not use CRM, they should begin to create a database for online customers to learn more about their demographics, psychographics, geographics, and behavioristics. Scribd can use the information collected about customers to further divide up the market and target the types of books specific people enjoy reading. The company can then use this information to build inventories for certain subjects of writings. Scribd has recently begun to experiment with an indirect channel to sell books. The company is allowing customers to buy chapters from Scribd, via publishing websites. The publishing companies are collecting payments for the books, and are then supplying the customers with a link to Scribd. This indirect channeling has not been utilized much, which is why the paper will focus on their direct channel. It can be assumed Scribd will maintain a direct channel for customers to buy books, as it drives traffic to their site.

Promotion Plan
The promotion plan for Scribd targets the Alternative Online Consumer. The primary goals of the promotion plan

and marketing communications for Scribd are to build brand awareness, increase visitors to site, convert visitors to customers, and differentiate from large commercial online e-book retailers.
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To do this the proposed plan uses a combination of online web advertising, increased SEO/SEM, online social media tactics, targeted print and web advertising, public relations, and event presence and sponsorship guerilla tactics in a small number of major cities such as wild postings at in selected locations and events. Promotion Plan Objectives Brand Awareness Increasing brand awareness is the primary objective of the Promotion Plan. During the initial launch phase of the plan more marketing communications dollars will be spent on print and web advertising in magazines and websites that appeal to our target market, the Alternative Online Consumer. Another important goal of the brand awareness campaign is the recruitment and nurturing of a targeted, dependable group of influencers/ambassadors, including influential authors, popular alternative bloggers and literary celebrities to reach out through blogs, interviews, and other forms of endorsements. Other elements to increase brand awareness include social media tactics and continued public relations, and solicitation of journalist reviews and articles. The goal is to increase brand awareness among the targeted market by 60% in the first 6 months, and 90% by the end of the first year. (Bianca, please check these numbers). Increase Number of visitors to the website A second objective of the Promotion Plan is to increase the number of new visitors to the website. This will be achieved as a result of the brand awareness campaign, including social media and public relations effort. The goal is to increase new visitors to the site by 15% in the first 6 months, and 25% by the end of the first year. Second and third year goals will be influenced by new market opportunities, including global penetration, and will be larger and those numbers will be based on further development of new market penetration strategies. conversion of visitors to consumers Another key objective of the Promotion plan is to increase the download and purchases of books and publications via conversion of site visitors to customers. The goal is to convert 2% of the current average number unique visitors to the site per month, currently around 50 to 60 million, to downloaders and purchasers of digital publications in the first 6 months. This conversion would generate approximately one million new customers per month, and 6 million over the six-month period. Conversion efforts will continue throughout the proposed 3-year plan, however tactics will be modified as needed. To achieve this goal, in addition to advertising and other external communications, we would offer special promotions and discounts for the first book or other publications purchased from the sight. Increase Revenues from Purchases Increasing revenues from purchases of books, publications and subscriptions are a key objective of the Promotion Plan. To be profitable, Scribd must shift the balance of revenues from advertising placement to sales from the Scribd store. Marketing communications efforts will lead potential customers to the website by promoting customer value related benefits. The goal is to increase revenues from purchases by 20% in the first year, 50% the second year and 75% the third year. Develop Loyal Online Social community Objectives of the promotion plan includes the development of community of followers who fit the characteristics and traits of the Alternative Online Consumer and support Scribds unique vision. This will be achieved through the development of a stronger Community section on the website, and will be promoted on the site, through public relations efforts and social media efforts including blogs, further development of the Scribd Twitter and Facebook pages. The goal is to increase brand loyalty, which will be observing activity on the Scribd community page, monitoring Scribd mentions and commentary on blogs and other means of Internet communication. The following table shows the goals and metrics for each of the promotion plan objectives.

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Table 7-l7 Marketing Objectives Scorecard (Source: Stacy Butchart, 2009)

Promotion theme To appeal to the Alternative Online Consumer, the promotion theme needs to be authentic and to the point. Customer value drivers of particular importance to this segment need to be taken into consideration, with an emphasis on having unique needs met, excellent product availability, a positive purchasing experience, shared values with the company, and a sense of community. The theme needs to appeal to the independent thinker persona, emphasizing that unique needs are met including their interest in non-mainstream resources. Since the primary goal is to get people to go to the site and consider purchase the theme should entice them to take a look. The promotion theme is: Explore a digital world of books and publications that matter to you. Promotion strategy The alternative online consumer is easily accessed through the Internet. Author David Meerman Scott, states The Web has opened a tremendous opportunity to reach niche buyers directly with target messages that cost a fraction of what big-budget advertising costs (Scott, 2007). Scribd is a start-up with limited revenue and a modest amount of investor funds, therefore along with a limited number of traditional marketing communications tactics, the majority of our promotion efforts will be focused around a multi-tiered web campaign. Internet/web Thought-leadership Blog or Mini-site The Online Alternative Consumer will be attracted to and influenced by thought-leadership, including blogs and articles from company leaders, writers, publishers and literary experts or celebrities. Thought-leadership can be developed on a blog page within the existing Scribd site, or a mini-site that is built to support and build a community of followers. Community Landing Page The existing Community landing page needs a stronger, more useful, more content rich landing page. The page would exhibit thought-leadership and encourage community. It could have a blog or a forum to allow customers and potential customers to discuss topics such as how Scribd can better serve their needs, types of publications they would like to see added, and community building discussions relevant to this groups customer values. This page could also evolve into a mini-site. Links on Relevant Sites Links will be placed on a variety of sites, where feasible, that are already attracting the Alternative Online Consumer.

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Social Network Sites The popularity of social networking sites is a phenomenon of the information economy. Those participating in social networking are adverse to commercial information. Instead, to get the best use of their Facebook and Twitter pages Scribd needs a format and content that is interesting or entertaining. The creation of a story line, competition, or Scribd character can attract an audience that may become a distributor of that information, thereby expanding Scribds following. It is highly recommended that Scribd hire a social networking blogger/monitor to keep any blogs or social networking efforts current and engaging. SEO/SEM Search engine optimization will be boosted by enhancing content on the Scribd website, creating a blog page or mini-site, creating a content rich Community landing page, where content is derived from customer value drivers. In addition, search terms will analyzed and put into place for best optimization results. In addition, SEM tactics would include pay per click purchased listing that generally live in a column to the right of the natural listings on general search engines such as Google and Yahoo! as well as search engines tailored to the common interests of the Alternative Online Consumer. Advertising Advertising, in this early phase of the promotion plan, will be limited to print advertisements in alternative magazines, and a web advertising campaign consisting of banner ads and SEM measures including links from the sites the alternative online consumer would most likely go to based on shared interests and other psychographics. Print Advertising Types of publications will include alternative attitude publications, such as Utne Reader magazine, alternative lifestyle publications, such as Green Living, outdoor lifestyle publications such as Mountain Biking Magazine, and news publications, such as The Economist. (Bianca please fill in correct names.) Initially a series of three ads will be developed, and will rotate on a schedule using a pulsing method to ensure frequency without risking overexposure. After six months of run time, another series will be developed and placed into the rotation. Web Advertising Whenever possible, we will secure space in the online version of the publication as well as the printed publication. If print placement is cost prohibitive for any of our selected publications we will place ads on the online versions of the magazines only. Public relations and social media Public relations will have a significant role in developing brand awareness. Relationships with influential bloggers, writers, literary celebrities, and will be developed on a one on one basis, and that group will be encouraged to become ambassadors for Scribd, by blogging, tweeting, and other forms of social media endorsement. In addition, new media relationship will be pursued and existing media relationships will be strengthened, and an aggressive schedule for press releases, announcing new partnerships, new innovations or company news will be put into place. Event Sponsorship and Participation Rather than exhibiting at trade shows to target the alternative online consumer, promotion plan dollars will be put toward sponsoring and/or participating at lifestyle types of events, such as large music festivals or urban art and literary festivals. Guerilla tactics will be used at those events, including wild postings or promotional giveaways. An example of a promotional giveaway would encourage use of the Scribd website, such as a promotional code that, when entered into the site, is redeemable for $25.00 to $50.00 worth of digital publications. Promotions Online promotions will be used to convert site visitors to customers including an offer to first time buyers that discounts the first publication purchased by 20%. campaign Plan After analyzing the companys current marketing tactics, it has become aware that Scribd needs integrate more media in their strategy to increase brand awareness and market share. Scribds current marketing plan was not available to the public, so the group has to assume the different types of marketing Scribd is doing at this moment.

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current Media Plan Scribd has recently hired Tammy Nam who is Vice President of Content & Marketing (Scribd.com) to boost their marketing program. What the group has observed is Scribd does very little marketing and relies on word of mouth to increase brand awareness. The company relies on public releases to inform consumers about recent product changes, partners, and other company related information. Scribd also markets themselves by placing their logo on documents. This way, if a document is embedded onto another website, Scribds logo will be seen by multiple markets regardless if they are reading the material on Scribds website. Other than public releases and branding, Scribd has done little marketing. The group has yet to learn about advertising on television, internet, outdoor, newspapers, or magazines. Media Plan As an online social publisher, and an e-tailer Scribd wouldnt be served best by a traditional media plan. Instead, most media dollars will go to online efforts, with a smaller budget spent on placement in selected print publications. Schedule and Timeline Following are media schedules for 2010, 2011 and 2012. 2010 is split into 6 month sections. For 2010, the advertising schedule will be he heaviest because Scribd is introducing itself for the first time through various media. Scribd will utilize a pulsing advertising schedule and will advertise heavily during the launch of Scribd, and the introduction of the three advertising campaigns.

Table 7-l8: Media Schedule 2010 (Source: Bianca Shedd, 2009)

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For 2011, Scribd will offer the same promotions and advertising in the same publications, however, it wil decrease the number of ads run in each. Scribd will still run heavy advertising in the beginning, middle, and end of the year to coincide with advertisement rotations.

Table 7-19: Media Schedule for 2011 (Source: Bianca Shedd, 2009)

For the third year, Scribd will neither increase nor decrease advertising from the previous year. Scribd wants to maintain this amount as they will still continue to introduce new products and advertise upgrades to current products and services.

Table 7-20: Media Schedule for 2012 (Source: Bianca Shedd, 2009)

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Pricing Plan
Pricing Objectives
The table below establishes the pricing dynamic of Scribd in their market by identifying key performance indicators. This table will help determine the pricing plan objectives, as well as select a pricing method.

Table 7-21 Pricing Dynamics (Source: Robert Harmon Lecture Slides, 2009)

Level of Desire for the Product/Service


Cloud computing and social publishing networks have become very competitive markets, and many people are looking for a place to store and publish their work. Scribd has the worlds largest readership for a social publishing networks with around 60 million readers each month. (Scribd.com, 2009)

Distinctiveness from competitive Offerings


Scribds innovative technology is distinctive from its competitors, but their offerings are similar to many of their competitors. This is why Scribd fits under both categories of substitutes and distinctive. Although Scribd has industry leading technology, it is easy for competitors to convert their software to compete. Scribd has been named in the top fifty best technology startups by Business Week and YouNoodle; due to their distinctive publisher partnerships and rapid growth (Ricadela, 2009).

Importance of Price in the value Equation


Being a web-based company means that the consumers have Scribds competitors prices at their fingertips. Amazon in particular has extremely competitive prices on e-books. Although Scribd may not be the low price leader, they are helping writers and publishers cash in. Many displaced authors or journalists are turning to make profit is Scribed, which invites journalists to publish their work, reach new audiences and potentially profit from stories that cash-strapped news organizations might not have the resources to publish. (Tenor, 2009)

Ease of Duplicating the competitive Advantage


New and improved technology is constantly being innovated. Advanced technology such as iPaper, and enhanced embedding capabilities is what currently gives Scribd a competitive advantage. The competitive advantage which will be hard for competitors to duplicate is Scribds unique partnerships with publishers. Simon and Schuster will offer 5,000 e-titles through Scribd (Rothman, 2009).

Speed of return on Investment


Scribd is able to profit from both publication sales and marketing, and receives payment upon each purchase. Scribd is also able to outperform their competitors by sending the sellers of publications emails and up to date sales reports every time they sell a product, unlike their competitor which often produce reports every 6 weeks. (Savikas, 2009)

Importance of Innovation
To keep their competitive advantage, Scribd must constantly have industry leading technology. Scribd is constantly looking for ways to solve consumer problems through continuous innovation. One way they do this is ensuring protection to writers by sending all salable content though a copyright verification system. (Slattery, 2009) Scribd believes in liberating the written word though technology At Scribd, we built a technology thats broken barriers to traditional publishing and in the process also built one of the largest readerships in the world. (Scribd.com, 2009)
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Importance of Personal Selling


Scribd is a social publishing network, which is what differentiates them from many of their large competitors. Scribd truly believes in making their service a personal experience, they have created a place where everyone can be a part of the publishing experience. Scribd is constantly updating their website interface to ensure ease of use and quality. These are the first of many improvements that are designed to make it easier for Scribd users to create communities around works they love and to communicate to their readers and friends. (Scribd.com 2009) The key pricing indicators (KPIs) help evaluate the market situation, and evaluate the best pricing strategy. They have showed Scribds differentiation in the market as well the importance of innovation, personal selling, and price. The KPIs above show that the pricing dynamic leans towards skim pricing.

Pricing Strategy value-Based Pricing Model


Due to the importance of customer intimacy in Scribds business structure, we thought a value-based pricing structure is recommended for Scribd. The value-based pricing structure is based on the customers perceived value of the product or service .This pricing structure facilitates building CRM with the consumer, as well as the lifetime value of the customer.

Perceived value
Perceived value is part of a value-based pricing, in which the value the exchange for it or payment. (Harmon, 2009) Currently Scribd is charging a premium price for some of the publications, this is because they let the author choose the price, and give the copyright owner 80 percent of the selling price. This pricing freedom has caused many writers and publisher to charge more for the materials, compared to Amazon. Scribd also offers a second option for pricing called automatic pricing. With automatic pricing the author can use Scribds algorithm program to determine the best price for the document. With either offer the minimum charge is one dollar. (Scribd.com, 2009)

Skimming
Skim pricing is part of a market-based pricing strategy. In order to have market-based pricing strategy, a business must focus on competitors as well as customers. (Best, 2009) This includes a broad understanding of the customers needs, and the ability to produce a product that meets those needs especially the needs not being meet by competitors.

value-Based Hybrid Pricing


Hybrid is a combination of both skim and penetration pricing, where the goal is to gain a margin above recovering the total cost. Another important aspect of a hybrid plan is that there is a concentration of second market discounting, which maintains a premium price or skim the gained market, while discounting for new entrants. To successfully gain market share In this competitive industry, Scribd has to find a way to reach out to new users. This pricing structure is customer centric based, as well and financial goal oriented. There are several ways for Scribd to adjust their pricing plan to offer incentives to new users. One example is promotions, such as discounts for initial purchases or for a trial period. We also propose that Scribd should offer a membership programs for schools, businesses, and individuals. These pricing strategies can help Scribd obtain higher sales, as well as bridge the competitive gap with Amazon. Scribd needs to find creative ways to differentiate their pricing strategy from competitors in order to gain market share, while still maintaining their core values. The table below illustrates the correspondence between perceived value and potential price levels. This table helps explain the current pricing strategy, and plan for future pricing strategies.

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Key A B c D e

Strong premium price Premium Price Price equal to the competition Moderate discount necessary Deep discount needed

Table 7-22 Perceived value (Harmon, 2009)

customer Reactions
Scribd seems to be getting a good reaction from customers, although they dont generally compete with Amazon, when it comes to best-seller prices, scribd often is viewed as generally inexpensive. Customer are happy with the content and reading experience which gives Scribd a high perceived value, which in return translates in the a higher willingness of the consumer to purchase.

competitor Reactions
competitor reactions from Scribds main competitors is relatively low. Amazon is a large enough company that they are not extremely concerned with startups such as scribed. Amazon deals in volume, and has enough market share that they can price accordingly. Amazon is able to take a small hit on best-sellers, to promote their low-cost price structure.

Break Even Analysis

Table 7-1 Break Even Analysis (Source: Liam Flaherty, 2009)

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SecTion 8

implementatiOn
Scribds implementation plan coincides with the marketing strategy described the previous section, Marketing Strategy. The plan provides a road map to assist in the achievement of all the objectives Scribd must meet increase profits and value, and remain the innovation leader in the online publishing and e-book sales industry. This section includes financial information, including the overall marketing budget, and recommendations for staffing and resources. The financials include a three-year pro forma profit and loss statement, and a capital budget. Each of those are expanded upon. The financial analysis is a tool for Scribd to help manage and control the marketing plan in gaining market share and launching of the Scribd reader device in late 2011. The section concludes with the organizational requirements need to implement our plan, including Scribds new organizational structure and required new head count.

Financials
The financial will show what the impact to the company will be over the next three years. They will be analyzed using the pro-forma P&L (Profit and Loss) statement. The P&L will be broken-down monthly for the first year and then quarterly for year two and three. This will be the format for the marketing budget marketing communications budgets, and capital budgets Three-year Pro Forma P&L The forecasted three year profit and loss potential of Scribd is presented by using a standard profit and loss (P&L) model. To complete the model Scribds sales and cost of goods sold (COGS) were first calculated to find out the companys gross profits over the next three year. The next step that needed to be completed is the calculation of the companys operating expenses which included (SGA) sales, general and administrative, and (R&D) research and development expenditures. The third step is to subtract the total operational costs from the gross profits to determine total income from operations otherwise known as EBIT. The fourth and final step is to deduct taxes, which are discounted at the standard rate of 35%. Once all calculations are completed the model flushes out Scribds net profits for each year. This is done on a monthly basis for the first year and quarterly for years two and three. Gross Sales and Revenue Gross sales and revenue are based on sales forecasted from the Marketing Opportunity Analysis the forecasting model states that Scribd will capture 15-19% of the total e-book by the end of three years including the release of the Scribd e-reader. Analysis of the TAM shows that Scribds e-book market will reach 140 million people by the end of 2011. With a 15-19% of market share, Scribd should sell around 67 million e-book over the three years. With Scribds user based pricing structure the average gross profit will be an estimated $483 Million over three years. The P&L charts are on pages 78 and 79. cOGS (costs of Goods Sold) Costs of Goods Sold are the direct costs attributable to the production of the goods sold by a company. This amount includes the cost of the materials used in creating the good along with the direct labor costs used to produce the good. It excludes indirect expenses such as distribution costs and sales force costs. COGS appear on the income statement and can be deducted from revenue to calculate a companys gross margin (Answer.com 2009). For Scribd, the COGS takes into account the 80/20 split that it gives to the publishers. It also includes a 1% cost for the downloading, uploading and storage of the document. This number must be averaged due to the fact that each document is priced individually by the publisher. Over the next three years the estimated COGS has been forecast to increase from 81% to 81.5% in year two and 82% in year three. Research and Development Research And Development (R&D) is the investigative activities that a business chooses to conduct with the intention of making a discovery that can either lead to the development of new products or procedures, or to improvement of existing products or procedures(Investopedia.com, 2009). Scribd R&D costs over the next three years are estimated to be 10%, 12%, and 20% per year based on gross sales for the month or quarter, depending on year one, or year two and three. R&D over the three years is estimated to be $56,320,237. R&D must be constantly on the rise for Scribd to take a leadership position in the industry.
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Taxes Taxes for Scribd are estimated at the industry standard of 35% of income from operations.

Table 8-1 2009 P&L

Table 8-2 2010 P&L Projections

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Table 8-3 Totals 2009-2011 P&L

Marketing Budget
The marketing budget is one of the more difficult parts of the marketing planning process. Specifying the budget does not need to be a precise process but allocations must represent a logical connection with the strategy and performance objectives. (Best, 2009)For Scribd this really rings true with the user of the service setting prices it is fairly hard to estimate the forecasted yearly sales. Scribds marketing budget is formulated using the projected sales approach. The is a method where the marketing budget is based off of projected sales and using past marketing information as a percentage of sales. The total marketing budgets are listed in the following table moving from the three year total and then working from year though to the third year.

Table 8-4 Total Marketing communication Budget

Scribds SGA budget starts out at 7% for year one and increases to 10% as the company hires more employees and ramps up to release the Scribd e-reader in Q4 2011. The marketing plan is also lower in the first year and ramps up for the launch of Scribd e-reader.

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The marketing budgets below show how the marketing budget was broken down over the three years. This was a substantial part of the overall marketing budget. This is due to the fact that Scribd is trying to brand awareness, increase number of visitors to the website, conversion of visitors to consumers, increase revenues from purchases, develop loyal online social community.

Table 8-5 Totals SGA 2009

Table 8-6 Marketing Budget 2010

Table 8-7 Marketing Budget 2011

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controlling the Marketing Plan


Scribds intent is to run an integrated marketing campaign. Integrated marketing communication is an aggressive marketing plan that captures and uses an extensive amount of customer information in setting and tracking marketing strategy (entarga.com, 2009). This will insure that consumers will be provided with consistent messaging and branding throughout the marketing campaign. All branding and other marketing communications will need approvals from content and brand managers. Internet: The majority of the communications budget will be dedicated to website expansion, SEO/SEM, blogging and minisites, and the development of a strong and influential ambassador program aimed at writers, publishers, literary celebrities and celebrity bloggers. Advertising and Marketing communications The advertising will continue thought 2010-2011 concentrating on the Internet media and social media tactics, including a strong thought-leadership campaign and a community-based mini-site. There will be a limited print advertising campaign as well. In 2012 there will an additional campaign to launch the new e-reader. This will include the same tactics as the primary campaign. Promotions and Sponsorships Promotional dollar spent will be 3% of the marketing budget. Promotions will include 25% and 50% e-coupons that will be redeemable on the next purchase. This will continue through 2011. In 2012 promotions will be geared towards sales and adoption of the e-reader. A separate sponsorship budget will be set aside for special events, schedule to be determined. capital Budget

Scribds capital expenditures are minimal at this time. The company rents their office space and the servers. As the company grows and begins ramping up to produce the e-reader the company will began to purchase a substantial amount of capital items.
Initial Rate of Return/Return on Investment Initial Rate of return (IRR) is a very important number. IRR is used by many people in the business as a standard to judge a companys profitability of an investment project. The internal rate of return on an investment or potential investment is the annualized effective compounded return rate that can be earned on the invested capital. In more familiar terms, the IRR of an investment is the interest rate at which the costs of the investment lead to the benefits of the investment. This means that all gains from the investment are inherent to the time value of money and that the investment has a zero net present value at this interest rate. (Feibel, 2003) After the investment and the project go live the ratio used to evaluate the products is the Return on Investment ratio. Performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. To calculate ROI, the benefit (return) of an investment is divided by the cost of the investment; the result is expressed as a percentage or a ratio. (Investopedia.com, 2009) For Scribd the ROI and IRR are: IRR: 7.79% ROI: 113% Based on all this information it is recommended that Scribd continues to grow their market share in the E-book market and in 2011 release its own readers which will compete with Amazons Kindle and the Sony e-reader. controlling the Marketing Plan A level of control needs to be maintained to ensure that Scribds marketing plan stays on track and is implements both properly and in a timely manner. This will be managed with a pre-launch timeline, which will deal with logistics, product development and marketing items. The post-launch timeline will focus more on metrics to measure the success of the marketing plan.

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Time Line Launch The pre-launch activities for the Scribd e-book reader started in August 2011 and fall into two very distinct categories. The first being the product timeline which consists of product development, product packaging, product testing, manual development, manufacturing ramp and finally, product in stores. The second category is Marketing Timeline which involves announcing the reader, marketing strategy development, marcom plan, advertising plan, website plan and SEM/SEO plan. In the last five weeks of this timeline, from the fourth week in November until the end of December 2011, the product and promotional materials are rolled out into the retail setting. The Scribd reader will officially be available at that point and should be a rousing success. Table 8-8 displays the timeline for all the prelaunch activities.

Table 8-8 iPhone Pre-launch Timeline

Tracking & Monitoring Once the pre-launch activities are complete and the product is launched and in the marketplace, the focus switches to monitoring the effectiveness of the marketing plan implementation. Chart 8-9 below shows only the first 6 months of the monitoring of the marketing plan.

Table 8-9 iPhone Post-launch Timeline

In an effort to properly monitor the marketing plan via the post-launch timeline (Table 8-9), there are a number of metrics that will be reviewed to ensure satisfactory performance. Marketing Metrics Market Research: Market research will help to figure out where Scribd is in the market in terms of penetration and growth in new markets.

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competitive Analysis: This will track how well Scribd is doing relative to their competitors in terms of service and products. Brand Awareness Survey: This survey will track the overall awareness of Scribd as a brand. By July 2010, Scribd hopes that brand recognition is increased by 75%. customer Satisfaction survey: Customer satisfaction regarding the e reader product/service will be measured one month after launch and every month after that. Advertising Effectiveness: This will be evident based on the results of the brand awareness surveys. Product Availability: Availability will be tracked indefinitely after launching the product. This will ensure that supply meets demand and will limit the missed sales. Financial Metrics Marketing Budget: Marketing budget will be compared to the net profit that is in the pro forma plan for 2009, 2010, and 2011. Sales Revenue: Sales revenue will be compared to the net profit that is in the pro forma plan for 2009, 2010, and 2011. Gross Margin: The margin for the e book reader will be 50% of sales. Tracking this will ensure that any potential pricing issues are flushed out before they are a major problem. Net Profit: Net profit will be compared to the net profit that is in the pro forma plan for 2009, 2010, and 2011. Reporting In order to keep Scribd running optimally, the founders and managers will need to keep track of their valuable metrics that will alert them if there is a potential problem coming or if they are in the middle of one. Table 8-10 below is what a theoretical dashboard could look like for Scribds monitoring efforts for 6 months after launch.

Table 8-10 Theoretical Marketing Plan control Dashboard

Using the above dashboard to keep track of many different aspects of the marketing plan is essential for success. This dashboard will enable Scribd to react nimbly whenever an issue is raised.

Organizational Requirement
This section of the paper is a summary of objectives, space information and systems requirements that are need to implement and maximize Scribds planned attack on e-book and e-reader competitors. Without a well thought out plan, Scribd will not be able to adapt to the rapidly changing environment. An analysis needs to be made to determine where Scribd sits within the market in terms of its basic approach, competitive advantage, targeted segments, customer focus, integrated marketing, use of information, integration, brand strategy and promotion strategy. The method used to analyze the all of these factors was adapted from Robert Harmons Level 5 Market Leadership Model. The model is organized on ten market leadership factors. Each factor is given a level 1 rating for naive planning to level 5 rating for fully integrated planning (Harmon, 2009).

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This will be further discussed and presented in the next few pages, comparing and contrasting where Scribds organizations is, with recommendations as to how to get to a Level 5 organization. Objectives The objectives for Scribd are as follows:

1.

Create a market leadership by leveraging Scribds technological advantages while building a customer relationship which involves them in the value created by using the services that Scribd Provides. This will move Scribd from a level 4 company to a level five. Create a command structure that encourages integrated marketing planning. Hire the best people to insure that the company grows as rapidly as their market share. This will include staffing for the proposed e-reader launch in 2011.

2. 3.

Table 8-11 Organization Level

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Organization Plan: Scribd currently has a Level 4 organizational structure. The marketing organization is shown in the chart below. All marketing employees report to Tammy H. Nam, Vice President of Content and Marketing. All Vice Presidents report to Scribds President George Consagra, who reports to Trip Adler the CEO and co-founder of Scribd. All engineers report to the CTO Jared Friedman. The Senior Director, Jack Leidlei, Finance Accountant, and In-House Recruiter all report to Mike McGuinness, Vice President, Business Development . In all there are 23 total employees at Scribd.

Exhibit 8-12 Organization Plan

Space, Information, and Systems Requirements In order to successfully launch and support the e-book reader, an for general growth, Scribd will need to expand their office space for for a minimum of 23 total employees. This will require at least 3,000 square feet of office space, which includes offices and conference rooms. The Scribd e-book reader SBU will use the current engineers for Scribd to assist with any overflow work that needs to be completed. The Scribd e-book reader SBU will join with the Scribd SBU in the future to help Scribd move closer to a Level 5 organization. With the eventual merger, there will be no rise in number of employees due to the highly efficient advanced nature of a Level 5 organization.

conclusion
In this section, financials were covered with a three-year pro P&L and marketing budget, pre- and post-launch timelines, and organizational requirements. From this an implementation plan was created. The results from this section show that Scribd has a strong financial future. Even with a relatively large R&D budget, Scribd still maintains strong financial growth. The e-book space is going to get even more competitive, and Scribd would be at a great advantage if able to dedicate a considerable amount of funds to developing an e-book reading device. The metrics created will help Scribd keep going in the right direction and assist in a healthy, strong implementation of the marketing plan.

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SecTion 9

plan cOnclusiOns
In determining the investment opportunities and viability of this company, it can be concluded that the potential for success far outweighs the risks. After thorough research of the industry, and the analysis of the frame in which Scribd operates within, the companys opportunity maximization was presented. The results formulated are not just merely numbers and words on a page, yet they are backed by factual evidence, a massive following in-tune with what Scribd has to offer, big-time publishing companies who already have an invested stake, and venture capitalists that have stuck by the culture and philosophy developed by the founders from the beginning. Even after unraveling the veil with all of the potential weaknesses and threats, there is no doubt that Scribd can overcome these obstacles. They have designed a marketing strategy with the intended audience in mind, and constructed objectives that are measurable, achievable, and focused on building value. Scribd continues to attract tens of million of followers, and July 2009 was no different topping the charts with 55 million new unique users. The TAM is 53.8 million individuals that have a buying power equaling $1.3 billion and a SAM (Alternative Online Consumer) of 23.3 million individuals with a buying power of over $550 million. The immediate revenue for the SAM will near $25 million, and the overall revenue for the first year is estimated to reach $28 million. The market potential and opportunity for revenue growth will enable sustainable business operations and provide a healthy ROI (Return on Investment) of 141%, and an IRR (Initial Rate of Return) equaling 7.79%. The growth strategy is geared towards forward moving innovative product progression and building value among the target markets. All segments will benefit from enhanced audio features and video embedding capabilities. The platform strategy is aligned with the growth of service and product offerings, enabling expansion of mobile platforms including the iPhone, iPod and Sony E Reader. Scribd demonstrates responsible thinking, allocating enough time to gain a larger share of the market before transitioning into the co-branded portable reading device. This overall model adopted many theories from Kim and Maugborgnes Blue Ocean Strategy, illustrating the ability to drive down costs and increase value. This companys overall strategy truly has the capabilities to alter the parameters that the industry currently operates within and change how the world reads altogether. Scribds vision, generous partnership, and excellent attention to customer service help to position them as the online publisher and book seller who cares. While this company is up against giants in the industry, they will take on an approach that allows them to operate on a different field. The uniqueness of their service enables them to set their own benchmarks and establish goals driven by the wants and needs of the consumer. Both cognitive and affective positioning also works for Scribd, as they provide the most diverse offerings to their customers, and a vision and set of values that appeal to the target market. In the first two years of this young company they were able to illustrate the ability to build a service with the customer in mind. This demonstrates that customer intimacy leadership has always been a core competency, and this approach will be built on moving forward, as they continue to facilitate the cocreation of ideas in building value for the people who actually are using the service. Scribds brand strategy will concentrate on transcending product features and benefits that make emotional connections with their consumers. The focal point of their brand personality will be surrounded by themes including intelligence, innovation, thoughtfulness, and customer-first. All of these traits resonate with the Alternative Online Consumer. With a direct sales and distribution method, Scribd is able to cut out intermediaries and lower overall costs. Scribd will focus on a hybrid value-based pricing structure, which includes both skimming and penetration. Penetration pricing will help Scribd bring in new users with special promotional offers. Scribd will continue to skim their current customer base, and adapt new hybrid pricing options. With the introduction of annual newspaper and magazine subscriptions, along with a Preferred Customer Plan, loyal Scribd users will continue to see increased value in the service, and new entrants will get a chance to experience Scribd at a reduced cost during their trial period. Scribd will be able to realize a margin of 19%, in tune with sustaining the flexible pricing structure while maintaining a healthy return. This marketing plan has identified a feasible and profitable opportunity for investment. A thorough understanding of the framework surrounding this company indicates all the signs for success in implementation. With a service that is capable of altering an entire industry, a massive following in support of a sustainable culture, and the ability to change how the world will read altogether, Scribd has nowhere else to go, but forward.

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BiBliOgraphy
About Us. (n.d.). Retrieved July 12, 2009, from Scribd: http://www.scribd.com/about/ This information is relevant to our project because it gives us general information about the company, its culture, and insight on their big idea. Adobe-Flash Player Statistics. (n.d.). Retrieved July 19, 2009, from Adobe: Adobe.com. (n.d.). Adobe-Flash Player Statistics. Retrieved July 19, 2009, from Adobe: http://www.adobe.com/products/player_census/flashplayer/ Allen, N. (2008). Course correction: How digital textbooks are off track, and how to set them straight. Retrieved July 22, 2009, from http://www.maketextbooksaffordable.org/newsroom.asp?id2=44596 Amazon.com. (n.d.) Amazon Simple Storage Service. Retrieved July 19, 2009, from Amazon: http://aws.amazon. com/s3/ Amazon.com. (2009). Kindle: Amazons Original Wireless Reading Device. Retrieved July 19, 2009, from http://www. amazon.com/Kindle-Amazons-Original-Wireless-generation/dp/ Antes, S. (2009). An E-Book Upstar With Unlikely Fans. Retrieved July 19, 2009, from http://www.businessweek.com/ magazine/content/09_25/b4136054153678.htm This source provided us with details on a large publishing companies decision to publish 4,500 electronic titles on Scribd and a overview of Scribd itself. This article will better help us to understand market entry in this industry. Arrington, M. (2009, April 16). Amazon: 300,000 Kindle 2s sold, Up to 1 Million Expected. Retrieved July 11, 2009, from Seeking Alpha: http://seekingalpha.com/article/131292-amazon-300-00kindle-2s-sold-up-to-1-millionexpected-in-2009 Bently, J. (2008, March 1). What kind of infrastructure is behind the Scribd API? Retrieved July 12, 2009, from Scribd Support Desk: http://support.scribd.com/forums/33938/entries/25568 Berry, L. (2000). Cultivating Service Brand Equity. Journal of the Academy of Marketing Science, 28 (1) , 128. Best, R. (2009). Market-based Management: Strategies for Growing Customer Value and Profitiability. Upper Saddle River, New Jersey: Pearson Prentice Hall. This source provided theories on the elements that go into the most productive buying situations. This article will bring better understanding of management strategies and how to apply them to our market strategy and development. Castelluccio, M. (2009, June). Plastic Newsprint, Digital Ink. Strategic Finance, pp. 67-86. This source provided general information on the Kindle device and its offerings. The article was based on the paper industry and its digital change over with the help of the internet and electronic reading devices like Kindle. Claburn, T. (2009, May 18). Scribd Opens Online Store for Documents, E-Books. Retrieved July 6, 2009, from Information Week: http://www.informationweek.com/news/personal_tech/drm/showArticle.jhtml?articleID=217500704 Crunchbase.com. (n.d.). Amazon Company Profile. Retrieved July 17, 2009, from Crunchbase.com: http://www. crunchbase.com/company/amazon Crunchbase.com. (2009). DocStoc Company Profile. Retrieved July 19, 2009, from Crunchbase.com: http://www. crunchbase.com/company/docstoc Crunchbase.com. (2009). Scribd Company Profile. Retrieved July 10, 2009, from Crunchbase.com: http://www. crunchbase.com/company/scribd Dickenson, D. (2008). Media Strategy & Planning Workbook. Docstoc.com. (n.d.). Upload Documents. Retrieved July 19, 2009, from Docstoc: http://www.docstoc.com/upload/ Donalson, S. (2009, Mach). Knowledge-Sharing Is King. Black Enterprise, p. 44. This source provided information on both Scibd and their largest service competitor DocStoc. It described benefits of each and opportunities they provide. This article will help us evaluate the competitor analysis.

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Dunn, M. &. (2003). Building brands from the inside. Marketing Management, 12(3) , 32-37. Farnsworth, A. (2009, June 12). Scribd, the YouTube of e-books, signs major new deal. Retrieved July 5, 2009, from The Christian Science Monitor Horizons Blog: http://features.csmonitor.com/innovation/2009/06/12/scribd-theyoutube-of-e-books-signs-major-new-deal/ Financial Edge. (2009). On This Day In Finance: June 29-Apple iPhone. Retrieved July 19, 2009, from Financial Edge: http://financialedge.investopedia.com/financial-edge/0609/On-This-Day-In-Finance-June-29---Apple-iPhone.aspx Frucci, A. (2007, November 19). Amazon Kindle Delivers Free EV-DO Whispernet. Retrieved July 24, 2009, from Gizmodo: The Gadget Blog: http://gizmodo.com/gadgets/amazon-kindle/amazon-kindle-delivers-free-ev+dowhispernet-service-324310.php Gonzalez, N. (n.d.). YouTube for Documents Gets $300. Retrieved July 30, 2009, from Techcrunch.com: http:// techcrunch.com/2007/03/06/scribd-youtube-for-text-gets-300k/ Guardian. (n.d.). Ebook timeline. Retrieved July 19, 2009, from Guardian: http://www.guardian.co.uk/books/2002/ jan/03/ebooks.technology Harmon, R. &. (1997). Linking Market Strategy to Customer Value Implication for Technology Marketers. Innovation in Technology Management, 897-900. Harmon, R. (2009). MKTG 464 Class lecture 1. slides 63. Harmon, R. (2009). MKTG 464 Class lecture 3. slides 37, 41-19. Harmon, R. (2009). MKTG 464 Class lecture 4. slides26, 31-36. Harmon, R. (2009). MKTG 464 Class lecture 5. slide 36. Harmon, R. (2009). MKTG 464 Class lecture 6. slides 3-9. Hecker, D. (2001, November). Occupational employment projections to 2010. Retrieved July 8, 2009, from Montly Labor Review: http://www.bls.gov/opub/mlr/2001/11/art4full.pdf Holahan, C. (2007, November 20). Can Amazon Kindle Digital Book Fever? Retrieved June 30, 2009, from Business Week Online: http://www.businessweek.com/technology/content/nov2007/tc20071119_359441.htm This source provided more information on specifications and the capabilities of the Kindle device. The article also give us insight on how consumers view the product, its strengths and weaknesses. Hoovers.com. (n.d.). Amazon Company Profile. Retrieved July 21, 2009, from Hoovers.com: http://premium.hoovers. com/subscribe/co/factsheet.xhtml?ID=hrcsyxxckchhyf Hoovers.com. (n.d.). Docstoc Company Profile. Retrieved July 17, 2009, from Hoovers.com: http://premium.hoovers. com/subscribe/basic/factsheet.xhtml?ID=hrjfthf Hoovers.com. (2009). Scribd Company Profile. Retrieved July 17, 2009, from Hoovers.com: http://premium.hoovers. com/subscribe/co/factsheet.xhtml?ID=rjrtcyxtkfrcysh Inside Track. (2008, September). PC Magazine. This source provided information on Scribds iPaper ADI technology and discussed online storage and universal formatting applications. This article provides us with information about our product and its competitive advantages over current technology. Kim, W. Chan and Renee Mauborgne (2002), Charting Your Companys Future, Harvard Business Review, June, 5-11. Mahajan, V. (2002). Got Emotional Product Positioning? Market Management, 36-41. Mintel Reports. (2004, July). Online Books-US. Retrieved July 10, 2009, from Mintel.com: http://oxygen.mintel.com/ sinatra/reports/display/id=67234 Rich, M. (2009, May 31). Google appears to be throwing down the gauntlet in the e-book market. Retrieved July 12, 2009, from nytimes.com: http://nytimes.com/2009/06/01/technology/internet/01google.html Riley, F. &. (2000). The Service Brand as Relationships Builder. British Journal of Management, 11(2) , 137-150. Savikas, A. (2009, July 7). What EBook Resellers Should Learn from Scribd. Retrieved July 11, 2009, from Tools of Change for Publishing: http://toc.oreilly.com/2009/07/what-ebook-resellers-should-learn-from-scribd.html
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Scott, D. M. (2007). The New Rules of Marketing and PR. Hoboken, NY: John Wiley & Sons. Scott, K. (2009). Scribbling for Scribd. Publishers Weekly (256), 58-58. This source provided information directly from a publisher that has used Scribd. Explains the operations of Scribd and the Copyright Management System. This information is useful for us to understand how our company builds good strategic partners with the publishers. scribd.com. (n.d.). About Us. Retrieved July 12, 2009, from Scribd: http://www.scribd.com/about/ Snyder, C. (2009). Major Publishing Partners with Scribd for Viral E-Book Marketing. Retrieved July 2, 2009, from Wired: http://www.wired.com/epicenter/2009/03/publishers-part/ Stokes, J. (2009, July). The future of scholarship? Harvard goes digital with Scribd. Retrieved from arstechnica.com: http://arstechnica.com/media/news/2009/07/the-future-of-scholarship-harvard-goes-digital-with-scribd.ars Switch 11. (n.d.). The Future of Publishing Amazon Kindles Role. Retrieved July 16, 2009, from Switch11: http:// ireaderreview.com/2009/06/21/the-future-of-publishing-amazon-kindles-role/ Trachtenberg J, &. F. (2009, July). Barnes & Noble challenges Amazon Kindle. Wall Street Journal, pp. B1-B6. U.S. Census Bureau. (2007). 2007 Economic Census. U.S. Census Bureau. Virginia Tech. (n.d.). Demographics, Spring 2008, Profile of the American College Student. Retrieved July 18, 2009, from VirginiaTech.edu: www.dsa.vt.edu/facultyandstaff/documents Virginia Tech. (2008). Student Demographics, Spring 2008 Results, Profile of the American College Student. Retrieved from Viginia Tech: www.dsa.vt.edu/facultyandstaff/documents,

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SecTion 12

lists Of figures
Figure 2.5 Scribd Value Curve Scribd vs. Amazon ...................................................................................10 Figure 2.6 Scribds New Value Curve Present vs. Future .........................................................................12 Figure 4-2 Segment Profile Curve...............................................................................................................25 Figure 4-3 Segment Attractiveness based on Weighted Averages .............................................................26 Figure 5-7 Competitive Factors Comparison ..............................................................................................38 Figure 7-1 Marketing Objectives Dashboard ...............................................................................................52 Figure 7-2 Scribds Ansoff Matrix................................................................................................................53 Figure 7-3 Scribd Growth Strategy Options................................................................................................54 Figure 7-5 Scribds Three-Year Growth Strategy into a Blue Ocean ............................................................56 Figure 7-6 Scribd Product Platform ............................................................................................................56 Figure 7-7 Scribd Radar Chart ...................................................................................................................57 Figure 7-9 Transition Map...........................................................................................................................61 Figure 7-11 Product and Platform Strategy ................................................................................................64
SecTion 13

lists Of taBles
Table 2.3 Feature Advantage Benefit Requirements for Readers and Consumers .........................................9 Table 2.4 Feature Advantage Benefit Requirements for Writers and Publishers ...........................................10 Table 3-3 Scribd Comparative Assessment and FAB Analysis ....................................................................18 Table 4-1 Segments and Summary of Criteria Used to Analyze Each Segment .........................................25 Table 4-5 Segment Potential ......................................................................................................................27 Table 5-5 Competitive Factors Customer perspective ............................................................................37 Table 5-6 Competitive Factors Weighted Averages Customer perspective .............................................38 Table 5-7 Company Strategy, Brand Position, Growth Strategy, and Market Strategy by Competitors ........41 Table 5-8 Best in Class Rating ...................................................................................................................42 Table 6.2 Risk Factors Scribd ..................................................................................................................48 Table 6-3 Success Factors Scribd .........................................................................................................49 Table 7-8 Key Value Drivers Relative to the Competition .............................................................................59 Table 7-10 KPI Variables Growth Strategy Plan Objectives .........................................................................63 Table 7-12 Product Costs ..........................................................................................................................65 Table 7-l7 Marketing Objectives Scorecard.................................................................................................70 Table 7-l8: Media Schedule 2010 ...............................................................................................................72 Table 7-19: Media Schedule for 2011.........................................................................................................73 Table 7-20: Media Schedule for 2012.........................................................................................................73 Table 7-21 Pricing Dynamics ......................................................................................................................74 Table 7-22 Perceived Value .......................................................................................................................76
SecTion 14

lists Of exhiBits

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Exhibit 2.1 Simon and Schuster Featured on Scribd Store ...........................................................................7 Exhibit 2.2 Scribd Relationship Graph ..........................................................................................................8 Exhibit 3-1 Example of Scribd.coms file download/upload flow ................................................................16 Exhibit 3-2 Side-by-side comparison of Scribds and Amazons user download flow ..................................17 Exhibit 5-1 Scribd First Year Porters Five Forces Model .............................................................................29 Exhibit 5-2 Scribd Second Year Porters Five Forces Model........................................................................32 Exhibit 5-3 Scribd Third Year Porters Five Forces Model ............................................................................32 Exhibit 5-4 The Scribd Business Ecosystem ..............................................................................................35 Exhibit 6-1 SWOT Analysis Table................................................................................................................45 Exhibit 7-4 Image of Co-Branded Scribd/Sony Reader ..............................................................................55 Exhibit 7-13 Cost of Data Transfer and Storage..........................................................................................65 Exhibit 7-14 Current Organizational Chart ..................................................................................................67 Exhibit 7-15 Proposed Organizational Chart ...............................................................................................67 Exhibit 7-16 Scribd Distribution Channel ....................................................................................................68

SecTion 15

appendices

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Project Proposal Template


State the Business Case
Course Title: Team Number:
Mktg.464: Market-based Management Team 2

Instructions: Use this form to submit you marketing plan proposal. Fill in the expandable boxes on the right. You should expect the final document to be 3-5 pages in length.
Scribd: A 3-year Marketing Plan Targeting Consumers and Partners The business opportunities for Scribd are multi-dimensional. For a three-year plan we would want to focus on some key opportunities that are most relevant to profitability and gain in market share, focusing on those market segments that are best matches with the current Scribd offering, based on their unique platform, the iPage document sharing innovation. These include the following goals and objectives: 1) Gain partnerships with the major publishers of books and textbooks, nationally and internationally. 2) Gain mindshare of educators and administrators at major colleges and universities. 3) Gain mindshare of consumers of published works in multiple categories, and specifically in the areas of business, education and entertainment. 4) Add additional services available to the authors and publishers to maintain competitiveness. 5) Take advantage of advertising opportunities on scribd.com as another source of revenue. 6) Proactively expand platform applications to ensure their position as the most flexible, and accessible platform for digital reading. Total Market Available is difficult to estimate at this point due to the large numbers of readers nationally and internationally. We can look into competitors market numbers and specifically to the Amazon Media division of Amazon, who, according to 2008 figures, is considered the largest book seller. Amazon Media had $5.35 billion in national sales, and $5.73 billion internationally (Rosenthal, 2009). According to Scribd.com we know that they have more than 60 million readers every month, and there are publications on their site in 90 different languages. We would also estimate SAM by defining the total number of students attending national and international

1. Project title:

2. Describe the business opportunity. Include TAM/SAM estimates.

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All Right Reserved

colleges and universities and average dollars per year spent. Rosenthal, Morris (2009). North american book market. Retrieved June 28, 2009, from Foner books Web site: http://www.fonerbooks.com/booksale.htm

3. Describe the potential segments to be targeted. Who is the customer?

Scribds potential consumer segments to be targeted include: consumers, business, education, government and special organizations. Consumer: The consumer segment is a very broad it will include everyone that download/reads printed material for the following (personal) reasons: Recreation Education Self-betterment Business: The business market is inclusive of all businesses who stand to benefit from Scribd for the following reasons: Research (sharing and obtaining) Embedding articles and other printed resources into company website Education: Upper education schools stand to benefit from using Scribd for the following reasons: Research (sharing and obtaining) Textbooks and other printed educational materials Public Information Government: Consumers within the government segment stand to benefit from using Scribd for the following reasons: Research (sharing and obtaining) Public Information Embedding articles and other printed resources Special Organizations: Consumers within special organizations stand to benefit from using Scribd for the following reasons: Research (sharing and obtaining) Public Information Embedding articles and other printed resources Scribd is a social publishing company who offers the service of giving individuals and businesses a place to quickly and efficiently publish their written documents and whos product are those published works. Scribds technology is a unique platform for publishing and viewing written works called iPaper. The iPaper document reader transforms files like PDF, Word or

4. Describe the product and its platform

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PowerPoint into web documents that contain all the formatting and graphics of the original file. Another key feature of the iPaper document reader is the flexibility of the platform, which can be embedded as well as viewed in several environments.

5. What is your value proposition?

Scribd provides value to consumers, writers, and publishers, those in the consumer market who use social and/or ecommerce websites, upper education and business markets. For consumers, Scribd provides an easy-to-use social online and ecommerce website, with a wide everexpanding, diverse inventory of published works for sharing or purchase, and multiple platform use ability so that they may have more choices of national and international books and other printed materials and resources, free or at a lower cost, easier document sharing, and a more pleasurable digital reading experience. For writers, Scribd provides an environment to express opinions and an avenue to publish work through a successful social online website, an easy-to-use uploading and sharing format, and an innovative platform that provides increased reach, quicker final edit to delivery, lower production costs, and higher volume views so that they share their work more quickly and efficiently, and significantly increase their audience and/or potential customers. For publishers, Scribd provides higher volume views, increased reach, more price control, and easy to use distribution channel that provides national and international exposure to reviewers and potential customers, increased sales, and greater profit margins for products sold.

6. Business description: Is this a startup or an SBU? If SBU, name the parent company.

Scribd is a social publishing startup business that was founded in March 2007 by John Adler, Jared Friedman, and Tikhon Bernstam. They have received funding of $12.8MM since 3/07 and they have over 55 million unique visitors per month to their website.

7. Describe the technology and its importance:

The technology is the driving force behind Scribds business success. Scribd provides a technology that allows any person with an Internet connection to publish, share, and view documents. Internet capabilities allow for greater reach and a higher volume of potential customers. This benefits consumers and Scribds partners including publishers, authors, writers, and poets, etc. Consumers have a resource with a vast amount of offerings at their fingertips, while the sellers now have global reach without any lag time. Writers can now get their thought to print more efficiently. The digital process also allows for more flexibility within the market, through offering consumers the option to purchase

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only what they really want. The iPaper file reader is a disruptive technology in the file sharing industry. This new technology allows users to seamlessly view content from multiple formats without any delay or exporting difficulties. Similar to YouTube, it plays any file source upload in Flash. This allows users to take their books or journals with them wherever they go. The can read the first two chapters on the home computer and the next few off their phone on the train ride downtown. Embedded in the offering is a specific code that allows for easy sharing and searching. This gives Scribd an advantage over their competition and provides more value to their consumer segment. Software is available that is able to scan a users folder and upload documents directly to their Scribd account. Another feature involves the Greasemonkey script that searches the web for documents linked to Scribd, once found documents are embed automatically below the link. These are also very important to the process because they promote ease and increase channels.

8. Describe the competitors in the industry that you are targeting:

Scribd is entering the extremely competitive world of ecommerce. Some of the most difficult obstacles that businesses such as Scribd must deal with are that the consumer has immediate access to their direct competitors at their fingertips. Another difficulty is how to convert viewers and users to customers to make a substantial revenue stream from product sales, so that Scribd is not solely surviving on advertising sales and the monetization of papers. The competitors can be split up into three main categories; 1) Established retail websites a. Amazon.com b. Half.com c. Barnesandnoble.com 2) Similar start up companies a. Huddle.com b. ISUU.com c. Officeclip.com 3) Social network sites a. Myspace.com b. Facebook.com c. Twitter.com These three categories will help us understand similar markets, how these companies are making their revenue stream, and how they are using advertising to support their sites. To properly market Scribed, it is important to understand what makes them stand out from the rest, what makes their technology superior, and how the company can be profitable and grow.

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9. What is the significance of this project? Why should you do this? What other options did you consider?

Scribd is an exciting and evolving start-up online publisher, merely two plus years old, and already attracting more than 60 million readers per month. The vision for this young and growing company, according to Scribd.com, is to liberate the written word to turn everyone into a publisher and create the best possible reading experience on the web and mobile platforms. It may be time to expand that vision statement, as in March of this year they landed a contract with Simon & Schuster, one of the four largest English language publishers, to sell over 5,000 of their books online, and in May announced the beta launch of Scribd Store. Further, Scribds innovative platform, the iPaper document reader, is unique in its flexibility and extendibility, and the Scribd team has yet to take advantage of all the applications for this technology. Our team is excited about working on a project in the social media and digital online space, supporting publishers of all types and sizes, and providing such inclusive reading material and learning opportunities to masses of consumers. We were immediately enthused about this company, and in agreement that we wanted to choose Scribd for our project.

Bibliography:

10. Bibliography List 5 sources Annotate Use IEEE or APA style

1. Ante, S. (2009, June 22). An E-Book Upstart With


Unlikely Fans. BusinessWeek, Retrieved June 23, 2009, from Military & Government Collection database. Inside Track. (2008, September). PC Magazine, Retrieved June 23, 2009, from Business Source Premier database. Online Library Adds Books. (2009, March 19). Wall Street Journal(Eastern Edition), p. D.4. Retrieved June 23, 2009, from Wall Street Journal database. (Document ID: 1663658841). Scott, K. (2009, May 18). Scribbling for Scribd. Publishers Weekly, 256(20), 58-58. Retrieved June 23, 2009, from Business Source Premier database. (2009). June 23, 2009. from http://www.crunchbase.com/company/scribd (2009). June 23, 2009, from Scribd Web site: http://www.scribd.com/

2. 3.

4. 5. 6.

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Customer-Value Driver Assessment


Project Title
Course Name: Team Number: Team Members:

Scribd
Marketing Strategy & Management 2 Stacy Butchart Kinero Tan Jason Rippy Bianca Shedd Liam Flaherty Kurt McDonald Jaclyn Teidemann

Copyright 2008 All Rights Reserved For Classroom Use Only

Robert Harmon 2008

ANALYZING YOUR VALUE DRIVERS


STEP 1: SPECIFY MAJOR MARKET SEGMENTS Key Descriptors
A. Define the major market segments (potential target markets) served.
Consumer: The consumer segment is a very broad it will include everyone that download/reads printed material for the following (personal) reasons: Recreation Education Self-betterment

Business: The business market is inclusive of all businesses who stand to benefit from Scribd for the following reasons: Research (sharing and obtaining) Embedding articles and other printed resources into company website

Education: Upper education schools stand to benefit from using Scribd for the following reasons: Research (sharing and obtaining) Textbooks and other printed educational materials Public Information

Government: Consumers within the government segment stand to benefit from using Scribd for the following reasons: Research (sharing and obtaining) Public Information Embedding articles and other printed resources

Special Organizations: Consumers within special organizations stand to benefit from using Scribd for the following reasons: Research (sharing and obtaining) Public Information
Customer Value Drivers

Robert Harmon 2008

Embedding articles and other printed resources

B.1. Provide estimate of the TAM/SAM for each segment above. B.2. What criteria will you use to analyze the segments?
Consumer: HHs Using - Internet: 81,033,777 HHs Buying - Online Books 10,639,652 HHs Buying - Books 58,309,542

Business: Book Publishers- United States 41,608 Companies- World Wide 50,000,000

Education: Enrolled Public College Enrolled Private College

2,269,990 4,538,478

Government Agencies Federal: 447 State: 8,684 Local: 30

Special Organizations: Charitable Organizations 165,628

C. Describe the profile of the primary customer for each segment.

Customer Value Drivers

Robert Harmon 2008

Consumer: Downloader Meet Jill, a twenty-nine year old college graduate, who has been working for the same company for two years. Jill is not married and has no children. One of Jill's favorite hobbies is to read, however with her busy schedule she feels that she has no time to buy a new book. She spends an average of eight hours on the Internet. She is early to adopter new technologies. She was the first person in her office to have an iPhone and was blogging and Twittering before it hit mainstream. She makes around $65,000 a year.

Consumer: Uploader Meet Alex, A twentyseven year old self-proclaimed environmental reporter. Alex has started an online magazine. He has his own blog and Twitter. Alex uses Scribd to get his magazine electronic distributed. With Scribd Alex can set up a group so that his followers can keep up to date with his newest edition. Alex is also writing a book that that will accompany his magazine. Alex is hoping to get a book deal from a major book publisher.

Business: Downloader Meet Steve, he is a thirty-year-old marketing manager at U.S. based car manufacturing company. Steve has found that he can use Scribed to share big files with his out side marketing agency. Steve and his agency have set up a privet account so that the files that are uploaded by the agency will be secure.

Business: Uploader Meet Julie, she is a 46-year-old marketing manager for a major hotel. She has started use Scribd to post special magazine ads that have already ran. Scribd gives her the ability to share her ideas.

Government: Uploader Meet President Obama, the President has use Scribd to help win the 2008 presidential campaign. The President used Scribd as a resource for documents related to policy, along with official statements.

Education: Uploader Meet Professor Dees, the Professor has decided to take all his years and knowledge and write a textbook for all of his classes. Professor Dees has started to use Scribd to allow his students a place to download the many articles that he has already written.

Education: Downloader Meet Steve, he is a 23 year owls senior at a major university. Steve has many group projects to work on. Steve has found that with a site like Scribd he can set up a work group to allow the group to read articles that he has found on

Special Organizations: Uploader

Customer Value Drivers

Robert Harmon 2008

Meet Kendra she is the founder of a charitable organization She has started to use Scribd to post information about the causes that her organization is fight for.

Special Organizations: Downloader Meet Mark he is part of a non-profit group. Mark gets news from the non-profit using Scribd. People from the Non-profit post new paper articles and product reviews for their members to see.

Customer Value Drivers

Robert Harmon 2008

STEP 2: PRODUCT DEFINITION Key Attributes


FEATURES

Your Product
Service: Education, Business, and Entertainment Online social network, iPaper capabilities (multiplatform upload/download formats/viewers), files storage, embedding and indexing potential

Reference Product (Identify)


Service: (DocStoc) Education, Business, and Entertainment Online social network, iPaper capabilities (multiplatform upload/download formats/viewers), files storage, embedding potential

Product: Education, Business, and Entertainment Scribd store: Channel for publishers, authors, writers, poets, and others to sell their work around the world in multiple languages and formats

Product: (Kindle; 2, DX) Education, Business, and Entertainment Electronic paper display Small and large display screens Partnership with three textbook companies for education and three major newspaper companies

ADVANTAGES Service: Education - Indexing and embedding potential, iPaper ADI, original multi-format viewing Business - Indexing and embedding potential , iPaper ADI, original multi-format viewing Entertainment - Indexing and embedding potential, greater user volume and reach, iPaper ADI Service: Education - Greater focus on segment, easy vertical navigation, organization, search Business - Legal and business focus, promotional networking capabilities, easy vertical navigation, organization, search Entertainment Product: Education - Mobile unit, greater offerings Product: Education - iPaper ADI, pricing flexibility, multilanguage copy Business - iPaper ADI, pricing flexibility, multiBusiness - Mobile unit Entertainment - large and small screen display units available, book devise interface for users,

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language copy Entertainment - iPaper ADI, pricing flexibility, multi-language copy, Scribd Partner Program

iPhone application, library storage, read to me function, 300,000 books plus magazines, newspapers, and blogs available, full image zoom, bookmarks and annotations, no glare, adjustable text size, personal document viewer capabilities, wireless access to Wikipedia, easy in book, library, or Kindle store search functions, audio book capable for books, radio, magazines and newspapers, music, and podcasts. Available accessories from covers to stands.

BENEFITS

Your Product
Service: Education - Quick and free global access to journals and research articles, easy sharing and search amongst colleagues and students, original multi-format viewing, privacy and copyright protection, previews to purchase Business - Quick and free global access to business journals, internal and external file sharing, storage, privacy and copyright protection, previews to purchase Entertainment Publishers - Free, iPaper capabilities, file conversion, original file view, upload from multiplatforms, increased reach with 60MM plus online viewers (Scribd), network offers free impressions, promoted word of mouth Consumers - Free, iPaper capabilities, file conversion, original file view, upload/download ease to multi-platforms, unlimited file storage and sharing, organizational tools, personal public/private sharing decisions, access to user feedback, indexed documents for search and sharing, embedding capabilities linked access that increases reach, 80 percent revenue share, copyright management systems protecting unauthorized downloads, Scribd Partner

Reference Product
Service: (Docstoc) Education - Quick and free global access to journals and research articles, easy sharing and search amongst colleagues and students, multiformat viewing, previews to purchase Business - Quick and free global access to business journals, internal and external file sharing, storage, privacy and copyright protection, legal documents and professional opinions, networking and legal business marketing, Increased reach and buyer potential for published articles, previews to purchase Entertainment Consumers - Free, ADI File conversion, upload from multi-platforms, increased reach 4.8MM monthly online viewers (Venture Beats), network offers free impressions, promoted word of mouth, upload/download ease to multi-platforms, file storage and sharing, organizational tools, indexed documents for search and sharing

Product: (Kindle; 2, DX) Education - Newspaper and educational partnerships

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Program allows branding on publishers Scribd pages to enhance recognition (SSD), previews to purchase

Business - Newspaper partnerships Entertainment - Download ease to platforms, lower costs for written work, large and small screen display units available, book devise interface for users, iPhone application, library storage, read to me function, 300,000 books plus magazines, newspapers, and blogs available, full image zoom, bookmarks and annotations, no glare, adjustable text size, personal document viewer capabilities, wireless access to Wikipedia, easy in book, library, or Kindle store search functions, audio book capable for books, radio, magazines and newspapers, music, and podcasts. Available accessories from covers to stands.

Product: Education - Increased reach and buyer potential for published articles, price control flexibility with 80 percent revenue share (NYT) Business - Increased reach and buyer potential for published articles, price control flexibility with 80 percent revenue share (NYT) Entertainment Publishers - Price control, 60MM+ market segment, world wide distribution with low costs, Multi language copy, 80 percent revenue share (NYT), pricing model flexibility, instant another distribution point, immediate analytics, (Scribd) Consumers - 5,000 plus available published offerings, iPaper capabilities, file conversion, original file view, upload/download ease to multiplatforms, indexed documents for search

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STEP 3: CUSTOMER VALUE DRIVER IDENTIFICATION

a. Economic Value
Refer to Harmon and Laird (1997) and lecture slides. List and describe the key economic value drivers for the firm and its major products and services. Do the same for the reference product. Your Product
Service - Scribd (Online Social Publishing Website) Delivered initial cost: All documents published and shared on the portion sharing of the site can be searched, previewed, downloaded and embedded for free. The iPaper document reader allows the user to view or embed digital document in multiple environments, thus there are no associated hardware or other costs. All documents can be searched, previewed and downloaded or for free. Costs of ownership and disposal: There are no tangible costs to ownership and disposal. Price sensitivity: Because there is no monetary exchange, there is no perceived value relative to price for Scribd's service offering. User revenue: There are no opportunities for publisher's to earn revenue with documents published for sharing and not purchase. Environmental costs: There are no environmental costs directly associated with Scribd service of publishing and sharing documents. This is a customervalue driver relative to non-digital or printed documents and books, but not relative to other similar digital only delivery services. Note: Consumers of digital documents create environmental costs in terms of paper waste and disposal and toner waste and disposal,

Reference Product
Service - Docstoc (Online Social Publishing Website) Delivered initial cost: All documents can be searched, previewed, downloaded and embedded for free. Costs of ownership and disposal: There are no tangible costs to ownership and disposal. Price sensitivity: Because there is no monetary exchange, there is no perceived value relative to price. User revenue: Docstoc is now offering individual document publishers an opportunity to share 50% of the advertising revenue gained through the ad placements on their documents. Environmental costs: Environmental costs for DocStoc are identical to those of Scribd. Note: Regarding environmental costs of paper waste and disposal and toner waste and disposal, there could be a greater perceived cost based on a greater chance users may print documents more readily as digital readability is not as good as the iPaper document. Search costs: Searching is free and easy to use on the DocStoc site. Switching costs: There are no monetary costs relative to switching, however time and energy costs can

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however, the iPaper document sharing benefit to consumers is the ease and pleasure of reading on screen. Search costs: Searching is free and easy to use on the Scribd site. Switching costs: There are no monetary costs relative to switching, however time and energy costs can be perceived as extremely important dependent on the volume of published works stored with Scribd. If it is perceived that Scribd is a solid company, in for the long haul, risks of publishing and storing documents with this company are minimized. For a start-up, Scribd has a positive reputation and is the leader in social online publishing.

be perceived as extremely important dependent on the volume of published works stored. DocStoc is a smaller, less known company than Scribd, with less financing. Ultimately, this could create a lesser-perceived value for DocStoc.

Product Amazon Kindle and the e-Books and Published Works Available for the Kindle Delivered initial cost: The e-Books from Amazon Kindle require the purchase of their hardware product, the Kindle. Delivered initial costs include the price each of the three available models, currently priced at $359.00 and $489.00. Delivered cost could include shipping and handling, but Amazon is offering free shipping with regular delivery. An extended 2-year warranty is offered at $65.00. Cost of ownership: The cost of ownership includes not only the cost of the retail published works, but also the cost of the hardware, the Kindle reader. The current price for the available Kindle models run from $359.00 to $489.00. Shipping and handling is included in the price for standard delivery. Amazon offers a two-year extended warranty for $65.00. Cost of maintenance and repair: Amazon offers a one-year extended warranty included in purchase price or 2-year for an additional cost of $65.00. Cost of failure after the warranty expires is the current day purchase price and shipping and handling, if applicable.

Product Scribd e-Books and Published Works Available for Purchase through the Scribd Store Delivered initial cost: Delivered initial cost includes purchase price of e-Book or other published product, and cost of shipping and handling. There are no shipping and handling costs associated with delivery of iPaper documents. Cost of ownership: The only cost of ownership would be interest on any credit cards used to purchase. Cost of maintenance and repair: There are no costs. Price sensitivity: Scribd allows their publisher partners to set their own prices, and keeps 20% of the retail price, with 80% going to the publisher. Because of this pricing strategy Scribd prices range and are not discounted. However, because publishers receive such a high percentage of revenue they find Scribd a more attractive partner than competitors. For Scribd customers this could mean greater variety and quality of product. Further, there are other factors that influence price sensitivity with regard to Internet

Price sensitivity: Amazon has an aggressive pricing strategy, and does not allow publishers to set prices. The publisher determines the percentage of revenue they receive. Publishers may find the low price strategy as a reason to look to other online retailers. Environmental costs: Environmental costs use of natural resources and environmental effects in shipping, and in the creation and disposal of the Kindle reader.

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retailers, such as search cost and disappointment cost, and may lower price sensitivity, such as reputation, trust, familiarity and pleasure (Kim & Xu, 2007). Environmental costs: There are no environmental costs directly associated with Scribd products.

Kim, H.W., & Xu, Y. (2007). Drivers of price premium in e-markets. Communications of the ACD, Vol. 50, No.11, 91-95.

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CUSTOMER VALUE DRIVERS (CONTD) b. Performance Value


List and describe the performance value drivers for the firm and its major products and services. Do the same for the reference product. Your Product
Service - Scribd Best reliability Uses Amazon S3 for file serving/storage. S3 has 99.9% uptime resulting in extremely available content. Best feature set iPaper online reading interface for all of their documents. Outperforms competition 60 million visitors monthly Has deals with many large publishing companies. On-time delivery Documents are available for immediate reading via their iPaper reading interface. Best technical solution iPaper reading interface translates documents such as PDF, PowerPoint, and DOC files pixel for pixel to provide a seamless online viewing experience. Faster installation iPaper reading interface is built in Flash, so as long as a flash-enabled browser is used, installation time is non-existent. Ease of training the iPaper interface is very well designed and makes it very apparent that navigation is done with arrows. Training is supplemented by their 'Getting Started' link provided on the website. Innovative solution iPaper reading interface is one of the first of its kind that allows for versatile document support

Reference Product
Service - Docstoc Best reliability Uses Amazon S3 for file serving/storage. S3 has 99.9% uptime resulting in extremely available content. Best feature set DocStoc reader for all of their documents. Outperforms competition 4+ million visitors monthly. On-time delivery Documents are available for immediate reading via their DocStoc reader. Best technical solution DocStoc's reader translates documents such as PDF, PowerPointt, DOC files pixel for pixel to provide a seamless online viewing experience. Faster installation DocStoc's reader is built in Flash, so as long as a flash-enabled browser is used, installation time is non-existent. Ease of training the DocStoc reader interface is very well designed and makes it very apparent that navigation is done with arrows. Training is supplemented by their FAQ link provided on the website. Innovative solution Docstoc's reader offers inline viewing of supported document types and accurately displays the information. Also, downloading

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as well as accurate display of all information. Integrate systems iPaper is embedded within Scribd's website (as well as any other site that chooses to embed the iPaper reader within their pages). All of Scribd's content is available inline. Complies with standards iPaper offers support for 17+ different file formats and converts them all flawlessly for reading in their iPaper reader. (scribd.com) Best customer service/support Scribd has many pages on their website that offer answers for any service/support questions. Also, Scribd has a dedicated e-mail address for support. Best reliability Uses Amazon S3 for file serving/storage. S3 has 99.9% uptime resulting in extremely available content.

of the documents is supported. Integrate systems DocStoc's reader is embedded within DocStoc's website (as well as any other site that chooses to embed the DocStoc reader within their pages). All of DocStoc's content is available inline. Complies with standards DocStoc offers support for 9 of the most common file types for upload to their site and viewing in their DocStoc reader. Best customer service/support DocStoc has a FAQ page as well as a dedicated e-mail address for support inquiries.

Best reliability Uses Amazon S3 for file serving/storage. S3 has 99.9% uptime resulting in extremely available content.

Product - electronic documents from Scribd Product - Kindle Best reliability Uses Amazon S3 for file serving/storage. S3 has 99.9% uptime resulting in extremely available content. Best feature set iPaper online reading interface for all of their documents. Outperforms competition 60 million visitors monthly Has deals with many large publishing companies. On-time delivery Documents are available after purchase for immediate download or immediate viewing on Scribd. Faster installation Electronic matter bought through the store can be either read on Scribd (no installation), as a PDF (no installation, as most systems support PDF), or as a protected PDF (which requires installation of a specific Adobe PDF reader). Best quality Kindle is just thicker than a 1/3rd of an inch and is 10.2 ounces. Best feature set Kindle has 'Over 300,000 books plus U.S. and international newspapers, magazines, and blogs available' (amazon.com) Outperforms Competition Kindle has the largest e-book selection compared to any of its competitors. Easier Installation Any of the books are delivered electronically in under 60 seconds via the Kindle's 3G wireless connection. On-time delivery Any of the books are delivered electronically in under 60 seconds via the Kindle's 3G wireless connection.

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Ease of training Scribd has a 'Sellers Guide', an extensive FAQ page, and Sellers Tutorial Videos all to insure an informed selling experience. Innovative solution Scribd offers an 80/20 revenue sharing mechanism that hopes to, and has already, get top talent to upload their works for sale. This helps to establish that Scribd's store offerings are of superior quality. Scribd also offers three levels of protection for their store offering (view on Scribd, download PDF, download PDF to be read in protected, copyproof reader) Integrate systems iPaper is embedded within Scribd's website (as well as any other site that chooses to embed the iPaper reader within their pages). All of Scribd's content is available inline. Best customer service/support Scribd has many pages on their website that offer answers for any service/support questions. Also, Scribd has a dedicated e-mail address for support. In addition, Scribd has a 'Sellers Guide, which helps the potential sellers to better understand the process.

Ease of training Each Kindle has a quick-start guide included and also gives a tutorial upon initial startup of the device. Best Technical Solution Does not require a computer to operate which eliminates concern about cross-OS compatibility Integrate systems Setup and purchasing are all done from the Kindle itself. No outside systems are needed for use. Innovative solution E-ink display results in long battery life and increased on-screen visibility. Has text-tospeech feature so that the Kindle can ready any of its items to you (unless disabled by the publisher) Best customer service Amazon has an extensive online knowledge base that is tailored exclusively to the different Kindle models.

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CUSTOMER VALUE DRIVERS (CONTD) c. Supplier Value


List and describe the perceptions your customers have about your company that may affect their beliefs about the value delivered by your company and its major products and services. Do the same for the reference company and its offerings.

Your Company
Scribd is commonly being coined as a YouTube for eBooks, which has both positive and negative feedback from the consumer. Users are enjoying an ease of Scribd and the shared value t of sharing their work with the world. Scribd has become a premier innovative problem solver for many people due its ability to convert any file format and embedding functionality. Consumers also like the ease of having one site for both document sharing and eBook purchasing. Scribd has found a way to meet specific needs of the consumer by creating a realistic reading experience for eBooks. The negative side to being compared to YouTube is the consumers concern for copyright violations. Some other concerns about Scribd include the long-term commitment to the market; consumers are concerned that the business structure may not be strong enough. Consumers are also concerned that they may be making a mistake by investing their time and work into a company with extensively competitive industry. The key to this industry is keeping a competitive advantage by continuing innovating new technology to meet the consumers need.

Reference Company
Docstoc provides similar services as Scribd, it is considered to be a more professional document-sharing site when compared to Scribd. Consumers enjoy the convenience of Docstocs one click embedding. Consumers also think the company has a strong business model due to its backing by Amazon. Much like Scribd consumers are concerned about copyright infringement, consumers are scared to put their work out there. Many consumer blogs show that consumers see Scribd is a stronger site and lead the industry now, but being in the technology industry that leads could diminish at any point in time with new advancements.

Kindle provides a product for consumers who are looking for an easy way to read electronic books. Kindle has produced several versions of a device that stores and views eBooks. Consumers who own the device feel that it is getting closer to the actual experience of reading a paper book. Consumers are happy with the functionality of the product, such as its antiglare screen and font capabilities. Consumer concerns include the upfront cost of the device, and content pricing. There are other concerns about the longevity of the company, and their ability to keep the books on file and return to them at a later time. Some other downfalls the consumers are seeing to the device is that it is limited to black and white. The black and white text is functional for books, but is disappointing for periodicals and

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internet content.

CUSTOMER VALUE DRIVERS CONTD) d. Buyers Motivations & Goals


Identify and list your buyers primary motivations and goals concerning the decision to purchase products and services of the type you provide. Do the same for the buyers of your reference competitors products. Your Buyers
Motivation to Purchase Readers: 1. Scribd.com offers a lower price for books compared to competitors 2. Interactive experience 3. Environmentally friendly if book is only read digitally 4. Convenient and less time consuming to purchase 5. Exposed to all writings and not just those that are published by a large publishing firm Motivation to Purchase Authors/Publishers: 1. Free service 2. Ideal platform to create relationship with other readers (Kuo, 2002) 3. Given the ability to publish their writings themselves 4. Large profit received from sales 5. Freedom to set price 6. User friendly platforms 7. Potential increase readership because of the 50 million viewers/month 8. Less time needed to publish writings 9. Boost print and e-book sales (Snyder, 2009) 10. Opportunity to share their thoughts freely Goals Concerning Purchase Readers: 1. Spend the lowest amount of money for a book 2. Create an exciting and different reading experience 3. Become more aware of writings besides mainstream Goals Concerning Purchase

Reference Competitors Buyers


AMAZON KINDLE Motivation to Purchase- Readers: 1. Save time purchasing a book 2. Interactive experience 3. Environmentally friendly 4. Reduce amount of weight and space compared to a printed book 5. Portable reading 6. Track notes throughout readings Motivation to Purchase Authors/Publishers: 1. Makes the book more interactive for readers 2. Drive e-book sales (Snyder, 2009) 3. Large readership for Amazon Kindle 4. Ideal platform to create relationship with readers (Kuo, 2002) Goals Concerning Purchase Readers: 1. Become more innovative 2. Create an interactive and exciting experience Goals Concerning Purchase Authors/Publishers: Drive print and e-book sales (Snyder, 2009) 1. Gain a larger market share and awareness 2. Stay competitive in the industry by offering both a print and digital platform to read books DOCSTOC Motivation to Purchase Buyers: 1. Free to read any books 2. Ability to read professional documents on a digital platform 3. Environmentally friendly if book is only

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Authors/publishers: 1. Earn the highest profit on books 2. Drive print sales and e-book sales (Snyder, 2009) 3. Publish their work 4. Gain a larger market share and awareness 5. Eventually sell books in retail outlets

read digitally 4. Interactive experience 5. Exposed to all writings and not just those that are published by a large publishing firm 6. Increase knowledge in business, technology, and legal 7. Convenient and less time consuming to purchase Motivation to Purchase Authors/Publishers: 1. Free service 2. Ideal platform to create relationship with other readers (Kuo, 2002) 3. Given the ability to publish their writings themselves 4. User friendly platforms 5. Potential increase in readership 6. Convenient to share files with other coworkers or business partners 7. Opportunity to share thoughts freely Goals Concerning Purchase Readers: 1. Save money 2. Create an exciting and interactive reading experience 3. Increase knowledge 4. Become more aware of writings besides mainstream Goals Concerning Purchase Authors/Publishers: 1. Drive print sales (Snyder, 2009) 2. Publish their work 3. Gain larger market share and awareness 4. Decrease time to publish work Kuo, Y. (2004). Integrating Kanos Model into Web-Community Service Quality. Total Quality Management, 15, 925-939. Snyder, C. (2009). Major Publishers Partner with Scribd for Viral E-Book Marketing. Retrieved July 2, 2009, from http://www.wired.com/epicenter/2009/03/publi shers-part/

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CUSTOMER VALUE DRIVERS CONTD) e. The Buying Situation


Identify and list the elements of the buying situation that impact customers perceptions of the value provided by your firm and its major products and services and their willingness and ability to buy. Do the same for the reference product. Your Product
Simplicity, ease, and convenience in buying situations are distinct characteristics that set Scribd apart from competitors. Getting to the actual site and navigation through Scribd.com is flawless in transitions from search to final purchasing transactions. From start to finish consumers are guided through without confusion of where they are in the buying process. A sample portion of the actual piece you are purchasing is presented before final transaction to ensure the end product is exactly what the buyer intended to get. Cost is desirable compared to competitors. Willingness to buy is heightened according to Best, in Marketbased Management. Best explains "If the decision to buy a product or service can be made without the agreement or input of several people, market growth will develop more rapidly. An individual decision maker can act quickly, without first needing the approval of others. Scribd price points in correlation with ease of purchase allow for less need to confront others about purchase decision compared to the Kindle product. Scribd account sign up and purchase are all done with simple steps on the same page, instead of a two-step process. This ensures for faster purchasing

Reference Product
Amazon KINDEL- Amazon presents Kindle at the forefront of their website. A 2-minute video that clearly demonstrates the capabilities of the product leads into ensuring quality in purchase. Suggestive selling techniques along with customer testimonial are present to aid purchasing a product that cost over $300. Characteristics such as long run savings, practicality, quality and ease are also used leading up to purchase. Amazon's checkout feature prompts consumers to purchase add on accessories as you move towards final purchase. Add to cart feature provides simplicity in checkout and wish list options are available enabling reminders and future purchases. Ability to choose from the most available options in books, journals, magazines, etc. ensures consumers are getting the most defined end product according customer wants and needs. Docstoc- Clean and defined viewing. Docstoc is focused in on education and business and clearly outlines search options to get to where consumers need to be. Suggestive alternative readings available once user has selected a reading. Docstoc documents are previewed, downloaded and embedded for

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capability. Cleanliness and look of each page allows for an uncluttered buying experience. This site sells the written word and nothing else this is a key element in the simplicity factor. Suggestive selling techniques target in on the possible needs and wants of the consumer. In the entertainment segment this is especially helpful to consumers that are simply browsing for something to read before they board a plane. Fast, easy, and convenient are characteristics that breathe within the Scribd consumers.

free. Willingness in use of the service becomes extremely high considering there is no risk for the reward.

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Marketing Strategy & Management Summer 2009

SCRIBD MOA Presented by: Stacy Butchart Liam Flaherty Jason Rippy Bianca Shedd Kinero Tan Jaclyn Tiedemann

EXECUTIVE SUMMARY SCRIBD MOA

Market Opportunity
Scribd is an online social publishing company. This is a relatively new industry. There are minor players in the market, such as Docstoc, and major players such as Amazon. Additionally, this arena is particularly attractive to start-ups. Still, Scribd has established itself as a true player and continues to thrive, in part, at least, by remaining true to a vision that makes them a remarkable service provider. To date, Scribd has been able to continuously create awareness, gaining new potential customers (visitors to their site), and establishing beneficial partnerships at a rapid pace. There are numerous attractive market segments on which Scribd could focus their marketing efforts. The big competitors can cover the gambit, but creating a culture and a niche that gives them valuable points of parity with their chosen market. Scribd has, thus far, existed off of Google Adsense revenue and the funding of investors. With their innovative technology and partnerships with both writers and publishers, Scribd has the tools to successfully penetrate this market, and continue to have a competitive advantage. Scribds vision is to liberate the written word, allowing all writers the opportunity to publish and readers a wealth of high quality, digital books and publications. They offer a service that is cocreated with their customers and partners, and a positive and beneficial experience for their entire audience. By carving out a niche as the company that cares Scribd will have a competitive advantage that is unique. It is the experience that sells the product. Culture and community are significant to their brand position. The big idea for Scribd, is to capitalize on all of this. Creating the writers dream, and the readers paradise. Upon reviewing our research and data using the market sizing and forecasting model provided in class, (Harmon, 2009) we have come to the conclusion that the Internet-savvy College Student segment represents the highest market potential for Scribd with $1.3 billion in potential revenue.

Competitive Advantage
Scribd maintains a competitive advantage in three major areas: price, technology, and flexibility for suppliers. Scribd has been able to maintain low price points for books because they offer authors 80 percent of revenues in return for them using their website to publish books. Because Scribd offers such a high return on profits, authors are given an incentive to price low because they still earn more on profits than any other retailer does. The second competitive advantage Scribd maintains is their technology used to upload and download books. iPaper has allowed Scribd to stand out among competitors in terms of speed for downloading books and user friendliness. Current suppliers of e-books have yet to master a downloading technology that creates convenience for both the author and the reader. The last competitive advantage Scribd maintains is their ability to open their service to all authors who want to publish their work regardless of whether or not they have formally gone through a professional publishing firm. This gives Scribd a huge advantage because the suppliers are limitless in terms of the type of work that can be uploaded. People are attracted to this website because they have the largest variety of reading material available with just a click of a button.

Competitive Assessment

Scribds two main competitors are Amazon Kindle and Docstoc.com. Amazon stands to be a strong competitor due to their handheld reading device (Kindle), which makes the reading experience more interactive. They also have an already established readership, which creates a challenge for Scribd to convert customers. Docstoc is a strong competitor because they offer a very similar service that allows all authors to upload books and all readers to purchase books online. Analyzing Scribds strength and weaknesses based on competitive factors, Scribd needs to invest more energy in innovative technology. Currently Scribd is following behind Amazon Kindle but is ahead of Docstoc. As Docstoc improves their technology to iPapers capabilities, it is crucial Scribd be one step ahead. Scribd needs to co-create value with customers that can surpass the value created through Amazon Kindle. Scribd needs to enhance the reading experience in order to become the number one leader in e-books.

Net Assessment
After reviewing and analyzing Scribds competitiveness within their market, we feel as though Scribd has a viable reason to move forward. Scribd is the provider of the most advanced social documentation distribution platform, still, this is an important time for Scribd to gain as much market share and awareness as possible. Their core competency will at some point become an industry-shared technology, so Scribd must create a large consumer base while focusing on adaptive and innovative ways to increase their current value offerings. As their consumer volume grows Scribd must follow their vision to promote their culture and enlarge create a loyal following. Their vision is clearly key to their big idea. The big idea was formed from their overall vision and represents the culture they serve. Scribd needs to stay true to this vision in order for them to benefit from a following of consumers that believe Scribd to be the best channel representing their desires and needs.

BUSINESS OVERVIEW

The Business Opportunity Scribds Big Idea


From the beginning, Scribd founders had a vision. With their company and its website, they wanted to liberate the written word. This vision honors the authors of written works, and benefits the reader by attracting works of all kinds. They want to make it simple to publish and make your work visible and available to the masses. With the addition of the Scribd store, Scribd has created a revenue stream that takes them from being a social online publishing site, to a potentially very profitable enterprise. It will be a challenge for them to compete strictly in terms of e-commerce, as they are challenged by the behemoths of the industry. Scribds biggest business opportunity then is to commit to the vision, staying advocates of writers and authors, continuing to offer the most innovative and popular platform so that readers can truly enjoy the reading experience. Their niche, if you will, is in the quality service they offer, and the pairing of what writers need and want, and what readers desire. Scribds Big Idea A writers dream, a readers paradise.

Company Overview
Scribd was founded in 2007, and is currently the worlds largest social network publishing site. The company offers a variety of services that include; free storage place for personal or professional documents, quick and efficient publishing, and a place for publisher to sell to consumers. Scribds innovative technology creates a unique platform for businesses, educators, students, and both leisure and professional writers to store and view written documents. Scribd has created a superior viewing and publishing experience through their technology called iPaper. iPaper has made it convenient for users to transform their current PDF, Word, PowerPoint files, or various other formats, into the universal iPaper format, for easy viewing and storing. Scribds primary business functions are to provide services on a website that give consumers, publisher and writers with a place to connect and share. Consumers are provided with an easy-to-use one stop website and social online network. Scribds inventory currently consists of millions of article with around 60 million plus readers. Scribd provides the customers with easy document sharing, improved imbedding functionalities and an incomparable digital reading experience Scribd provides writers with a unique atmosphere and opportunity to express their opinions and publish their new ideas and past work. Scribd technology provides enhanced editing, an easy-touse platform, and industry leading formatting and viewing; which creates a easy low cost avenue for writers to publish and share their written works. The strategic partnership that Scribd has formed and continues to form with many publishers also makes it profitable for writers to reach their existing customer base and, at the same time, the potential to grow their customer. Authors and publishers are being provided a profitable revenue source from Scribd, derived from increased consumer reach, better price control, lowered cost of distribution, and higher volume of general traffic who may convert to customers upon previewing that writers work. The gained exposure, in turn, helps the publisher to reach more readers and find new writers. The social publishing network market has vast competition, with several startup companies, and many venture backed competitors. The introduction of EBooks created a new playing field for startup companies, and existing retail websites. While key competitors concentrated on profitability from sales and advertising, Scribd has primarily concentrated on innovating new technologies and building strong associations with publishers. The launch of the iPaper positively positioned Scribd in the market. Scribds strategic partnership with publishing companies gives them competitive advantage, due to the constant evolution of new technology. Scribds strengths include their ability to meet specific needs of the customers through their iPaper technology, which include convenient formatting, embedding functionalities, and advanced viewing experience. Another strength of the company is lower costs for the writer and reader. It is free for the consumer to store, and view purchased material, and free to upload and publish. Unlike Amazon, where you have to purchase a device to view their digital publications, there are no costs of entry. Weaknesses include the constant consumer concern of copyright issues, along with consumer concerns about the longevity of the company ands its commitment to the market. Scribds vision is to liberate the written word. Their goal is to give everyone a chance to publish their work, and to create a superior viewing experience for everyone. This vision has created the largest social publishing website which is constantly gaining a larger audience.

Products and Services


Product Description Scribd is an online document-sharing website enabling customers to upload and download documents in a variety of formats using its newly developed iPaper technology. iPaper is built with Adobe Flash and fully equipped to work with Windows, MacOS, and Linux, converting millions of PDFs, PostScript files, Excel spreadsheets, and PowerPoint presentations into the

best viewing experience on the web. Scribd users can take advantage of the embedding capabilities enabling bloggers and websites to instantly embed iPaper documents into their work. Scribd currently has adopted an online store that features Simon and Schuster, the 4th largest publishing company in the United States, at the forefront of the Scribd store. Yet, the beauty of Scribds service is that anyone can upload and share with the world. With over 60 million unique hits every month, 5 million iPaper embeds, and millions of documents being shared, Scribd attracts users ranging from college students and publishing companies to the World Bank, and including President Barack Obama.

Feature iPaper Multi-Platform Uploads/Downloads Easy to Use Website

Advantage Ability to upload and download, from several different platforms Ability for easy search, navigation, and purchasing within the site.

Benefit Converts documents into iPaper format allowing users to upload and download without incurring switching costs. Clean, convenient, and simple website allows flawless navigation and search. Quick and easy purchasing experience. Also displays sample of writing before actual purchase. Ability to display document regardless of if you are using Linux, Windows, or MacOS 5 million embeds currently exist allowing users to view embeds on any documents without the need for links and ability to view the embeds exactly how they appear on Scribd

Reading Experience Embedding Capabilities

Scribd uses iPaper built with Adobe flash. Allows users to embed Scribd documents within users own personal work or documents.

Figure 2-1 Feature Advantage Benefit Requirements for Readers/Consumers The Scribd search and suggest feature is clear and concise guiding users to the exact written documents they need. With broad categories that are split into Books, Business, and Academics it is easy to split up users looking for business or entertainment. The ease and convenience of the one step sign up and payment ensures users are not wasting time to get the documents they need. All of these elements add up, creating an easy-to-use website. A display of part of the actual document is shown before purchase to ensure confidence that readers are getting exactly what they signed up for. Embedding capabilities allows users to easily use Scribd documents without creating a link to the site, and iPaper embeds are viewed without leaving the owners website or blog. Scribd users upload and download on the platform of their choice, creating a low cost environment for publishers and readers alike to share the written word.
Feature 80%/20% Revenue Split Multi-Platform Distribution Flexible Pricing & Preview Built in Viral Marketing Advantage Gives publishers 80% of revenue of product sold with remaining 20% going to Scribd. Published work available on e-reader devices as well as most future mobile devices. Real-time changes to pricing, preview and download options. All sales items are capable of being shared with Scribds 60 million monthly visitors. Benefit Allows publisher to receive greater profits in comparison publishing with Scribd competitors. Allows for efficient distribution to potential consumers of publishers. Allows publishers to quickly make changes to published pieces. Publishers are instantly increasing the # potential buyers when publishing with Scribd.

Figure 2 Feature Advantage Benefit Requirements for Writers and Publishers Scribd offers a service that is a publishers dream with pricing structure that is all about the publisher first. With a generous 80/20 split and the capability to set your own prices lures many publishers in. They are empowered with the ability to make changes to their documents around the clock. Publishers are also able to take advantage of the millions of hits that Scribd receives every month in increasing potential sales. Value Proposition

Scribd is an innovative global resource where writers and publishers thrive, and readers share, learn and enjoy.

6 5 4 3 2 1 0 Covenience DigitalExperience Price EaseofPurchase VarietyInLiterature VarietyInLiterature DownloadSpeed

Value Proposition as a Download Service While Amazon displays over 300,000 books, the range in offering doesnt begin to compare to variety of literature that Scribd users have at their fingertips. With work ranging from resumes and textbooks, all the way to newspapers and even cooking recipes the possibilities are endless.

Scribd Amazon

The comparison to Amazon in dedication to the written word category is exposed in convenience and ease of purchase. On the way to check out while Amazon clutters the margins with credit card offers, advertising banners, and wish lists, Scribd is there with a clean and easy checkout and a sample section of the document to make sure your purchase needs and desires are being met. The majority of the shared pieces on Scribd are free and you also dont need to buy a device that (current cost $299) to view it. Publishers are able to make real-time changes to price points that will ensure costs will stay competitive but never overpriced.

6 5 4 3 2 1 0 Covenience DigitalExperience Price EaseofPurchase DownloadSpeed

Value Proposition as a Download Service Profit structure and pricing freedom in conjunction with dedication to the written word, are key factors in an overall comparison of Scribds offerings to publishers and writers, relative to Amazons offerings. Amazons main goal is to make a profit from overall book sales and ultimately create the most effective strategy to increase revenue for the company. Writers and

Scribd Amazon

publishers view Scribd as an affordable place to publish that maximizes publishers income. This is all achieved at Scribd while still maintaining the integrity of the writers by having a focused dedication in sharing the written word.

Brand Identity The founders of Scribd have a vision. They want to liberate the written word, and to turn everyone into a publisher and create the best possible reading experience on the web and mobile platforms. Their vision is an important part of their brand identity. They have provided an easy and efficient way for any writer to publish, and a flexible platform that makes reading on a screen a much more pleasurable experience than it had been before iPaper technology. At this point and time theyre young brand equity is positive among website visitors, of which there are millions per day, and some of the major press. The name Scribd comes from the word Scribbled. Its fun and catchy, memorable and feels a bit nonsensical, much like the names Yahoo and Google.

The identity also includes Scribds logo and website, and both are well designed, clean, and userfriendly. The logo mark depicts a simple icon of a document floating on a multi-colored circular background, which feels creative with its blend of bright colors, and soft fading edges.

The website is important as it hub of Scribds service. Its bright, clean and is easy to navigate. Search functions are easy-to-find and easy-to-use and both readers and publishers can find what they want right on the homepage. It has a professional, yet friendly look. Scribd has a brand identity that already makes them look like a significant player and appeals to todays online consumers. Strengths and Weaknesses

Scribd provides a service that is growing in correlation with it potential market size. As the use of computers and Internet access continue to grow, the demand for a service that is capable of efficiently delivering real-time documents and books is being more and more widely accepted. With Scribds iPaper technology, embedding capabilities, and a captivated audience participating in uploading and downloading, and all the buzz surrounding Scribd, 60 million viewers a day have already been fascinated enough to at least take a peek at Scribd.com. With a pricing structure that has a leg up on their competitors, Scribd owns a vision that is in line with what publishers are looking for. They also have created an atmosphere where writers can feel as if they have ownership to the way their work is displayed allowing for real time changes in pricing and formatting. Yet, currently Scribd has a minimal share of the market with competitive monsters including Amazon, Docstoc, and bookstores with online retail sites, such as Barnes and Nobles. Besides the recent launch of the Scribd bookstore, Google Adsense placed advertising in the only steady stream of revenue to sustain growth. Technology barriers including copyright issues, staying ahead of rapidly occurring platform innovations, and highly competitive product innovation from competitors with big time funding.

Conclusions
With a combined $12.8 million in private funding, Scribd already has a hold of the reigns with all the necessary resources at hand. They now need to focus in on harnessing this captivated audience, and continuing to build on the values that they have already created in their service offerings. iPaper technology is what allowed them the current success they hold. Yet, product innovation and technological breakthroughs are a necessity to enable Scribd to continue to thrive. Scribd must find ways to generate revenue while still maintaining integrity to the written word and strong relationships with current and future consumers, writers and publishers. While pricing structure and strong partnerships are currently a strength, as the market matures Scribd may have to reevaluate and readjust to create the most effective business plan to ensure positive growth. While the number of products continue to grow along with innovative technological offerings, they must maintain the uncluttered, focused, and easy-to-use website that set them apart from their competitors to begin with. Creating a safe environment that is easily accessible for readers and writers alike to share with one another is what feeds in Scribds big idea.

TECHNOLOGY ASSESSMENT Product Technology


To understand where Scribds marketing plan needs to go, it is important to understand the differentiating technology that Scribd has to offer. iPaper is Scribds revolutionary flash-based document reader that allows all of the documents uploaded to Scribd, to be read on any online web browser. This section provides an introduction to iPaper and to Scribd.com, as the site that created the iPaper technology. Also, this section covers competing technologies, the lifecycle of an e-book, technology partners, cost factors and drivers, and disruptive technologies. Scribd is an electronic document sharing site and electronic document marketplace. Scribds is primarily a website where documents of almost any digital format can be uploaded and shared across the Internet, anywhere or anytime. The uploaded documents are then accessed via Scribds iPaper online, flash-based document reader. iPaper has support for over 18 electronic document formats, including PDF, DOC, and PPT. iPaper is functional on any flash-enabled web browser and therefore is supported in every operating system that has a GUI. iPaper allows for

immediate viewing and sharing of documents as well as the option for making documents available for download, or download for a fee. iPaper is also an embeddable technology so that any blog publisher or website owner has the option to embed their documents directly into their websites. To ensure that the documents that are uploaded to Scribd.com retain integrity and have adequate redundancy, Scribd uses Amazon Simple Storage Service S3. (Bentley, 2008) Amazon S3 is a cloud-based storage system that has advanced, customizable security features, and its buy-asyou-go pricing policy allows for infinite scalability. (Farnsworth, 2009) These features create a secure, robust storage system for all of Scribds publishers intellectual property.

Figure 3-1 Example of Scribd.coms file download/upload flow

Scribd has a vision that hopes to liberate the written word to turn everyone into a publisher and create the best possible reading experience on the web and mobile platforms. (Scribd About Us, n.d.) Existing as an online flash-based document reader, iPaper will help to achieve this vision. Adobe, inventors of the Flash Player, note that the Flash player is installed on 99.0% of Internet-enabled desktops in mature markets (US, Canada, UK, France, Germany, Japan). (Adobe, n.d.) This fact is integral for Scribds success as Flash is required for online document viewing and is beneficial to Scribd users because there isnt any proprietary software to install in order to utilize Scribds library. Competing Technologies In order for Scribd to impress their offerings into the mainstream; there are several obstacles they must first overcome. Various technologies offer an obstacle for Scribd to overcome in an effort to impress their offerings onto the mainstream. The competitors are not only competing in product downloads, but also in external document reading devices. The electronic document business is a matter of providing distribution for material and Scribds competitors offer solutions similar to Scribd and some solutions that Scribd cant offer currently. This constant battle for technology advancements makes it hard for the consumer to differentiate their advantage over competitors, causing the consumer to lack brand loyalty. Amazon Kindle The Amazon Kindle is an e-book reader that uses the revolutionary e-ink display to emulate the book reading experience in a handheld device. The Kindle can read e-books purchased from Amazon in the proprietary Kindle document format. Amazon currently has over 300,000 books that are available for immediate download on the Kindle. As well as the Kindle format, the Kindle supports viewing of the world newspapers in addition to displaying content from over 5,000 blogs. (Amazon Kindle, n.d.) The Kindle utilizes Sprints EVDO cellular network to retrieve any content for the Kindle. This was established in an effort to create an actual standalone device that wouldnt need a Wifi connection or a personal computer. (Frucci, 2007) There is no additional charge for the EVDO connection, it is complimentary for the life of the device. The Sprint EVDO network has a maximum speed of

3.1mbps download and 1.8mbps, this facilitates downloading of Kindle books in 60 seconds or less. (Frucci, 2007)

Figure 3-2 Side-by-side comparison of Scribds and Amazons user download flow

Docstoc Docstoc is an electronic document sharing website. They are similar to Scribd in that they allow anyone to publish electronic documents; they offer support for 10 document formats (Docstoc, n.d.) compared to Scribds 18+ compatible formats. Also, as with Scribd, Docstoc has an inline flash-based document reader that all of their content can be viewed through. Due to the reader being flash-based, Docstoc is compatible with any operating system with a GUI that has an internet-connected web browser. The e-book Life Cycle Electronic books have been a developing technology for almost 40 years. It all started with Project Gutenberg in 1971, which was developed at the University of Illinois. (Guardian.co.uk, 2002) It was essentially a database of public domain works available for public download. In 1999, Simon and Schuster became the first publisher to simultaneously publish books in both electronic and print formats. (Guardian.co.uk, 2002)

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Figure 3-3 The e-book Life Cycle

As shown in Figure 3-3, the e-book lifestyle is in the growth stage. Despite the fact that eBooks have been available in some form since 1971, they havent been available in a convenient format until recently. Scribd was started in March 2007 and Amazon released the first generation Kindle in November 2007. Both of these technologies provide a way for consumers to read and purchase e-books and represent a strong growth market for e-books. Technology Partners Scribd started in 2007 with no major publishing partners. As of 2009 they have deals with many major publishing houses such as Random House, Simon & Schuster, Workman Publishing Co., Berrett-Koehler, Thomas Nelson and Manning Publications. (Guardian.co.uk, 2002) Scribd is utilizing these relationships to offer rich content to its users and its also used to prevent competitors from offering similar materials. According to a June 2009 Business Week article, Scribd is in talks with other big publishers and is working to make its content available on the Kindle and Apple's iPhone. (Ante, 2009) Both of these ideas would represent major opportunities for Scribd. There are an estimated 20 million iPhones currently in use and an estimated 1.4 million Kindles will be in use by the end of 2009 (Arrington, 2009), this represents a huge technological opportunity for Scribd. If Scribd could use both of these devices to distribute their material, they would be looking at 21.4 million mobile devices that could access their library of electronic documents.

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Fig. 3-4 Scribd Comparative Assessment and FAB Analysis Evaluate Potential Disruptive Technologies Scribd announced their Scribd store feature on May 18, 2009. (Claburn, 2009) Essentially, Scribd has created a store where publishers can publish any of their own works, set their own prices, and ultimately keep the majority of the profit, 80% to be exact. Upon launching this feature, Scribd established an eBook marketplace unlike anything that had been launched prior. Despite larger competitors having large budgets, Scribd released a feature that is truly disruptive. By providing larger shares of profit and letting the publishers set their own prices, Scribd created an extremely desirable place for publishers to upload and sell their literary wares. Along with providing a desirable marketplace, Scribd also provides a tremendous analytics system for publishers to track their sales. For example, when someone adds your document to their list of "favorites", Scribd warns you via a daily e-mail digest. In addition, Scribd sends an e-mail to the publisher when any of their documents are sold. (Savikas, 2009) These features compliment the Scribd store and together prove to be a very disruptive technology. Its not as if features similar to the store and the analytics mentioned above haven't existed prior, its that Scribd has made all of them work together to create an extremely cohesive technology set. Conclusions Scribd is presenting an extremely interesting platform for eBooks to be read and sold upon. With 60 million unique visitiors per month (Scribd, About Us, n.d.) and the introduction of the Scribd Store in 2009, Scribd is helping to revolutionize the e-book industry. If Scribd can continue their growth rate and continue to sign new publishers to provide best quality and some exclusive content, they could potentially be a major player in the electronic publishing field. Scribd offers a generous portion of the revenue generated (80% to the publisher, 20% to Scribd) and any of their

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content can be read on any web browser that is Adobe Flash-enabled. This is an alluring thought to publishers who are looking to the future and may be deciding between the Amazon, and other major players, and Scribd.

MARKET ANALYSIS
The purpose of this analysis is to identify the market segments with the greatest potential for Scribd. Scribd offers both a service (publishing and sharing of publications) and a product (publications for sale on the Scribd store). For the purposes of our marketing plan we have chosen market segments that are most likely to purchase the products available through the Scribd store. Revenues gained through advertising are driven by number of visitors to the site, and the likelihood the consumers in that segment will be attracted to the products advertised. The market segments with the most potential for Scribd product revenues are most likely also the people who would interest many of their advertisers.

Potential Market Segments


The market segments are selected based on certain criteria; primarily strong need or desire for published books and other resources, tendency to purchase online, use of the Internet for networking, researching and purchasing, and primarily early adopter and early majority characteristics. The Scribd product, the digital publication, will appeal to some early adopters, but the larger share of buyers will be early majority. Early adopters are attracted by high-risk, high-reward projects, and because they envision great gains from adopting innovation, they are not very price sensitive. The early majority is not looking for revolutionary changes, but is motivated by evolutionary changes that bring about productivity enhancements (Slater, 2007). Change is good, as long as it is proven. The market segments we chose for analysis are student readers (the Internet-savvy college student), leisure readers (the online consumer), and business readers (the career-oriented professional). Student Reader Segment The Internet-savvy college student This segment is defined as all students attending U.S. colleges and universities. There are approximately 18,248,128 potential customers based on this criteria. Most of these students are between the ages of 18 and 30, and are spending an average of $667 per year on textbooks. A very high percentage of those attending colleges and universities are early adopters and early majority consumers. The highest percentage is 25% of males in post-secondary schools consider themselves early adopters. Based on that figure we can assume as high as 80% of uppereducation students are either early adopters or early majority consumers. This group consists of heavy Internet users, who also participate in social networking, online entertainment and online purchasing. About 70% of this group owns a laptop. All students are required to have access to textbooks, and most will purchase them. This group is also more price sensitive than our other segments, and would prefer a used textbook, if it is less expensive, than an e-book. (Allen, 2008)

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Meet Claire. Claire is single and 21, and working on her undergraduate degree in education. Claires parents are paying her tuition and board, but Claire is working part-time to cover the rest of her expenses. And since shes a senior and soon to graduate, Claire is also interested in putting a little money aside to pay for her expenses after graduation. She is considering getting her graduate degree right away, but has her feelers out to see if there are job opportunities after getting her undergrad degree. Claire is very bright, and for the most part, enjoys school. She likes to try new things, and considers herself pretty progressive. She would probably consider herself an early adopter, but, truth be told, may fit more into the early majority consumer group. Like most of her friends, Claire is a very savvy Internet user. She has a Facebook account, gets most of her music from iTunes, and enjoys seeing the YouTube videos her friends are constantly posting. She also spends a great deal of time on her phone, texting friends throughout the day. When the each term starts, Claire always has sticker shock when she realizes how much textbooks cost. Over the last 3 years shes spent around $2000 on books and supplies, but has managed to save some money buying used books and sometimes selling them back to the student bookstore. She feels she would be open to buying e-books online if the price was comparable to used book costs, especially when shes in graduate school, as shell have to work more, have less time and can see that buying books online and getting them downloaded immediately could be a time saver. Segment Attractiveness Market Growth The forecasted growth for people entering colleges over the next four years is an average 4.6% (Cite) Competitive Intensity There are several small competitors that provide similar services to Scribs. Only one, DocStoc, closely matches Scribds service offerings, but is much smaller. For their ecommerce products, the main competitor is Amazon, with Google looming since their announcement they will be launching their own e-book online store. Market Access This consumer group is easy to access. They spend a great deal of time on the Internet and can be targeted through social media, tribe-oriented communications, online advertising, and SEO/SEM tactics. Further, we can access them through on-campus communication tactics as well.

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Leisure Reader Segment The online consumer who enjoys reading. This segment is defined as all U.S. consumers who have Internet connections. The Internet connection criteria allows us to focus on consumers who are more comfortable with Internet transactions, are exposed to Internet searching and possibly social networking. By narrowing the segment in this way, we find there are more early adopters and, especially, more early majority consumers than in the entire segment. This criteria also, then, allows us to factor in demographics and psychographics of the Internet purchaser. As found in Mintels Online Books Online Distribution 10, 639,652 consumers purchase online books. (Mintel , 2004)

Meet Jason. Jason is 42 and an all-American type guy. Hes not a super social person, nor is he completely confidant. He really likes his time at home with the wife and kids. Jason is a golfer, and plays on the company softball team. But he also enjoys surfing the Internet. Hes gotten involved in Facebook at his wifes urging, and is getting a kick out of getting reacquainted with old high school and college buddies. He catches up on events, and has fun by checking out YouTube on a regular basis. Hes into his music, and buys most of it through iTunes. He also likes to read. He likes nonfiction and fiction, has just read the entire set of John Grishams courtroom dramas, and also considers himself a bit of a history nut. Occasionally he buys books about the sports he watches and plays, and his wife passes him the occasional selfhelp book. He still enjoys reading the local paper, but gets most of his news off the Internet. Jason probably reads about 6 books a year, and buys about 10 books a year to give to family and friends. Jason has two children who also enjoy reading.The gift books are ordered online, but are not yet e-books. Segment Attractiveness Market Growth This market grows 13% a year. Competitive Intensity Competitive intensity is high for this category. Amazon is firmly established, a well-known and well-respected brand, with universal reach and millions of customers.

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Market Access This consumer group is most easily accessed through the web. The web campaign would have to have greater reach than for the other groups, as this group is less defined. A traditional campaign would be too far reaching and cost prohibitive. Business Reader Segment The career-oriented professional This segment is defined as those who hold managerial and professional positions, specifically within business services, public and private education, health services, engineering, engineering management, social and legal services. According the Bureau of Labor and Statistics, 2010 projections of the number of jobs meeting that criteria is 82,507,000 (Hecker, 2001). Projected job openings in 2010 requiring an associates degree, or bachelors degree and higher are estimated to be 54,156,000. We are using 50,000,000 as the number of potential business reader customers for segment analysis. The Business Reader segment consists of males and females equally, ages 22 to 62. The majority of this segment lives in or near the cities they work in. The majority have post-secondary educations, and most of them have undergraduate degrees, graduate degrees or professional certifications. Those in the early stages of their careers are single or married with no children, however, most successful executives who are mid- or latecareer are married with children.

Meet Angie. Angie is doing well in her career. Shes 32, is recently married, but has no children. Angie has always been an over-achiever. Her job as a Marketing Manager at a medium-sized and successful manufacturer is a not the end all, but a step in the right direction. Her goals are to learn all she can in her current position, moving up to a possible Director of Marketing position there, and then make the move to a larger player in a related industry. Angie finds she needs to stay current and continuously learn about her industry and her audiences. She frequently reads books and other materials that will help her be successful as an employee, manager, and to become more of an expert in marketing and her industry. Since she has little time, she prefers online search and download as a means to get the information she needs quickly and with little hassle. Angie also has a nice home for entertaining, and likes it to be well furnished. Shopping online works well for her for most things, even brands she has seen in the stores. She likes to shop for price and service, and really likes the convenience of buying from her laptop.

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She and her husband travel when they can, and research their trips thoroughly before they go. They also love their road bikes, and do a bit of touring as well. They are planning on having children in the next few years try to dining out and going out with friends at the end of a long week. Their social networks help them connect with people, let them know whats going on in their busy world and plan events with friends. They also take advantage of sites that recommend entertainment options, home furnishings, music and other interests. Angie is very comfortable surfing the Internet, social networking and taking recommendations from like-minded strangers.

Segment Attractiveness Market Growth This is a fast-growing segment. Growth projections for available jobs in this field average around 12% per year. (Hecker, 2001). Competitive Intensity There are several small competitors on the that provide similar services to Scribs. Only one, DocStoc, closely matches Scribds service offerings, but is much smaller. For their ecommerce products, the main competitor is Amazon, with Google looming since their announcement they will be launching their own ebook online store. Market Access This segment is easily accessed. They spend a great deal of time searching and reading online, and would be prime targets for online advertising, SEO/SEM research tactics, and other campaigns. Further, they have many vertical market and industry related resources, so we could target them both traditionally, print advertising and direct mail, and at industry specific tradeshows and online associations. The following table (Table 4-1) summarizes the core need, demographics, psychographics, value drivers, and price sensitivity for each of the three segments analyzed.

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Core need

Demographics

Psychographics

Value Drivers

Price Sensitivity

The Internetsavvy college student The student reader

Best availability of textbooks and other required published materials at reasonable price

Age 18 30, the average age of an undergraduate is 26, 56% female, 58% of bachelors degrees are earned by women, majority working toward 4-yr. degree

Pretty savvy and into social networking, busy, academic, 99%+ online every week, 70% own laptops, over half watch TV online, half work out regularly, 15% early adopters, 80% buy brand items on sale, 90% pay attention to non-traditional, word of mouth advertising, heavily influenced by peers and like-minded strangers on social networks Likes to read, enjoys leisure time, concerned with self betterment, 65% spend time on YouTube, iTunes, over 60% spend time on social networking sites, they choose websites based over 50% on good design and entertainment value, of all different types of media they prefer the Internet by 80%, importance of watching TV rates around 42%

Delivered initial cost Price sensitivity Website efficiency Best publications & publisher partners Quality material at low price

Very price sensitive, would prefer to purchase less expensive textbooks and will purchase used textbooks over new or ebooks because of price

The online leisure reader

A pleasurable reading experience thats The online consumer reader readily available

Includes online socializers, digital media prosumers, Internet entertainment enthusiasts and other early adopter and early majority consumers. Age varies, average age from 25 to 45, higher percentage married than single, with and without children, high percentage are college educated, varying lifestyles, income averages $60k to $84k, live in suburban single family homes Age 22 62, male and female, single or married, no children, college educated, middle class and higher.

Delivered initial cost Multiple platform capabilities Best reading experience Best publications/ publisher partners Easy search and purchase

Price sensitive if prices are significantly higher. Great shopping experience online would influence price concerns, but only to a degree.

The careeroriented professional The business reader

An efficient and reliable resource, quick searching, immediate availability of published work

Career-oriented, college educated, intelligent, ambitious, like and need to stay informed, current and up to date, continuous learners, online savvy, online purchasers, busy and in need of fast, efficient industry and career resources, higher paid, willing to spend to get what they need, social network joiners

Switching costs Best availability of publications Credibility/stability Easy search

Not as price sensitive, more concerned with quality, availability and efficiency, understand the value of their information resources

Table 4-1 Segments and Criteria Used to Analyze Each Segment

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Figure 4-2 Segment Attractiveness Chart for Key Features, Advantages and Benefits
Segment Attractiveness Factor (SAF) Key Product Features F1 F2 F3 Key Product Advantages A1 A2 A3 Key Product Benefits B1 B2 B3

Segment A Post-secondary student readers Easy-to-use website iPaper multi-platform uploads/downloads Online social network

Segment B Leisure Readers Website layout/functionality Reading experience iPaper multi-platform uploads/downloads

Segment C Business Readers iPaper multi-platform uploads/downloads Embedding capability File storage and indexing

Paper reading platform iPaper multi-platform uploads/downloads Online social network

Paper reading platform iPaper multi-platform uploads/downloads Online social network

Paper reading platform Paper reading platform File storage and indexing

Quick and free global access More pleasurable viewing/reading Document integrity

More pleasurable viewing/reading Multi-platform portable access Social community

Document integrity Privacy Multi-platform portable access

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Figure 4-3 Segment Attractiveness Chart for Key Customer Value Drivers

Key CVDs

Segment A Post-secondary student readers Price sensitivity Website efficiency Best reading experience (feature set) Best vision for writers and readers Best publications/publisher partners Easy to purchase Quality material at low price Easy to search

Segment B Leisure Readers Price sensitivity Multiple platform capabilities Best reading experience (feature set) Best vision for writers and readers Best publications/publisher partners Customer database preferences Best price Easy to search Easy to search Easy to purchase

Segment C Business Readers Switching costs Best availability of publications Best reading experience (feature set) Best vision for writers and readers Credibility and stability. Flexibility Availability Easy to search Easy to search Easy to purchase

Economic Performance Supplier Buyer Motivations & Goals

Situational

Easy to search Flexibility

Figure 4-2 shows the potential revenue for each of Scribds targeted segments. This was derived from TAM/SAM analysis for each segment.
Table 4-4 Segments and Criteria Used to Analyze Each Segment Alloy/Harris College Explorer Survey Mintel Online Books Online Distribition Intel Segmenting US Consumers by Electronic Media Consumption COURSE CORRECTIONS How Digital Textbooks Are Off Track, And How to Set Them Straight

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3-Year Sales Potential

$450,000,000.00 $337,500,000.00 $225,000,000.00 $112,500,000.00 $0.00

Years

SRS COP LRS

SRS 3-Year Sales Potential Revenue


$450,000,000 $337,500,000 $225,000,000 $112,500,000 $0
1 2 3

Years

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LRS 3-Years Sales Potential

$337,500,000 $225,000,000 $112,500,000 $0

Revenue

Years

COP 3-Year Sales Potential Revenue


$337,500,000 $225,000,000 $112,500,000 $0
1 2 3

Years

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Segment Attractiveness
10.0000 8.0000 6.0000 4.0000 2.0000 0.0000
ISCS COP OCR Other

Target Market
The above data has been a compilation of data from Mintel, the Diffusion Company, Alloy Media + Marketing, Bureau of Labor and Statistics and Simplemap. The compilation of data from these reports gives Scribd their three segments target market numbers. The three segments above do not account for all of the total online publishing/reading service market; however it does represent the majority of early majority, innovators users of Scribds market. The internet savvy college student: To find the target market for this segment we used a report from Alloy Media + Marketing that gave us the total number of college students with in the United States. The segmentation dividers that were used to find the target market were: college students that used the internet, early adopter, early majority, buy book online, and eBook purchasers. The career-oriented professional: To find the target market for this segment we used a report from the Bureau of Labor and Statistics to get the total number of professional business people in the United States. The segment dividers used were internet usage, early adopters, online purchasers, and eFile purchasers. The online consumer/leisure reader: To find the target market for this segment we used a report from Simplemap. This report gave the total number of people using the internet in the United States. The segment dividers used were book buyers, early majority, online book buyers, eFile purchasers.

Maximum Opportunity
Upon reviewing our research and data using the market sizing and forecasting model provided in class, (Harmon, 2009) we have come to the conclusion that the Internet Savvy College Student segment represents the highest market potential for Scribd with $1.3 Billion. The next highest segment includes the Career Oriented Professional that represents a market potential of $166MM. The Leisure Reader Segment falls into last place among the three targeted segment markets with a $57MM market potential. To reach these market values, our team pulled data from a variety of key sources including industry reports from Mintel to economic data provided by government agencies. The table below represents our findings for each segment within the U.S. market. Our total market potential represents a 25.24 percent share of the total tax payer population in the U.S. with a $1.5 Billion market potential.

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ISCS Total Buyers Average Purchase Price Segment Potential 14,233,540 $92.89 18,151,540 $28.5

COP 5,000,636 $11.41 $57,057,257

OCR

Other Market Potential 2,000,000 $1.25 $2,500,000 $1,547,978,894

39,385,716

$1,322,153,531 $166,268,106

Table 4-2 Segment Potential We used our research to find the total buyers that represent each segments total buyer numbers. We then were able to make a reasonable estimate for each segments average purchase price by using other resources such as Amazon.com. We took an average of 30 random educational books offered on Amazon to get the purchase price for the Internet-savvy college student. We then took this average and multiplied it by 8.5 to get the yearly purchase price for this segment at $667. We used 8.5 because students need to be registered in three classes within a term based school to be a full time student. For three classes a term and three terms in a year that would make for students having to purchase a total of nine books a year. As for students enrolled in a semester based school, they need to be registered in four classes to be a full time student. With two semesters students would be asked to purchase eight books per year. Using an average of the two we arrived at 8.5. For the career-oriented professional average purchase price we took the average of all the business offerings from the Scribd website to come up with $28.5. We made a reasonable estimate that this segment would buy 4.5 books a year to give them yearly expenditure of $128. For the last targeted segment the online consumer reader we took the average of the current offerings from the Scribd website to get the average purchase price. As for their yearly purchase frequency we made a reasonable estimate of six times a year. This creates an average yearly purchase expenditure of $68 for this market segment. We estimated the remaining segment to have a low average purchase price due to the fact that we believe they would be using the site more for the free offerings and purchasing inexpensive offerings very infrequently.

Potential new markets. As Scribd has started a new market for online document sharing that has quickly become a high volume market they were able to attract a large number of the available market share do to their introduction of a distributive technology with their iPaper platform. They have an opportunity to innovate further and to branch into new markets or partner with other file sharing industry leaders to become the one stop shop for sharing files across the internet. With global reach Scribd also has the opportunity to compete with the likes of Amazon in developing countries and markets where Amazon does not already have a strangle hold on the market.

Conclusions
After analyzing all of our findings we have come to the conclusion that Scribd has a very viable market to target in online document sharing. Within this market we believe Scribds focus should be on targeting the Internet-savvy college student segment which represents around 85% of the total market potential. This $1.3 Billion market potential is key for Scribd to be able to compete in a hyper-competitive new market with players like Amazon and Docstoc. Scribd needs to stay focused on continuing to increase the value they offer to their customers through innovation and partnerships within their value chain. With a focus on innovation Scribd can also increase the market barriers for new entrants and provide them with a competitive advantage over their competition. Scribd needs to focus on what their target consumers feel are the key product features, advantages, and benefits that add value to the customer. These include an easy to use website

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that has the latest and best available uploading and downloading capabilities. The company also has to be able to provide a document reading platform to compete with the Kindle and other products currently available to this market segment. This would also tie into their adding value through a more pleasurable viewing and reading experience along with more global access. Another strategy Scribd needs to follow is to match up their offerings with the voice of the Internet-savvy college consumer. This segment is very price sensitive, that appreciates the companies vision for writers and readers, enjoys using a website that is efficient, and offers a great reading experience. This segment is motivated by quality material that is available at a low price, that involves hassle free and flexible ways of exploring this quality material.

COMPETITOR ANALYSIS Industry Dynamics


The competitor analysis for Scribd will focus on two main competitors: Amazon Kindle and Docstoc. Scribd and its competitors will be analyzed through Porters Model, competitive factors, industry competition, and industry benchmarks. This analysis will give a snap shot of where Scribd currently stands against competitors. It will show what areas Scribd needs to improve in as well as what areas they are strong in. Porters Model The Porters Five Forces model is included in this marketing strategy for the purpose of determining any potential threats Scribd faces within the market it currently serves. The model will analyze Scribds current position in the market, as well as its current and potential competitors. Since the introduction of Scribd, numerous businesses have adopted the idea of having digital books available online. Increased competition, the introduction of pricing for digital books, as well as innovative platforms to upload and download books have all provided a basis for this model.

Figure 5-1 Scribd First Year Porters Five Forces Model

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Existing Industry Competition Since the introduction of digital books, there has been an increase in the number of businesses that are tapping into this market providing services for authors and products for readers. Currently, there are two main competitors Scribd faces in this industry: Amazon (Kindle) and Docstoc. A high level of competition exists among these three businesses because they are all attempting to gain a large market share of e-book readers. Amazon (Kindle) has proved to be one of Scribds most threatening competitors. Although the Kindle is an entirely different platform reader experience reading printed books, it perceived as a threat to Scribds potential customer market. According to Amazon.com, Amazon can currently provide over 300,000 books for their Kindle platform, and has an average of 65 million unique visitors to the website each month. To compete, Scribd needs to introduce more products or services that to counter Amazons advantage. And advantage, and disadvantage for Scribd is their pricing structure. Currently, Scribd allows authors and publishers to set their own prices and to receive 80% of all profits made from their book sales (Scribd). The authors can choose to set their prices lower, given the higher percentage of the asking price, but publishers may not choose to be as competitive. Amazon is discounting many of their books, such as those on the New York bestseller list to under $10.00 (Amazon). The set the price paid to authors for books with only a 35% return on revenue to authors (Switch11, 2009). The second major competitor for Scribd is Docstoc. Docstoc has a business model that closely resembles very Scribds. Docstoc currently does not charge visitors to download books posted on their website; however, they soon will. Docstoc is also creating a store much like Scribds, where they will also charge readers to download books. However, Docstoc has a narrow focus with types of books offered, which include only business and education publications. This makes Docstoc less of a threat to Scribd. It is important to note that although Docstoc does not offer all of the same products as Scribd, they can, and may, change their strategy and expand their categories of books and publications, thus going after a larger share of the market. To stay competitive within the market, companies have had to become more innovative and provide greater depth and value of products and services. Competitors will constantly be searching for ways to update their technical platforms to make the experience of buying and reading e-books and e-publications a more desirable choice. All key competitors may be forced to maintain low prices and expand their technological capabilities. For example, with the Kindle, Amazon provides a digital platform that is not only portable, but also is audible.

Threat of Potential Entrants E-books have recently become an alternative for readers who normally buy paperback books. With the emergence of this new product offering, Scribd faces a large threat of potential entrants. Scribd came out with digital books for free in 2007, and only opened their ecommerce store in May of this year. (Snyder, 2009). In that period of time, several smaller companies have come out with similar service offerings. It is the larger, previously established companies, with brand names that are well known that provide the greatest threat with regard to sales of digital publications. Sales of books and e-books online dont have the same kind of overhead as brick-and-mortar stores. Because of the significantly smaller start-up costs, it is easier for businesses built around their websites to open a business, and greater potential for multiple competitors to spring up. Also, because of the Scribd business model, which favors both authors and readers, is already established, new potential competitors can see that starting a business in e-book publishing and retailing is financially feasible. Another potential threat for entrants is online book retailers of printed books. Scribds offering can be identical, as publications uploaded with iPaper look just like the original book or publication, but in digital format. The result is a reduction of market share for these online bookstores. If market share decreases, they may be inclined to offer the same services as Scribd to maintain

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their market share. Large online bookstores such as Barnes & Noble, Powells Books, and Borders have the infrastructure to sell digital books are also a significant threat to Scribd. Threat of Substitute Products In addition to competition from other book retailers, Scribd faces the a real threat with substitutes. A current threat as a substitute product is the Amazon Kindle. Currently, Scribd only offers their books in digital format that can only be read on a computer screen or on paper if the e-book is printed out by the reader. Amazon has introduced a platform with the Kindle, where the book, or library, is portable, and can provide a more interactive experience with the reader. Amazon Kindle also allows the user to download the book and take advantage of an audio feature, and listen to the book as it is read to them. Sribd could stay competitive by either creating an innovative product similar to Kindle, that encourages the reader to continue using Scribds products, which seems to be contrary to their vision, and/or they need to enhance the services they currently offer on their website, making it more appealing reading on a screen, such as a laptop or other computer, rather to a handheld device. Other substitute products Scribd currently faces are books on DVDs and MP3 players. Downloading a book in audible format has become incredibly popular. Many customers are reverting to this substitute product because of their desire or need to multi-task. For example, they can listen to a book and work out or drive a car. Substitutes are a threat to Scribd, and one they need to stay aware of and evolve and innovate for. Bargaining Power of Customers The bargaining power for customers is very high, primarily because they have opportunities to buy the same product from multiple stores. Scribd encourages authors to set low prices by offering a large return on profits. If Scribd cannot beat competitors prices, the reader can easily go to another source to buy the same book. However, it is important to know that Scribd has created this bargaining power for customers. They have encouraged authors to set low prices based on the price elasticity of the market. Therefore, with the encouragement of Scribd to maintain low prices, customers simply support this business model because it ultimately benefits them in the end. Again, however, larger commercial publishers may not be as willing to discount prices, even with the generous revenue split. Bargaining Power of Suppliers There are two main suppliers that Scribd has leveraged to grow their business. The first supplier is individual authors that have supplied their work without the help of a publishing firm. The bargaining power for suppliers is very high because these suppliers are the only source that supplies the product to the reader. Scribd has allowed the bargaining power of suppliers to be their top priority. The authors have a lot of bargaining power because they have the ability to set their own prices for their books and also have been given an 80 percent profit on all of their books. They also have the choice of whether or not they would like to offer the book for free. Scribd has given these authors a huge amount of bargaining power because they are their biggest vendor. The site has proven to produce a large amount of hits without the charge for books; however, Scribd has been able to see how much traffic has been drawn to this website once they have allowed authors to charge for their books because customers are in high demand to read mainstream pieces. The second main supplier is publishers. Scribd has just begun to do business with major publishing companies and has given them a large amount of bargaining power as well. They have allowed the publishers to choose the price for their books with the same terms for individual authors. The reason why Scribd has given major publishing firms the same amount of bargaining power as individual authors is because these books that will be uploaded on the site will attract an enormous amount of customers. Mainstream books will allow the website to become

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mainstream. It will increase the market share for Scribd and will also expand the target market segment. It is important for Scribd to give a lot of bargaining power to their two main suppliers because they are the ones that drive traffic to the website and maintain readership. Porters Five Future Forces For the second year, the e-book industry is expected to gain more entrants that will further competition with Scribd. ITunes and Google will have successfully implemented an online books stores for readers. Large retailers selling printed books is going to be a huge threat for Scribd as they figure out a way to upload their books online and make it easy for readers to download. The market segments will remain the same for Scribd, but there is a risk they will lose market share with these segments as competitors increase.

Figure 5-2 Scribd Second Year Porters Five Forces Model

For the third year, there is a possibility Docstoc will no longer be in business as they learn their market is too segmented and business and educational readers can the same reading materials through Scribd. At this point in time, large book retailers who sell printed books will have successfully joined the e-book industry as they master the technology used to upload and download books. The bargaining power will raise even more as consumers are exposed to more choices when searching for a book online.

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Figure 5-3 Scribd Third Year Porters Five Forces Model

Sources of Competitive Advantages Price Scribd has been able to maintain a competitive advantage due to the low price points the books are sold at. Because authors receive a much larger percentage of profits than they normally would if they sold the book through other retail outlets, they are willing to sell their book for a very cheap price because they still make a large profit off sales. Amazon chooses the price the book is sold for on Kindle, and provides little room for the customer to choose the price. Scribd has placed itself in the perfect position because they are able to create the greatest customer value by charging a low price but not low enough to make the customer believe the writing is not worth reading. iPaper Scribd has perfected its digital platform that allows easy access to upload and download digital documents. Unlike Kindle, where the customer first has to buy the product and wait for it to come in the mail before they can begin reading books, iPaper allows the customer to instantly download books. iPaper does not require users to download additional software programs in order to digitally read books. Instead the program is a click away from receiving a book online. This program has also allowed the process of uploading written works from authors to be very easy and less time consuming than others. iPaper is the leading platform in the e-book industry that creates the most user-friendly experience for both the author and the reader. Open to the Public Scribd has maintained a strong competitive advantage because they give everyone the opportunity to publish their work on this website. Customers are attracted to this website because they are not only exposed to mainstream writings, but also are exposed to writings that are not mainstream but has the potential to be. The beauty of this website is that anyone can be

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published not just those that go through the formal process of a publishing firm. Because Scribd allows everyone to write, they also have a large amount of product offerings. For example, blogs, books, lyrics, and poems can all be posted on this website for the public to see. Scribd has gained a competitive advantage because they have opened the website to the public and have shown their main goal is not to make profits, but to spread the excitement for reading.

Competitive Barriers Technology Currently Scribd has maintained competition with Amazon Kindle through the use of their new platform iPaper. However, iPaper is not enough to keep Scribd competitive if Amazon is coming out with a portable digital reading platform. Scribd will eventually encounter a barrier that is caused by technology. They need to find a way that can make the reading experience more interactive for the reader besides clicking through digital pages. Amazon Kindle has invented a device that reads like a book and can download a book within 60 seconds. Technology will eventually become a huge competitive barrier for Scribd as more companies adopt the same business model and program for readers to read books digitally. Scribd is currently ahead of the technological curve compared to Docstoc because they have created a program that is hassle free for uploading and downloading books. However, once companies, such as Docstoc, create programs similar to iPaper, what is the next technological move going to be for Scribd to stay competitive? Plagiarism Plagiarism has come to be a competitive barrier for Scribd as users have figured out they can upload other peoples works and receive profit off of those sales. Authors are becoming more hesitant to use this program because they face the possibility of people plagiarizing their work. For example, if a book is put in digital form for the first time, it is much easier for people to copy and paste their work onto another website and start earning profits. Kindle has been able to overcome this problem because the book can only be uploaded on the device which does not have a copy and paste function. Also, they review all books uploaded so they are able to see where the content is coming from. Currently Scribd is trying to break this competitive barrier by encouraging readers and authors to report writings that could be plagiarized, however with over 35 million words uploaded (Scribd), Scribd is chasing a problem that is moving at a much faster rate than they are. Commitment to Market The last competitive barrier Scribd faces is their commitment to the market. Scribd is brand new to the market, and many concerns have been voiced in terms of credibility and reliability. Every new company faces the problem of needing to build trust with the customers before they can become successful. Right now, authors are unsure of how long Scribd is going to stay in business, so they are hesitant to post their documents if this website is not reliable. Also, authors are also hesitant to post their work because they do not know how credible the site is. They are instead choosing retailers that have been around longer and can offer the safety protection for plagiarism. Consolidation The potential for a Scribd merger or acquisition is moderately high. Scribd currently is seeking a partnership with Amazon to use the Kindle as an additional platform for downloading. Acquisition by Google might also be a possibility in the future. Partnerships/Alliances Scribds primary partnerships will be major publishers. Scribd has recently partnered with Random House, Simon & Schuster and other major publishers (Snyder, 2009). Scribd has

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negotiated with publishers to have selected books for free, and charge the publishers price for the all other books. The free offering will drive traffic to the website, and pull the readers by, in essence, seeding the product. The publishers will bring in a greater market share for Scribd as they expand their current market to include mainstream readers and others. According to Chris Snyder, Publishers hope to boost both print and e-book sales through e-book sharing and word of mouth (2009). Other major partners listed on Scribds website consist of the following companies: Environmental Health Perspectives Workman World Economic Forum Berrett-Koehler Publishers The New York Times TechCrunch Baltimore Police Carnegie Endowment for International Peace Cato Institute (Scribd) Value Chain There are three steps in the value chain that Scribd completes in order to gain a competitive advantage over others companies. With their popular website and ser-friendly platform (iPaper), in place, Scribd first begins collecting written material from the public. They encourage anyone who has passion for writing to upload their work. The written documents, in this case, are the inventory or input of materials. The second step Scribd completes to add value to the product is publishing it into a readable format for consumers. This step can also be considered as outbound logistics as it takes the finished product and gets that product to the customer. Marketing on the website includes featuring books people are currently reading, featuring books for exploration, and featuring exclusive first looks. Authors do not need to manage this section of value chain activities. The third step in the value chain is provision of reader and author services, in example, the system they have developed to curb plagiarism. Toward that goals, if someone other than the author is selling a book, Scribd immediately removes it from the site. Site maintenance and improvements and customer support are key services that add value for customers as well. The last step Scribd completes in the value chain is marketing and sales of the product, such as featuring publications. The site also has free book search function for readers. Scribd also has an impressive PR history, and the numerous articles published about the company drive traffic to the website.

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Business Ecosystem This table illustrates all of the customers, suppliers, competitors, and partnerships that work together to create an ecosystem for e-books. This table summarizes the core factors that allow the e-book industry to be successful.

Figure 5-4 The Scribd Business Ecosystem

Three main areas make up the business ecosystem that supports industry for e-books: Core Enterprise, Extended Enterprise, and the Outer Business Ecosystem. The first, Core Enterprise, is comprised of the direct suppliers, and channels that allow this industry to flourish. Publishers, authors, and media companies make up the suppliers because they provide written material that can be sold and distributed over the Internet. The distribution channel that is used allows information to be passed is the Internet itself. The Internet encompasses the websites that booksellers use to upload and download books for readers. The second section of the business ecosystem is the Extended Enterprise. This section consists of direct customers, which include Scribds three main market segments: leisure readers, business readers, and student readers. They use the services offered and build traffic for the website. The last section that makes up the business ecosystem is the Outer Business Ecosystem. This section includes investors, partners and stakeholders that are involved in the e-book industry. Scribds partners and investors are listed in this outer portion. Also within this section are Scribds current competitors. These are classified as stakeholders. All three areas work together to make up the business ecosystem for e-books. Each factor listed within the model has a stake in the e-book industry. If one factor changes, other factors will change within the ecosystem as they all work off of each other to create a successful industry.

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Competitive Factors Mapping Key Competitive Factors Author Perspective Profit Structure Authors are choosing online publishers based on pricing strategy i.e. how much profit they can make on a sale. The benefits of having a selling a book on a website need to outweigh the costs, which is why online booksellers are competing on price strategy with regard to writer/publisher advantage. Whoever can provide the most profit to the author is more likely to maintain that partnership. Amazon currently gives authors 35 percent of profits while Scribd gives the authors 80 percent (Switch11, 2009). Docstoc offers a small revenue stream for their writers and publishers through paper monetization. The profit structure is an important factor for pulling in authors, which ultimately pulls in readers. Pricing Authors want the ability to sell their book for a reasonable price and to have some say the selling price for their publications. Competitors are attempting to undercut prices so they can gain a competitive advantage; however, it is important to understand the value the author sees in their work as well as the value customers see in the books. One of the great advantages Scribd has over Amazon and Docstoc is their flexible pricing strategy, which allows writers and publishers to set their own publication price. This creates bargaining power for the authors. The more bargaining power they have, the more likely they are to form lasting relationships with the online publisher. Hits per Site When determining which company to online publisher or retailer to partner with, traffic to the site is should be a key consideration. Because the authors goal is to increase e-book sales, therefore the most attractive partner is the one with the site that gives them the greatest opportunity to reach these potential customers. Ease of Uploading via Digital Platform The website needs to be user-friendly for the author. Ease of use is a key advantage. A website that is simple, easy, and fast will ensure the best results for authors that upload their work. Companies should be competing to find the easiest way for authors to upload their works because they know this industry can be easily substituted by the traditional methods of printing. Safety of Use If a website is notorious for people gathering and plagiarizing written pieces, an author is less likely to use that service. Also, if the website lacks safety in regards for plagiarism, the websites reputation may be tarnished which could lead the author to publish elsewhere. Platforms that make it easy for readers to upload and authors to download, also make it easy for plagiarism to occur. A website with the best security measures that monitor and react quickly to gain a huge competitive advantage. Authors require a safe place to share their work. Dedication to the Written Word All of the authors are dedicated to the written word. Scribds vision is built on this value. The more dedicated publisher is to writing and the creative process, the more likely they will provide a positive experience and environment for the author. If a site is only concerned with maximum revenue and easy sales of mainstream books and publications, and doesnt value its contributors and their contributions, they run the risk of alienating authors, who may go elsewhere.

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Contrast Matrix The Contrast Matrix is used to summarize the core demographics, psychographics, value drivers, brand loyalty, product usage, price sensitivity, and market size of each market segment Scribd currently serves.

Demographics

Internet-savvy College Student The Student Reader Age 18 to 30, 56% females, majority working toward bachelors degree, 58% are single, 27% are in committed partnerships, 63% have paying jobs, 24% work more than one job, 47% of jobholders work to pay some or all college & personal expenses. Into social networking, 99% online each week, 70% own laptops, 80% early adopter + early majority, 90% pay attention to non-traditional word-of-mouth advertising, heavily influenced by peers and like-minded strangers

The Online Consumer The Leisure Reader Age varies, from 25 to 45, more are married than single, with and without children, high percentage are college educated, income ave. $60k to $84k, live in suburbs, single family homes

The Career-oriented Professional The Leisure Reader Age 22 to 62, male and female, single or married, no children, college educated, middle class and above.

Psychographics

Likes to read, enjoys leisure time, concerned with self betterment, 65% spend time on YouTube, iTunes, over 60% spend time on social networking sites, they choose websites based over 50% on good design and entertainment value, of all different types of media they prefer the Internet by 80%, importance of watching TV rates around 42% Delivered initial cost Multiple platform capabilities Best reading experience Best publications/publisher partners Easy search and purchase Switching costs

Career-oriented, college educated, intelligent, ambitious, like and need to stay informed, current and up to date, continuous learners, online savvy, online purchasers, busy and in need of fast, efficient industry and career resources, higher paid, willing to spend to get what they need, social network joiners

Value Drivers

Delivered initial cost Multiple platform capabilities Best reading experience Best publications/publisher partners Easy search and purchase Switching costs High for items like apparel. Specific books are required, so doesnt apply. Shop for best price. High because of requirement, 6 very expensive books per year. High
10,218,952

Delivered initial cost Multiple platform capabilities Best reading experience Best publications/publisher partners Easy search and purchase Switching costs

Brand Loyalty Product Usage Price Sensitivity Market Size

Medium level of brand loyalty. Medium level of brand loyalty. Brand loyalty here refers to website Brand loyalty here refers to and company, not products. website and company, not products. Medium, averaging around 5 High, averaging around 5 inexpensive books per year. moderately expensive books per year. Medium Low
39,355,839 38,896,213

Figure 5-3 Scribd Third Year Porters Five Forces Model (Sources: Student Demographics, Spring 2008 Results, Profile of the American College Student, www.dsa.vt.edu/facultyandstaff/documents, p. 9 13. Bureau of Labor and Statistics [Jason?])

The table below is used to compare Scribd, Amazon (Kindle), and Docstoc in regards to how much they offer for each competitive factor. It summarizes each competitors current offerings to the customer for each factor listed. It is used to determine the weights for the Strategy Canvas proceeding this table.
Competitive Factors Profit Structure Scribd Authors receive 80% of the profits and Scribd receives 20% (Amazon) Amazon (Kindle) Authors receive 35% profits and Amazon receives 65% (Switch11, 2009) Docstoc Doctstoc currently does not sell any products.

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Pricing

Authors choose price they would like to sell products for 50 million per month (Scribd) iPaper offers support for 17+ different file formats and converts them all flawlessly for reading in their iPaper reader. (Scribd)

Amazon sets the price for authors

Docstoc does not offer pricing options

Hits per Site Ease of Uploading Documents

65 million per month (Amazon) 4 million per month Any book published cannot be Requires built in flash for upload uploaded by the author. Amazon needs to approve the book and they will then upload it.

Safety of Use

Scribd has had problems with plagiarism because people can upload anything they want. Previously, people have been publishing others' written work and then taking the profits. Scribd allows users to report plagiarized work and Scribd immediately takes it off of the website

Amazon approves all books that are sold through Kindle. The only books allowed on the site are those that have already been published. They have a high amount of safety for the author.

Docstoc allows all users to upload materials. Similar to Scribd, they cannot track plagiarized uploads unless it has been reported.

Dedication to Written Word

Scribd allows all types of writings to be posted on this site. There dedication to the written word is very strong.

Amazon's dedication to the written word is not as strong because they monitor the content that is published on the site. Their goal is also to make profit off of the books instead of spreading others' writings for an affordable price.

Docstoc has a strong dedication to the written word, however, it is not as high as Scribd because they limit the focus in regards to the type of work that should be published on the site. They prefer only business and educational material and do not support other types of writings. This makes their dedication a little lower than Scribd

Table 5-5 Competitive Factors Author perspective

The Competitive Factors table is used to score each competitor based on how much of each competitive factor they offer. This table takes qualitative data from the table above and turns it into meaningful numerical data that can be used to rank each competitor based on the amount of offerings they offer to the author.
Competitive Factors Pr ofit Str uctur e Pr icing Fr eedom Hits per site Ease of uploading book Safety Dedic ation to Wr itten wor d Total Weighted Aver ages Scribd 5 5 3 4.5 2 5 24.5 4.08 Amazon 3 1 4.5 4.5 5 3 21 3.5 Docstoc 1 1 2 3 2 4 13 2.17

Table 5-6 Competitive Factors Weighted Averages Author perspective

This graph illustrates visually how each competitor varies in terms of competitive factors. The Strategy Canvas shows a value curve which summarizes how each competitor is doing within each competitive factor segment.

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4 Degree of Offerings

Scr ibd

0 Profit Structure Pricing Freedom Hits per site of uploading book Ease Safety Dedication to Written word Competitive Factors
Figure 5-7 Competitive Factors Comparison

Analysis: With regard to authors competitive factors, Scribd is the leading company in profit structure, pricing freedom, and dedication to the written word. Scribd.com is following closely behind Amazon.com in hits per website. Both web sites are new to e-books, but Scribds numbers are very impressive given the large breadth and depth of products Amazon sells, and their brand equity and longevity. Currently, Scribd is unique in valuing and espousing dedication to the written word; however, they need to continue to enhance and add more services for authors to help them enhance and sell their publications. Scribd has the potential to maintain leadership in this section if they are persistent in providing services to the author.

Key Competitive Factors Consumer Perspective Price Price is a key factor for consumers, when deciding to make a purchase and who to purchase from. If one companys e-book provides a very similar reading experience and searching experience as all the others, the deciding factor will, most likely, be price. Consumers continuously seek a product that has high value at a low cost.

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Digital Reading Experience With the adoption of e-books, readers are switching over from printed books because of factors such as convenience, portability and flexibility. Innovators and early adopters are the first to purchase e-books, which is why it is crucial to create the best digital experience for readers to spread the word about e-books. Most readers will adopt the digital reading alternative if they feel they can enhance the reading experience. Companies are continually innovating over to meet this consumer need to become the leader in digital books and publications based on reading experience. It is also important to provide a positive digital reading experience because if readers are unsatisfied with the current offerings, they will return to printed books. Digital reading experience is a key competitive factor. Speed, Ease of Purchase and Convenience Readers are switching over to e-books because the ease and speed of purchase and immediate download. The Scribd site, along with Amazons site, is easy to use, easy to search and easy to purchase from. Amazon can download a book to the Kindle within 60 seconds (Amazon), which has given them a competitive advantage over other e-book suppliers. The online book ordering process also takes little time, but delivery date is dependent on shipping and handling. Readers can substitute the digital book for a printed book, but that requires travel time to and from the store, shopping, and purchasing, which may involve waiting in line. Immediate gratification is more and more an expectation of consumers in general, and e-books can satisfy that desire. Variety of Publications Consumers seek a retailer that can provide literature that fits within their interests. It is a competitive advantage with the online consumer segment to have a large variety of publications. All three competitors supply different focuses on the type of reading material they offer. Amazon focuses on mainstream books that have been published already by large publishing firms. Docstoc supplies reading materials that fit in with business and education. Lastly, Scribd supplies all different types of reading materials ranging from mainstream, business, educational, or purely entertainment. The table below is used to compare Scribd, Amazon (Kindle), and Docstoc in regards to how much they offer for each competitive factor. It summarizes each competitors current offerings to the customer for each factor listed. It is used to determine the weights for the Strategy Canvas proceeding this table.
Competitive Factors Price Scribd Scribd allows their publisher partners to set their own prices, and keeps 20% of the retail price, with 80% going to the publisher (Scribd). Because of this pricing strategy Scribd prices range and are not discounted. Docstoc All Docstoc work is downloaded free of charge. Docstoc is most favorable when looking at price alone. Kindle Kindle requires the actual purchase of the Kindle device that ranges from $300 to $400. Amazon sets prices of publishers work and often ranks higher in price compared to competitors.

Digital Experience

Documents are available for immediate reading via their iPaper reading interface. iPaper reading interface translates documents such as PDF, PowerPoint, DOC files pixel for pixel to provide a seamless online viewing experience.

Documents are available for immediate reading via their Docstoc reader. Docstoc's reader translates documents such as PDF, PowerPoint, DOC files pixel for pixel to provide a seamless online viewing experience.

Makes the book more interactive for reader. Most comparable product to having and actual hard copy reading experience. Can transform reading into audio experience.

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Speed In Download

iPaper is embedded within Scribd's website (as well as any other site that chooses to embed the iPaper reader within their pages). All of Scribd's content is available online.

Docstoc's reader is embedded within Docstoc's website (as well as any other site that chooses to embed the Docstoc reader within their pages). All of Docstoc's content is available online.

Any of the books are delivered electronically in less than 60 seconds via the Kindle's 3G wireless connection.

Purchase Experience

Simplicity, ease, and convenience in buying situation are distinct characteristics that set Scribd apart from competitors. Cleanliness of Scribd website makes for a uncluttered buying experience.

Clean and defined viewing. Docstoc is focused in on education and business and clearly outlines search options to get to where consumers need to be.

Kindle requires the actual purchase of the Kindle reader. Accessories are needed along with actual device.

Convenience

Documents are available for immediate reading via their iPaper reading interface.

Documents are available for immediate reading via their Docstoc reader.

Kindle device is needed for download. Once device is purchased writings can be downloaded within 60 seconds. Published work only, ability for 300,000 books plus magazines, newspapers, and blogs available in entertainment category.

Variety In Literature

5,000 plus available published offerings. Individual literature from around the world published daily. Wider variety unique writing.

Centralized in business and education. Individual literature from around the world published daily.

Table 5-5 Competitive Factors The consumers perspective

The Competitive Factors table is used to score each competitor based on how much of each competitive factor they offer. This table takes qualitative data from the table above and turns it into meaningful numerical data that can be used to rank each competitor based on the amount of offerings they offer to the author.
Competitive Factors Price Digital Experience Download Speed Ease of Purchase Convenience Variety in Literature Totals Weighted Average Scribd 4 4 4 4.5 4.5 4.5 25.5 4.25 Amazon 3 5 5 4 3 4 24 4.00 Docstoc 5 3 2 4 4.5 2 20.5 3.42

Table 5-5 Competitive Factors Weights The consumers perspective

This graph illustrates visually how each competitor varies in terms of competitive factors. The Strategy Canvas shows a value curve which summarizes how each competitor is doing within each competitive factor segment.

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4 Degree of Offerings

Scr ibd

0 Price Digital Experience Download Speed of Purchase Ease Convenience Variety in Literature Competitive Factors

Table 5-5 Strategy Canvas The consumers perspective

Analysis From the customers perspective, Scribd has the strongest competitive advantage in terms of weighted averages. However, they need to focus their efforts on creating a more enhancing and interactive digital experience for the customer. They should also focus on providing a platform that makes the purchasing process easier and more convenient. Scribd is very competitive in the market, however, there are many areas in which the product can improve on. The customer seems to be most interested in the technology the product has, and dominates the field in purchasing experience as well as variety in literature. These are important aspects Scribd should focus strongly on because the ability to substitute Scribd with other products is very high.

Competitor Profiles
Market Leader Amazon sells millions of books, movies, music and everything down to auto parts and toys. The company is a distribution giant, with millions of users and purchases. Amazon is known for their competitive prices emphasized through books. Amazon offers users many different services through their website such as document storage through Docstoc, and eBook sales and their wireless digital reader through Kindle. Headquarter Locations

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Amazon.com (Kindle) 1200 12th Ave south Ste. 1200 Seattle, WA 98144 Number of employees Amazon currently employs 20,700 employees; of which 1,000 preside at headquarters. Employment has increased about 22% from December 2007 to December 2008 (Crunchbase.com 2009) Growth Strategy Docstoc Docstocs growth strategy is to expand their document database and user database, both new and continuing users. Docstoc also is in the process of innovating new technology to improve their viewing, formatting and embedding functions to differentiate their site from competitors. These technology advancements make their site a more desirable space to view and store professional documents. Docstoc not only is utilizing technology to improve their platform for growth, but they are also adding a bookstore similar to Scribds. Docstoc will now allow authors to charge for their books and will keep a percentage of profits. This addition is made to grow the company financially. Amazon The main growth strategy includes constant device updates to improve the reading experience and break the barrier between reading a digital book and a traditional book. They improve their technology continually to enhance the reading experience and maintain a competitive advantage. Amazon continues to provide more services to the reader with each device update in order to attract more customers to grow the company. Market Position, Reach and Marketing Objective Docstoc Docstoc has geared their market position towards being the professionally lead document storage website. The companys objectives include continuing technology innovation to support the needs of educators and business professionals, along with improving readership. Docstocs market reach includes business professionals, educators, students, and some leisure readers. Amazon Amazon is the current technology leader in wireless reading devices. They have continually improved their product to create a better digital reading experience. The company strategically positions themselves to have a continually expanding library through Amazon.com. Amazons market reach is global and universal.

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Company Strategy Scribd Create profitability through sales continually grow library, user base and readership Gain readership of business professionals and gain document accessibility

Brand Position To create a place for every writer to be able to publish their work, and for every reader to enjoy their reading experience To be the professional publishing website that consumers know and trust

Growth Strategy Continually innovate new technology to make better writing and reading experience. To continue growing partnerships with publishing companies To continually grow relationships with professional and businesss. Improve their technology to enhance the web-based experience. Continually grow with Amazon to expand their library, and continually be in the forefront of innovative reading technology

Market Strategy To gain readership through improved technology, and publisher partnership

Docstoc

To differentiate themselves as the more trusted professional document storage site. Provide customers with the entertainment and convenience of being able to read anytime anywhere

Kindle

To make kindle units the universal digital reading device for every household, and continually expand their library and e-book sales through Amazon

To create the most realistic and convenient digital reading experience

Table 5-5 Company Strategy, Brand Position, Growth Strategy, and Market Strategy by Competitors

This table represents the different strategies of Kindle, Docstoc, and Scribd. It shows the different company cultures, and how they position their brand around them. The table shows the differentiation of the market, and the specific strategies each company is using to gain a competitive advantage. Technology and Innovation Docstoc has improved their technology to have better embedding functionality. The company is constantly improving their platform to compete with iPaper. They also supply technology advancements through API and widgets. API and widgets help set up new users, update, search, also makes it possible to set up ads, and also make it possible for document to be read by other users on different web sites Kindle has reinvented the reading experience through their wireless reading device. Although they are not the only company to produce this type of device, Kindle is leading the industry with their newest device called Kindle DX. The new device is thinner and lighter than their old device, and has advanced antiglare screen, along with page turning abilities to make for a more traditional reading experience. Financial Position Amazon had operating revenue in 2008 of $19,166,000 which was up from their 2007 operating revenue of $14,835,000. The company also has a positive cash flow of $985,000. Docstoc is a venture-backed company with current funding around $4,000,000. Most of their funding is through Rustic Canyon Partners. (Crunchbase.com 2009) Pricing and Cost Structure Docstoc is currently a free space to store your documents and published work. Kindle on the other hand has a high startup cost for the consumer. The least expensive Kindle device starts at $299 and the most expensive device sits at $489 through Amazon.com. Amazon currently sets the price of their eBooks at $9.99, taking a several dollar loss on many books from the publishers. (Rich, 2009) Partnerships and Alliances and Industry Expertise

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Both Docstoc and Kindle have a strong alliance in Amazon.com, along with Amazons continuous stream of partnerships. Docstoc is a partner of Amazon, while Kindle is a division of Amazon. Amazons other alliances include Netscape, Yahoo, Prodigy, AltaVista, and many more. This partnership strongly benefits Kindle due Amazons vast library of e-books. The partnership with Amazon also provides both Docstoc and Kindle with a vast amount of web-based retail and ecommerce expertise. Distribution Docstoc is a self distributing site where readers can obtain others work, or authors can self distributes their own. Kindle devices are distributed through Amazon, along with the e-books. Amazon is working to continually integrate these systems to make an easier environment for the consumer by providing a faster downloading speed and making the device portable. Disruptive Potential Disruptive potential to both Kindle and Docstoc is the threat of new entrants in the market. Many companies are beginning to enter the cloud computing, and inventing new technology to view documents through the computer and through wireless devices. The major disruptive potential is that e-books is a relatively cheap industry to enter, new technology and integration or consolidation can easily sway consumers motivations and value perceptions, along with their buying situation. Google has recently established their plan to enter the eBook market, Google already has made available their 1.5 million public-domain books. Google has made these books available to read through Kindles immediate competitor the Sony reader. (Rich, 2009) Strengths and Weaknesses Docstoc strengths include; no initial cost of ownership and disposal, no switching costs, good embedding capability, strong professional following, and a strong alliance and backing from Amazon. Weaknesses include consumer concerns to safety and copyright issues, and a smaller readership than Scribd. Docstoc also has a smaller library and lacks in variety of literature compared to Scribd. Amazon digital books and publications strengths include innovative industry-leading technology, an easy-to-use device, easy access to e-books through their already established large ecommerce site, and the financial backing and infrastructure of Amazon. A weakness of Amazons Kindle is the start up cost for the reader, which includes the cost of a Kindle in addition to the price of eBooks. Amazon struggles to lower the cost of a Kindle device to the customer, due to the high cost of production. Competitive Benchmarks Best in Class Currently within the e-book industry, Amazon still manages to stay best in class regardless of Scribds effort to take their market share. Scribd needs to be come as innovative as Amazon Kindle in terms of products and services offered. To ensure competitiveness, Scribd needs to be improving their current products and services and searching for innovations that can make them best in class. Scribd is best in class in regards to reading a book on a computer; however, they need to adopt a technique that can allow the reading experience to become portable. Best in class companies are using the following strategies to maintain market leadership:

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Continually innovating to make the reading experience more interactive and exciting Responding to changes in customer behavior by changing both products and services offered Simplifying the uploading and downloading process for the reader and author Leveraging assets to produce the largest return for this website Managing books uploaded to reduce plagiarism

With regard to technology, Amazon and Scribd are best in class. Amazon has been able to produce a technology that allows the reader to read a book on a light and portable, high quality platform and create an interactive reading experience. They have set the benchmark for innovation and product line extension. Scribd is also leading in this category because of their technology platform, iPaper, which has allowed the uploading and downloading process to be much more user friendly. An e-book business has yet to compete with Scribds leading edge downloading capabilities. All of the current competitors are exceeding or improving on these best in class strategies; however, it is a race for who can accomplish these strategies first. These best in class strategies form the positioning of the product in the consumers minds. As more businesses are beginning to adopt e-books, it is important to constantly work to maintain best in class strategies. Competitive Gaps Scribd has managed to maintain three competitive gaps that set them apart from others. The first gap is their iPaper technology. This program has made it easier to download e-books than any other e-book website currently running. This technology has eliminated the need to download additional software programs that ultimately create inconvenience for the consumer. Consumers are now able to read a book online through any computer with the click of a button. It has increased the speed for downloading a book that far exceeds the speed of any competitor that only offers their book online via a computer. The second competitive gap Scribd maintains is their pricing strategy for books. Their flexible approach to pricing can allow better purchase prices. Their ability to offer a high percentage of revenue back to the authors has encouraged the authors to set lower prices than they normally would for customers. Scribd has managed to create a competitive price gap that others are having a hard time matching. This price reduction has lead to the increase of market share stemming from customers leaving competitors in search of a lower price. The last competitive gap Scribd maintains making their services open to the public. Amazon monitors who publishes on their site, and Docstoc monitors the subject of the work published on their website. Although both websites allow the public to download their works, Scribd maintains an advantage because they do not have any type of restrictions for authors and readers. They allow everyone to upload anything on the site as long as it is appropriate and not plagiarized. This decision to allow everyone to become an author has created the a unique and very beneficial buzz and popularity unmatched by their competitors. Their target markets are not restricted, and in return attract people from all over to their website. Conclusions Currently, Scribd stands very strong among its competitors. There have been few major entrants into the e-book industry which has helped Scribd maintain its competitiveness within the market. Scribds ability to provide innovative technology has stabilized their competitive position within the market. Scribd has taken advantage of the opportunities within the e-book industry by charging readers, and opening up the site to the public for everyone to upload their written works. Going forward, Scribd faces many factors that will affect competition. The first factor is technology. As competitors gain better knowledge about what the reader is looking for in a reading experience, companies who invest in leading technologies will ultimately meet their

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needs. Right now, Scribd stands ahead of competitors technologies, however, they need to continue to innovate, perhaps creating their own hardware solution such as the Kindle to stay a top tier competitor. Another factor Scribd also faces additional challenges, as others enter the e-book market. iTunes and Google will soon enter into this market, which means Scribd needs to be taking proactive steps to keep their customers from switching to industry giants. Google and iTunes have already established a very large customer base and have successfully implemented additional services that consumers have adopted. With the addition of companies to the e-book industry, Scribd must find ways to provide more to the customer so they can prevent them from switching to another competitor.

NET ASSESSMENT SWOT Analysis


Analysis of the market for which Scribd finds itself along with potential markets available for them to penetrate, we have come up with key issues that will need to be continually reviewed for Scribd to become successful and have longevity. This section provides further assessment of Scribd and their competition within the online publishing industry. To understand each aspect of the company and the industry, a SWOT analysis has been created. This allowed us to break down Scribds internal environment into which positive assets give the company strength over their competition and which assets provide disadvantages that need to be addressed. This exploration generates an overview of where Scribd currently resides in the market. This analysis also provides a focus on their external environment, which allows Scribd to understand what lies ahead in both potential opportunities and foreseen threats to protect against. By understanding market opportunities, Scribd can initiate penetration strategies to cash in on the financial and growth rewards new products or service potentials may provide. This also helps to minimize risk and allows Scribd to create strategies to deviate or eliminate them prior to becoming an important matter. Strengths One of Scribds major strengths stems from their technological innovation with the iPaper platform. This disruptive technology allowed them to enter the document file sharing market with an advantage over any of the big players in the industry. As a result Scribd has been able to establish market awareness and credibility. Another benefit their technology awards them is the ability to reach their market segment easily through worldwide distribution with multi-language capabilities. Any individual that has access to the Internet is able to receive the benefits that Scribd has to offer. As the Internet culture grows globally Scribds market potential will continue to increase. As the market grows the culture also has migrated towards a more I want it now mentality. This is beneficial to Scribd because it aligns with their current offerings. Scribds investment capital gives them strength over companies like Docstoc and new market entries by providing them with resources for R&D to continue to innovate. This also allows them an opportunity to compete with the market dominant players like Amazon. Other strengths include their ability to attract high profile publishers, which increases the value their consumers receive. The indexing and embedding technology also provides benefits to both their partners and customers. As the only company at the current period to have embedding capabilities, this gives Scribd strength to increase their market share while others work on matching their technology. Weaknesses

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Scribd is currently lacking an iPhone application. Though in the process of creation, the high volume of iPhone owners is a segment Scribd needs to reach along with the fact that it provides them with some form of reading platform to compete with Amazons Kindle. Though Scribds innovative technology has awarded them some brand awareness, Scribd has no solid brand equity and holds a very small percentage of the revenue-providing book selling market. Key companies that have established a brand and multiple streams of revenue that provide them with capital to improve their current offerings dominate this market. As Scribd attracts a greater amount of publishers and writers they will be able to increase their revenue drivers. In their current state they are limited in their potential to bring in substantial revenue gains without risking turning their consumers away with too many advertisements.

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Opportunities Scribds current technology advantage and culture offer them an opportunity to attract a large amount of publishers to help increase their revenue through purchases within their Scribd Store. Within the current consumer culture there is a growing segment of green believing consumers. This along with an economic push to become greener provides an opportunity for Scribd to reach a larger market. Smaller businesses and educational institutions may try to save on print and paper costs, while consumers move away from tangible publications to e-books and portable reading devices. To better reach this segment Scribd has decided to pay for distribution rights on Amazons Kindle devices. Scribd has an opportunity to produce a device to compete directly with the Kindle to pull share from Amazon and reduce another revenue stream for Amazon. By creating more value to the consumer with a mobile ability to read, Scribd would also improve motivation for partners and writers to publish their works. Through increasing partnerships, Scribd would have a greater opportunity to allocate revenue as well as decrease potential threats of competitors locking in key partnerships. As the growth of the Internet moves into new markets this would allow Scribd to have an increased number of credible resources and entertainment offerings to attract new consumers. As our service is an intangible platform with multi-language capabilities, the growth of the Internet is going to provide Scribd with a vast number of potential new consumers and partners. Threats One of the largest issues that threaten Scribds future success is their ability to protect their partners copyrights. If partners do not feel safe publishing their works on the site, Scribds business concept may fall apart. Their culture and vision align with allowing anyone and everyone to share their voice through print. Keeping individuals and companies secure with sharing is a major factor in growing their culture and following their vision. Another concern is the introduction of competitive disruptive technologies. The market Scribd launched into is a niche market surrounded by a highly competitive larger segment. The players in this segment have the resources for R&D to find ways to eliminate Scribds core competency of platform integration or introduce new products that provide target consumers with more value than is currently offered. They also have greater brand awareness and equity, which could be used to lock down contracts with key sources of value creation for consumers. To stay ahead of the cure with value driven product innovation Scribd has to increase profits and investments. If investors feel Scribds potential for success is low they may limit their funding, which would drive an increased focus on revenue, taking away from important R&D functions. This could coincide with the downward local and global economies, which may drive consumers to squeeze their notes and switch their buying behaviors away from the Scribd Store to free offerings. This could lower revenue, which along with smaller investments numbers may cause Scribd to have to sell off to an industry competitor.

Critical Factors
Scribds SWOT analysis shows that Scribd has room for improvement and areas where Scribd is strong. With the SWOT analysis completed, there are some areas of great opportunities and some areas where Scribd needs to take precautions to properly mitigate possible negative issues. These steps are outlined in this section, first the risk factors are analyzed and suggestions are made for mitigation. Second, the success factors will be analyzed. Risk Factors Upon completion of the SWOT analysis, it is clear that there are five major weaknesses/threats that present themselves as risk factors. The table below outlines the five aforementioned risk factors.

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In any business, having multiple revenue drivers is important. A businesses health is usually based on the amount/frequency of revenue that is coming into the business. A potential issue for Scribd is that their revenue comes in the form of sales from the Scribd store. Of the revenue generated, Scribd retains 20% of the sale of each document. To mitigate this, Scribd could create more revenue streams (e.g. in-text advertisements & website advertisements). With a new company, there is always a period of time where the new company has to work furtively to establish their brand awareness and build their brand equity. This is an area where Scribd can most definitely improve. Scribd has been established since March 2007 and has Amazon.com as a competitor, so its a market where theyre competing against a household name to be noticed. If Scribd can continue making their exclusive deals with publishers, they are making definite strides towards increasing brand awareness and building brand equity. With Amazon.com and Docstoc as the two major competitors, and others looming, Scribd is in a highly competitive market. Docstoc has a website that emulates Scribd with the exception of having a store element, as of July 2009, Docstoc has no online store selling documents. Amazon.com offers 300,000 books, as well as a dedicated e-book reader. Scribd has an advantage against each of these competitors, but as well could suffer from the advantages they dont have over the competitors. If Scribd can continue making exclusive deals with publishers and develop their technologies, they can maintain their competitiveness in this highly competitive market.

Critical Risk Factor Low number of revenue drivers

Description Scribd makes their money from publishers who sell their documents on the Scribd store. Scribd currently retains 20% of the sale price of each document. Scribd has been online since March 2007. With a competitor like Amazon.com, it is difficult to get Scribd established as a household name.

Mitigation Scribd could add in-text advertisements as well as advertisements on their website. This would be in an effort to increase the amount of revenue possible for Scribd. Scribd needs to continue signing exclusive deals with publishers and work to get their technology / content included in cross-branding efforts to expand brand awareness and brand equity. As mentioned above, Scribd needs to continue making deals and work to further their technologies to capture and maintain as much of the market as possible.

Minimal Market Brand Awareness & Brand Equity

Highly Competitive Market

Due to the relatively low barriers-toentry of e-book publishing and strong existing competition, Scribd is in the center of a very competitive market space. Scribd, while established, has a relatively small company and needs to be concerned about potential & current competitors developing superior products. Docstoc, Scribds most similar competitor, has technology that is almost exactly the same as what Scribd offers.

Quick Product Innovations

Scribd is a relatively small company and as a result can be nimble in their movements and evolve as the industry develops.

iPaper and Core Competencies Duplicated

Scribd is taking steps, the first being launching the Scribd store, in making duplication of their core competencies more difficult. Also, by adding value as they have, duplication of iPaper technology becomes less of a concern.

Table X-X Risk Factors Scribd

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Success Factors This growing company is in a prime state to strengthen their current value drivers and tap into the potential opportunities within the industry. With over $12 million in private funding the revenue streams are beginning to open up with the release of the Scribd store and signing of major publishers. (Crunchbase, Companies n.d.) The resources that are needed for success are present; Scribd must now find the most effective strategy to suit the needs of their customers and this growing industry. Ipaper technology currently leads the way in this industry with easy uploading and downloading, documents are converted to iPaper without having to change fonts, layout, or artwork. This feature intertwined with millions of people with the ability to freely go onto Scribd, and upload their own unique piece of work is what creates one of their biggest strengths, and truly sets them apart from industry leaders. The convenience element and quality in displaying the integrity of Scribd writers can be used as leverage against big time players such as Amazon. Ipaper in conjunction with embedding capabilities enables users to incorporate iPaper document viewer on their websites or blogs. This feature allows individuals to go onto websites with Scribd embeds and view them without having to leave the site. Viewers are able to see the documents the exact way publishers intended them to be seen. While other competitors like Docstoc have embedding options, the iPaper technology once again is what sets Scribd embeds apart from those that have similar features. The difference in embedding capabilities will be realized by both readers and writers alike. Publishers will look for a company that provides them the most effective way to display the integrity of their writing. Readers will enjoy the convenience of not having to leave a site to read embeds and the originality of the work can be seen through the iPaper technology. Another strength Scribd has over its current competitors is the pricing structure, and relationship with their publishers. With an 80/20 split in favor of the writers, and allowing for publishers to set their own price points and make real time changes, there are no other companies that compares with Scribd. (Scribd, About us n.d.) The company has a dedicated vision of sharing literature with the world with quality and convenience as the underlying themes. This is a vision that can be recognized by any publisher that encounters Scribd. This is also recognized when comparing sites with Amazon who often clutters the pages with product on top of product with an unfocused alignment in the needs and wants of a writer. To ensure future success and sustainable growth Scribd must take the necessary action to protect their iPaper and embedding capabilities. They must continue to stay technologically innovative branching out to all downloading platforms including the iPhone. The iPhone application will bring them one step closer in piloting a product that is similar to Amazons Kindle reader. This will enable them to decide if further research and development should be spent towards creating a Kindle like product. They must also take much more precaution in protecting the rights of their writers surrounding plagiarism and copyright issues. While new products, publishers, technology, and users expand in numbers, Scribd must maintain the easy-to-use website, clutter free atmosphere, and stay true to their belief in A writers dream, a readers paradise. Growth in publishing companies is inevitable, yet Scribd must find a healthy balance in maintaining good relations with current publishers while increasing brand equity and awareness by signing on the new. Scribd has everything it needs to create new revenue streams. With the ability to create alliances with newspapers, more publishers, businesses, and educational facilities revenue can be generated in establishing contracts and partnerships with all of these categories around the world. With 50 million unique hits every month, Scribd is just beginning to scratch the surfaces of their followings potential purchasing power. (Scribd, About us n.d.)

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Critical Success Factors Generate alternative revenue streams

Description To enable sustainable growth partnerships and alliances will create new revenue streams.

Mitigation Newspapers, businesses, and educational facilities are ready for Scribd to come knocking creating alternative outlets for readers that is fast, convenient, and affordable. Advertising pricing structure, ability for real-time changes, and the integrity in displaying publishing will attract more publishers. With the making of an iPhone application, Scribd will better understand how their product compares with Amazons Kindle reader. Advancements in iPaper technology and embedding capabilities will continue to set Scribd apart from the pack. Continuous growth in brand image can be achieved through strong communication of the service offerings and growth in more established authors. By maintaining an easy-to-use website, and keeping clean and professional look with uncluttered pages, Scribd will display their dedication to the written word.

Establish relationships with more big time publishers.

Big time publisher growth is imperative in generating revenue and establishing new customers. iPaper technology and embedding capabilities combined is what differentiates Scribd from their competitors.

Continue to be technology leaders in the industry

Growth in brand equity and awareness

Brand equity and awareness attract readers and writers alike.

Maintain focus surrounding the big idea during growth period

With new technology, product offerings, and published work, Scribd needs to channel in the direction of the company towards it vision of A writers dream, a readers paradise.

Table 6-2 Success Factors Scribd

Conclusions After reviewing and analyzing Scribds competitiveness within their market, we feel as though Scribd has a viable reason to move forward. Scribd is the provider of the most advanced social documentation distribution platform, still, this is an important time for Scribd to gain as much market share and awareness as possible. Their core competency will at some point become an industry-shared technology, so Scribd must create a large consumer base while focusing on adaptive and innovative ways to increase their current value offerings. As their consumer volume grows Scribd must follow their vision to promote their culture and enlarge create a loyal following. Their vision is clearly key to their big idea. The big idea was formed from their overall vision and represents the culture they serve. Scribd needs to stay true to this vision in order for them to benefit from a following of consumers that believe Scribd to be the best channel representing their desires and needs. Scribd has entered a market that represents a large number of potential consumers. Many new entrants and larger companies are trying to capture market share. The advancement of new technologies and a focus on their target markets key value drivers will keep Scribd ahead of these potential competitors. Scribd has built a presence over the Internet as a place where readers can buy books for a low price and where authors can upload their written works to share with the public. The marketing plan should move forward as Scribd has set the foundation for an already established customer base. This customer base is expanding rapidly as more people learn of the type of service Scribd offers. The expanding customer base shows that Scribd will be a reliable business for authors and readers. More companies will be inclined to work with Scribd as they become aware of the fact that number of hits the website receives daily is growing each month. Scribd should move forward because they offer a service that no other e-Book retailer can offer: a public website where anyone can upload written work. Scribd has caught the eye of all authors

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Robert Harmon 2008

Create Your Company's Value Proposition


Describe the unique value combinations of features, advantages, benefits, and price that are desired by your customers. Identify how the customer perceives the value of your offering vs. the value offered by key competitors. Considering your companys products and services, and the preceding value driver discussion, develop a statement to describe your companys customer value proposition. Our Unique Value
Features for the Scribd products and services include an easy-to-access and use website, and the iPaper reader technology, which provides multi-platform upload/download formats and viewers. The iPaper technology provides a unique advantage over key competitors. The benefits of these features include an simple publishing, searching, downloading and embedding of materials and faster purchasing. Another key benefit is the viewing experience the Scribd technology provides, which is equal to or better than those of key competitors. In addition, pricing strategy and revenue model for publishers selling through the Scribd store is can be perceived as a feature which benefits both publishers and consumers, as it improves access to more available works. It is also unique to Scribd, and therefore an advantage over key competitors. Consumers will value the simplicity and lesser cost of ordering from Scribd initially, as there are no hardware costs or shipping and handling costs.

Key Competitor Value


For DocStoc key features include an easyto-access and use website, and a technology platform through various APIs and Widgets that help in the sharing and promotion of documents. Neither their website nor their technology provide benefits that equal Scribd's. The benefits of their features are similar, but to a lesser degree. For Amazon, a key feature is the portable and well-designed hardware solution, the Kindle. Benefits unique to the Kindle are the read-to-me function and portable storage or library. Additionally, the Kindle provides a display that more closely simulates reading paper books than other technologies currently offered. The Amazon pricing strategy also benefits consumers, as product prices will most likely be lower than Scribd's. However, they may, in the long run, lose publishers to Scribd and others who provide a higher share in revenue. Volume sold will weigh heavily in this determination, as Amazon has the advantage of being well known and trusted. The Amazon products are only available for use with their hardware solution, the Kindle. Higher perceived price could inhibit consumers from using Amazon as their

Customer Value Drivers

20

Robert Harmon 2008

resource for buying digital written works.

Our Value Proposition

An innovative global resource where writers and publishers thrive, and readers share, learn and enjoy. -orWhere writers and publishers thrive, and readers share, learn and enjoy.

Customer Value Drivers

21

Internet-Savvy College Student Total Buyers Average Purchase Price Number of Units Purchased per Year Scribd's 80/20 Split Segment Potential Total % of TAM 2,554,738 $78 9 $16 $200,470,291 5%

The alternative Career-Oriented online Professional consumer 23,337,728 $24 14 $5 $563,606,131 43% 9,838,960 $14 10 $3 $135,285,700 18%

Other 18,136,080 $24 2 $5 $435,265,926 34%

Market Potential 53,867,506

$1,334,628,048 100%

*Growth Rate is 46% per Year for The alternative online consumer *Growth Rate is 1.38% per Year for the Internet-Savvy College Student *Growth Rate is 15% per Year for the Career-Oriented Professional

Assumptions TAM ASSESSMENT: Total Product Market 1 Internet Savvy College Students(Total USA TAM Potential-Units) 2 Growth Rate in Ebook Users 3 Total Ebook Users (Potential per year) 4 Current Average User Expenditure on Ebook (Estimate) 5 Annual Growth Rate in Users Spending on Ebook (% Price Change) 6 Forecast Average User Expenditure on Ebook (Price x 1 - 0.15) 7 Total USA Users Spending on Ebook (Total USA TAM in dollars) Market Share Assumptions for Scribds 8 Share of market estimate (Y0 initial share for Ebooks) 9 Annual change in market share [Change in share as f(new entries in market)] Fourt & Woodlock Diffusion Equation

Baseline Y0 2,554,738 12% 2,861,307 $ 78 12.40% $ 199,269,564 $ 2% -0.01% 88 $ 250,856,469 $ Y1

Forecast Y2 Y3

3,204,663

3,589,223

99 $ 315,798,191 $

111 397,552,027

1.99%

1.98%

1.97%

Qt = rq(1-r) t-1 Qt r q t
Increment in cumulative sales (ie. Sales at time "t") as fraction of potential sales Rate of penetration of untapped potential (a constant) Total potential sales as a fraction of all buyers Time period Forecast Model Annual SAM Estimates Time Period Incremental Sales 2.75% 1.24% 0.56% Cumulative Sales 2.75% 3.99% 4.54% Scribd Users Adoption 78,686 127,786 163,108 Internet Savvy College Students Scribd Spending Per User $ $ $ 88 99 111 Total Internet Savvy College Spending ($ mil) $ $ $ 6,898,553 12,592,453 18,066,255 Scribd Share Potential 1.99% $ 1.98% $ 1.97% $ Scribd Sales Forecast 137,281 249,331 355,905 55% 5%

Qt Qt Qt

1 2 3

File: Jason New Forcasting Model.xlsx - Internet-Savvy College Student

Assumptions TAM ASSESSMENT: Total Product Market 1 Alternative Online Consumer (Total USA TAM Potential-Units) 2 Growth Rate in Ebook Users 3 Total Ebook Users (Potential per year) 4 Current Average User Expenditure on Ebook (Estimate) 5 Annual Growth Rate in Users Spending on Ebook (% Price Change) 6 Forecast Average User Expenditure on Ebook (Price x 1 - 0.15) 7 Total USA Users Spending on Ebook (Total USA TAM in dollars) Market Share Assumptions for Scribds 8 Share of market estimate (Y 0 initial share for Ebooks) 9 Annual change in market share [Change in share as f(new entries in market)] Fourt & Woodlock Diffusion Equation

Baseline Y0 23,337,728 30% 30,339,046 $ 14 2.00% 320,893,760 25% -0.01% $ $ 14 425,505,126 $ $ Y1

Forecast Y2 Y3

39,440,760

51,272,988

14 564,219,797

$ $

15 748,155,451

24.99%

24.98%

24.97%

Qt = rq(1-r) t-1 Qt r q t
Increment in cumulative sales (ie. Sales at time "t") as fraction of potential sales Rate of penetration of untapped potential (a constant) Total potential sales as a fraction of all buyers Time period Forecast Model Annual SAM Estimates Time Period Incremental Sales 23.65% 10.64% 4.79% Cumulative Sales 23.65% 34.29% 39.08% Scribd Users Adoption 7,175,184 13,525,223 20,038,317 Alternative Online Consumer Scribd Spending Per User $ $ $ 14 14 15 Total Alternative Online Consumer Spending ($ mil) $ $ $ 100,631,962 193,485,074 292,391,308 Scribd Share Potential 24.99% $ 24.98% $ 24.97% $ Scribd Sales Forecast 25,147,927 48,332,571 73,010,110 55% 43%

Qt Qt Qt

1 2 3

File: Jason New Forcasting Model.xlsx - Conscientious Alternative

Assumptions TAM ASSESSMENT: Total Product Market 1 Career-Oriented Professional (Total USA TAM Potential-Units) 2 Growth Rate in Ebook Users 3 Total Ebook Users (Potential per year) 4 Current Average User Expenditure on Ebook (Estimate) 5 Annual Growth Rate in Users Spending on Ebook (% Price Change) 6 Forecast Average User Expenditure on Ebook (Price x 1 - 0.15) 7 Total USA Users Spending on Ebook (Total USA TAM in dollars) Market Share Assumptions for Scribds 8 Share of market estimate (Y0 initial share for Ebooks) 9 Annual change in market share [Change in share as f(new entries in market)] Fourt & Woodlock Diffusion Equation

Baseline Y0 9,838,960 15% 11,314,804 $ 24 2.00% $ 237,610,884 $ 10% -0.01% 25 $ 278,717,567 $ Y1

Forecast Y2 Y3

13,012,025

14,963,828

25 $ 326,935,706 $

26 383,495,583

9.99%

9.98%

9.97%

Qt = rq(1-r) t-1 Qt r q t
Increment in cumulative sales (ie. Sales at time "t") as fraction of potential sales Rate of penetration of untapped potential (a constant) Total potential sales as a fraction of all buyers Time period Forecast Model Annual SAM Estimates Time Period Incremental Sales Cumulative Sales Scribd Users Adoption 1,120,166 1,867,876 2,448,045

Career-Oriented

55% 18%

Career-Oriented Professional Scribd Spending Per User $ $ $ 25 25 26 Total CareerOriented Professional Spending ($ mil) $ $ $ 27,593,039 46,931,621 62,738,919 Scribd Share Potential 9.99% $ 9.98% $ 9.97% $ Scribd Sales Forecast 2,756,545 4,683,776 6,255,070

Qt Qt Qt

1 2 3

9.90% 4.46% 2.00%

9.90% 14.36% 16.36%

File: Jason New Forcasting Model.xlsx - Career-Oriented

3 Year Forcast for Scribd


Internet-Savvy College Student The alternative online consumer Career-Oriented Professional

$73,010,110

$48,332,571 $25,147,927
$6,255,070

$4,683,776

$2,756,545

$137,281 2009

$249,331

$355,905

2010

2011

Segment Attractiveness

10 9 8 7 Rating 6 5 4 3 2 1 0
F1 F2 F3 A1 A2 A3 B1 B2 B3
Student Reader Online Consumer Business Reader

SAFs

Segment Attractiveness Factor (SAF) Key Product Features F1 F2 F3 Key Product Advantages A1 A2 A3 Key Product Benefits B1 B2 B3 Key CVDs Economic Performance Supplier Buyer Motivations & Goals Situational

Segment A Post-secondary student readers

Segment B Leisure Readers

Segment C Business Readers iPaper multi-platform uploads/downloads Embedding capability File storage and indexing

Easy-to-use website Website layout/functionality iPaper multi-platform uploads/downloads Reading experience Online social network iPaper multi-platform uploads/downloads

Paper reading platform Paper reading platform iPaper multi-platform uploads/downloads iPaper multi-platform uploads/downloads Online social network Online social network

Paper reading platform Paper reading platform File storage and indexing

Quick and free global access More pleasurable viewing/reading Document integrity

More pleasurable viewing/reading Multi-platform portable access Social community

Document integrity Privacy (?) Multi-platform portable access

Delivered initial cost Price sensitivity Website efficiency Best reading experience (feature set) Best vision for writers and readers Best publicatons/publisher partners Easy to purchase Quality material at low price y Easy to search Flexibility

Delivered initial cost Price sensitivity Multiple platform capabilities Best reading experience (feature set) Best vision for writers and readers Best publicatons/publisher partners Customer database preferences Best price y Easy to search Easy to purchase

Price sensitivity Switching costs Best availability of publications Best reading experience (feature set) Best vision for writers and readers Credibility and stability. Flexibility Availability y Easy to search Easy to purchase

Other Factors Segment Size Growth Rate Market Access Market Size Market Growth Market Potential Competitor Intensity Number of Companies Substitutes Propensity to purchase e-books

65,000,000 Medium Medium 12% per year High

Medium

High

Low to medium

Medium High

Medium Low

Medium High

***EXAMPLE*** Linked to SAF Chart in Sheet 3 F1 Student Reader Online Consumer Business Reader 8 8 8.5 F2 8.25 10 8 F3 6 2.5 6.5 A1 8 6.5 3.5 A2 9.5 4 8.25 A3 4 8 4.5 B1 8.5 9 9.5 B2 4.75 4.75 9.5 B3 4 4.5 4.5

Factor Weight Student Online Consumer Business Reader

0.17 1.36 1.36 1.4

0.2 1.65 2 1.6

Weighted Averages 0.06 0.07 0.36 0.15 0.4 0.56 0.455 0.2

0.08 0.76 0.32 0.7

0.06 0.24 0.48 0.3

0.2 1.7 1.8 1.9

0.13 0.6175 0.6175 1.2

0.05 0.2 0.225 0.2

1.000 Wtd Avg 7.448 0 7.408 0.0 7.970

***EXAMPLE*** Linked to SAF Chart in Sheet 3 CVD 1 10 9.5 6.5 CVD 2 8 6.5 6.5 CVD 3 6.5 9.5 8 CVD 4 6.25 8.5 6.25 CVD 5 3 7 4.25 CVD 6 9 8.5 10 CVD 7 6.5 6.75 7 CVD 8 8.5 8 6.5 CVD 9 CVD 10 6.75 6.5 8 8 7.5 4.75

Student Readers Online Consumer Business Reader

Factor Weight Segment A Segment B Segment C

0.17 1.7 1.615 1.1

0.1 0.8 0.65 0.7

Weighted Averages 0.14 0.13 0.91 1.33 1.1 0.8125 1.105 0.8

0.04 0.12 0.28 0.2

0.17 1.53 1.445 1.7

0.02 0.13 0.135 0.1

0.12 1.02 0.96 0.8

0.1 0.675 0.8 0.8

1.000 Wtd Avg 0.13 7.828 0.16 8.480 0.1 7.323

0.02

Segment Attractiveness Factor (SAF) Key Product Features F1 F2 F3 Key Product Advantages A1 A2 A3 Key Product Benefits B1 B2 B3 Key CVDs Economic Performance Supplier Buyer Motivations & Goals Situational

Segment A Post-secondary student readers

Segment B Leisure Readers

Segment C Business Readers iPaper multi-platform uploads/downloads Embedding capability File storage and indexing

Easy-to-use website Website layout/functionality iPaper multi-platform uploads/downloads Reading experience Online social network iPaper multi-platform uploads/downloads

Paper reading platform Paper reading platform iPaper multi-platform uploads/downloads iPaper multi-platform uploads/downloads Online social network Online social network

Paper reading platform Paper reading platform File storage and indexing

Quick and free global access More pleasurable viewing/reading Document integrity

More pleasurable viewing/reading Multi-platform portable access Social community

Document integrity Privacy (?) Multi-platform portable access

Delivered initial cost Price sensitivity Website efficiency Best reading experience (feature set) Best vision for writers and readers Best publicatons/publisher partners Easy to purchase Quality material at low price y Easy to search Flexibility

Delivered initial cost Price sensitivity Multiple platform capabilities Best reading experience (feature set) Best vision for writers and readers Best publicatons/publisher partners Customer database preferences Best price y Easy to search Easy to purchase

Price sensitivity Switching costs Best availability of publications Best reading experience (feature set) Best vision for writers and readers Credibility and stability. Flexibility Availability y Easy to search Easy to purchase

Other Factors Segment Size Growth Rate Market Access Market Size Market Growth Market Potential Competitor Intensity Number of Companies Substitutes Propensity to purchase e-books

18,248,128 10% Medium Medium

10,639,652 13% 12% per year High

50,000,000

Medium

High

Low to medium

Medium High

Medium Low

Medium High

Segment Attractiveness

10 9 8 7 Rating 6 5 4 3 2 1 0
CVD 1 CVD 2 CVD 3 CVD 4 CVD 5 CVD 6 CVD 7 CVD 8 CVD 9 CVD 10
Student Readers Online Consumer Business Reader

SAFs

NET ASSESSMENT
The marketing net assessment is the compilation of the totality of the marketing opportunity assessment. The analysis of the market for which Scribd finds itself along with potential markets available for them to penetrate, we have come up with key issues that will need to be continually reviewed for Scribd to become successful and have longevity. With an unmatched file sharing platform, Scribd has the foundation laid to become an industry leader in the online document sharing industry as more viewers contine to visit their site. This section provides further assessment of Scribd and their competition within the online publishing industry. To understand each aspect of the company and industry, a SWOT analysis has been created. A SWOT analysis is the summary of all the situational forces that provide current and future strenghts, weaknesses, opportunities, and threats that have been uncovered in the previous sections. (Best, 2007) This allowed us to break down Scribds internal environment into which positive assets give the company strength over their competition and which resources provide disadvantages that need to be addressed. This exploration generates an overview of where Scribd currently resides in the market. This analysis also provides a focus on their external environment, which allows Scribd to understand what lies ahead in both potential opportunities and foreseen threats to protect against. By understanding market opportunities, Scribd can initiate penetration strategies to cash in on the financial and growth rewards new products or service potentials may provide. This also helps to minimize risk and allows Scribd to create strategies to deviate or eliminate them prior to becoming an important matter.

SWOT Analysis
Strengths One of Scribds major strengths stems from their technological innovation with the iPaper platform. This disruptive technology allowed them to enter the document file sharing market with an advantage over any of the big players in the industry. As a result Scribd has been able to establish market awareness and credibility. Another benefit their technology awards them is the ability to reach their market segment easily through worldwide distribution with multi-language capabilities. Any individual that has access to the Internet is able to receive the benefits that Scribd has to offer. As the Internet culture grows globally Scribds market potential will continue to increase. As the market grows the culture also has migrated towards a more I want it now mentality. This is beneficial to Scribd because it aligns with their current offerings. Scribds investment capital gives them strength over companies like Docstoc and new market entries by providing them with resources for R&D to continue to innovate. This also allows them an opportunity to compete with the market dominant players like Amazon. Other strengths include their ability to attract high profile publishers, which increases the value their consumers receive. The indexing and embedding technology also provides benefits to both their partners and customers. As the only company at the current period to have embedding capabilities, this gives Scribd strength to increase their market share while others work on matching their technology. Weaknesses Scribd is currently lacking an iPhone application. Though in the process of creation, the high volume of iPhone owners is a segment Scribd needs to reach along with the fact that it provides them with some form of reading platform to compete with Amazons Kindle. Though Scribds innovative technology has awarded them some brand awareness, Scribd has no solid brand equity and holds a very small percentage of the revenue-providing book selling market. Key

companies that have established a brand and multiple streams of revenue that provide them with capital to improve their current offerings dominate this market. As Scribd attracts a greater amount of publishers and writers they will be able to increase their revenue drivers. In their current state they are limited in their potential to bring in substantial revenue gains without risking turning their consumers away with too many advertisements. Opportunities Scribds current technology advantage and culture offer them an opportunity to attract a large amount of publishers to help increase their revenue through purchases within their Scribd Store. Within the current consumer culture there is a growing segment of green believing consumers. This along with an economic push to become greener provides an opportunity for Scribd to reach a larger market. Smaller businesses and educational institutions may try to save on print and paper costs, while consumers move away from tangible publications to e-books and portable reading devices. To better reach this segment Scribd has decided to pay for distribution rights on Amazons Kindle devices. Scribd has an opportunity to produce a device to compete directly with the Kindle to pull share from Amazon and reduce another revenue stream for Amazon. By creating more value to the consumer with a mobile ability to read, Scribd would also improve motivation for partners and writers to publish their works. Through increasing partnerships, Scribd would have a greater opportunity to allocate revenue as well as decrease potential threats of competitors locking in key partnerships. As the growth of the Internet moves into new markets this would allow Scribd to have an increased number of credible resources and entertainment offerings to attract new consumers. As our service is an intangible platform with multi-language capabilities, the growth of the Internet is going to provide Scribd with a vast number of potential new consumers and partners. Threats One of the largest issues that threaten Scribds future success is their ability to protect their partners copyrights. If partners do not feel safe publishing their works on the site, Scribds business concept may fall apart. Their culture and vision align with allowing anyone and everyone to share their voice through print. Keeping individuals and companies secure with sharing is a major factor in growing their culture and following their vision. Another concern is the introduction of competitive disruptive technologies. The market Scribd launched into is a niche market surrounded by a highly competitive larger segment. The players in this segment have the resources for R&D to find ways to eliminate Scribds core competency of platform integration or introduce new products that provide target consumers with more value than is currently offered. They also have greater brand awareness and equity, which could be used to lock down contracts with key sources of value creation for consumers. To stay ahead of the cure with value driven product innovation Scribd has to increase profits and investments. If investors feel Scribds potential for success is low they may limit their funding, which would drive an increased focus on revenue, taking away from important R&D functions. This could coincide with the downward local and global economies, which may drive consumers to squeeze their notes and switch their buying behaviors away from the Scribd Store to free offerings. This could lower revenue, which along with smaller investments numbers may cause Scribd to have to sell off to an industry competitor.

Critical Factors
Scribds SWOT analysis shows that Scribd has room for improvement and areas where Scribd is strong. With the SWOT analysis completed, there are some areas of great opportunities and some areas where Scribd needs to take precautions to properly mitigate possible negative issues. These steps are outlined in this section, first the risk factors are analyzed and suggestions are made for mitigation. Second, the success factors will be analyzed.

Risk Factors Upon completion of the SWOT analysis, it is clear that there are five major weaknesses/threats that present themselves as risk factors. The table below outlines the five aforementioned risk factors. In any business, having multiple revenue drivers is important. A businesses health is usually based on the amount/frequency of revenue that is coming into the business. A potential issue for Scribd is that their revenue comes in the form of sales from the Scribd store. Of the revenue generated, Scribd retains 20% of the sale of each document. To mitigate this, Scribd could create more revenue streams (e.g. in-text advertisements & website advertisements). With a new company, there is always a period of time where the new company has to work furtively to establish their brand awareness and build their brand equity. This is an area where Scribd can most definitely improve. Scribd has been established since March 2007 and has Amazon.com as a competitor, so its a market where theyre competing against a household name to be noticed. If Scribd can continue making their exclusive deals with publishers, they are making definite strides towards increasing brand awareness and building brand equity. With Amazon.com and Docstoc as the two major competitors, and others looming, Scribd is in a highly competitive market. Docstoc has a website that emulates Scribd with the exception of having a store element, as of July 2009, Docstoc has no online store selling documents. Amazon.com offers 300,000 books, as well as a dedicated e-book reader. Scribd has an advantage against each of these competitors, but as well could suffer from the advantages they dont have over the competitors. If Scribd can continue making exclusive deals with publishers and develop their technologies, they can maintain their competitiveness in this highly competitive market.

Critical Risk Factor Low number of revenue drivers

Description Scribd makes their money from publishers who sell their documents on the Scribd store. Scribd currently retains 20% of the sale price of each document. Scribd has been online since March 2007. With a competitor like Amazon.com, it is difficult to get Scribd established as a household name.

Mitigation Scribd could add in-text advertisements as well as advertisements on their website. This would be in an effort to increase the amount of revenue possible for Scribd. Scribd needs to continue signing exclusive deals with publishers and work to get their technology / content included in cross-branding efforts to expand brand awareness and brand equity. As mentioned above, Scribd needs to continue making deals and work to further their technologies to capture and maintain as much of the market as possible.

Minimal Market Brand Awareness & Brand Equity

Highly Competitive Market

Due to the relatively low barriers-toentry of e-book publishing and strong existing competition, Scribd is in the center of a very competitive market space. Scribd, while established, has a relatively small company and needs to be concerned about potential & current competitors developing superior products.

Quick Product Innovations

Scribd is a relatively small company and as a result can be nimble in their movements and evolve as the industry develops.

iPaper and Core Competencies Duplicated

Docstoc, Scribds most similar competitor, has technology that is almost exactly the same as what Scribd offers.

Scribd is taking steps, the first being launching the Scribd store, in making duplication of their core competencies more difficult. Also, by adding value as they have, duplication of iPaper technology becomes less of a concern.

Table X-X Risk Factors Scribd

Success Factors This growing company is in a prime state to strengthen their current value drivers and tap into the potential opportunities within the industry. With over $12 million in private funding the revenue streams are beginning to open up with the release of the Scribd store and signing of major publishers. (Crunchbase, Companies n.d.) The resources that are needed for success are present; Scribd must now find the most effective strategy to suit the needs of their customers and this growing industry. Ipaper technology currently leads the way in this industry with easy uploading and downloading, documents are converted to iPaper without having to change fonts, layout, or artwork. This feature intertwined with millions of people with the ability to freely go onto Scribd, and upload their own unique piece of work is what creates one of their biggest strengths, and truly sets them apart from industry leaders. The convenience element and quality in displaying the integrity of Scribd writers can be used as leverage against big time players such as Amazon. Ipaper in conjunction with embedding capabilities enables users to incorporate iPaper document viewer on their websites or blogs. This feature allows individuals to go onto websites with Scribd embeds and view them without having to leave the site. Viewers are able to see the documents the exact way publishers intended them to be seen. While other competitors like Docstoc have embedding options, the iPaper technology once again is what sets Scribd embeds apart from those that have similar features. The difference in embedding capabilities will be realized by both readers and writers alike. Publishers will look for a company that provides them the most effective way to display the integrity of their writing. Readers will enjoy the convenience of not having to leave a site to read embeds and the originality of the work can be seen through the iPaper technology. Another strength Scribd has over its current competitors is the pricing structure, and relationship with their publishers. With an 80/20 split in favor of the writers, and allowing for publishers to set their own price points and make real time changes, there are no other companies that compares with Scribd. (Scribd, About us n.d.) The company has a dedicated vision of sharing literature with the world with quality and convenience as the underlying themes. This is a vision that can be recognized by any publisher that encounters Scribd. This is also recognized when comparing sites with Amazon who often clutters the pages with product on top of product with an unfocused alignment in the needs and wants of a writer. To ensure future success and sustainable growth Scribd must take the necessary action to protect their iPaper and embedding capabilities. They must continue to stay technologically innovative branching out to all downloading platforms including the iPhone. The iPhone application will bring them one step closer in piloting a product that is similar to Amazons Kindle reader. This will enable them to decide if further research and development should be spent towards creating a Kindle like product. They must also take much more precaution in protecting the rights of their writers surrounding plagiarism and copyright issues. While new products, publishers, technology, and users expand in numbers, Scribd must maintain the easy-to-use website, clutter free atmosphere, and stay true to their belief in A writers dream, a readers paradise. Growth in publishing companies is inevitable, yet Scribd must find a healthy balance in maintaining good relations with current publishers while increasing brand equity and awareness by signing on the new. Scribd has everything it needs to create new revenue streams. With the ability to create alliances with newspapers, more publishers, businesses, and educational facilities revenue can be generated in establishing contracts and partnerships with all of these categories around the world. With 50 million unique hits every month, Scribd is just beginning to scratch the surfaces of their followings potential purchasing power. (Scribd, About us n.d.)

Critical Success Factors Generate alternative revenue streams

Description To enable sustainable growth partnerships and alliances will create new revenue streams.

Mitigation Newspapers, businesses, and educational facilities are ready for Scribd to come knocking creating alternative outlets for readers that is fast, convenient, and affordable. Advertising pricing structure, ability for real-time changes, and the integrity in displaying publishing will attract more publishers. With the making of an iPhone application, Scribd will better understand how their product compares with Amazons Kindle reader. Advancements in iPaper technology and embedding capabilities will continue to set Scribd apart from the pack. Continuous growth in brand image can be achieved through strong communication of the service offerings and growth in more established authors. By maintaining an easy-to-use website, and keeping clean and professional look with uncluttered pages, Scribd will display their dedication to the written word.

Establish relationships with more big time publishers.

Big time publisher growth is imperative in generating revenue and establishing new customers. iPaper technology and embedding capabilities combined is what differentiates Scribd from their competitors.

Continue to be technology leaders in the industry

Growth in brand equity and awareness

Brand equity and awareness attract readers and writers alike.

Maintain focus surrounding the big idea during growth period

With new technology, product offerings, and published work, Scribd needs to channel in the direction of the company towards it vision of A writers dream, a readers paradise.

Table 6-2 Success Factors Scribd

Conclusion After reviewing and analyzing Scribds competitiveness within their market, we feel as though Scribd has a viable reason to move forward. Scribd is the provider of the most advanced social documentation distribution platform. (------------) Still, this is an important time for Scribd to gain as much market share and awareness as possible. Their core competency will at some point become an industry-shared technology, so Scribd must create a large consumer base while focusing on adaptive and innovative ways to increase their current value offerings. As their consumer volume grows, Scribd must follow their vision to promote their culture to create a loyal following. The big idea was formed from their overall vision and represents the culture they serve. Scribd needs to stay true to this vision in order for them to benefit from a following of consumers that believe Scribd to be the best channel representing their desires and needs. Scribd has entered a market that represents a large number of potential consumers. Through our analysis the most attractive segment is the conscientious alternative reader that represents 35,785,516 of consumers with a monetary potential of $2,449,807,960. Many new entrants and larger companies are trying to capture market share. These include Scribds current competitors Amazon and Docstoc, along with the potential clash with high tech leaders Apple and Google. (Hoovers, 2009) The advancement of new technologies and a focus on their target markets key

value drivers will keep Scribd ahead of these potential competitors. Scribd must work on creating strong industry barriers to duffer further competition and provide them with further advantage to their current competitors. Scribd has built a presence over the Internet as a place where readers can buy books for a low price and where authors can upload their written works to share with the public. (CrunchBase) We believe the marketing plan should move forward as Scribd has set the foundation for an already established customer base. This customer base is expanding rapidly as more people learn of the type of service Scribd offers. The expanding customer base shows that Scribd will be a reliable business for authors and readers. More companies will be inclined to work with Scribd as they become aware of the fact that number of hits the website receives daily is growing each month while current at 50 million unique visitors every month. (Scribd) Scribd should also move forward because they offer a service that no other e-book retailer can offer: a public website where anyone can upload written work. (YouNoodle, 2009) Scribd has caught the eye of all authors because they give them an opportunity that no other book retailer has ever given before. Although Docstoc allows authors to upload written books, authors are still limited to only business and educational writings. Scribd, on the other hand, allows anyone to upload everything, which gives them a competitive advantage in customers value perception. Scribd offers something special to readers and authors. The business model Scribd uses has allowed the company to provide authors and publishers with the control over pricing awarding them with more formed partnerships. Currently major partnerships with Simon and Schuster, Harvard, and others has boosted brand identity and awareness as well as given Scribd free public relations and brand association. (Scribd) Scribd is able to share a large percentage of profits with the author or publisher, which keeps the supply of written work flowing in. Scribd is offering a better deal for authors than any other competitor and still maintains a growing profit. The marketing plan should move forward because the relationship that is built between Scribd, individual authors, and publishers will only get stronger as Scribd continues to offer the best service available. Scribd is building relationships with publishers that will secure future written works on their website. Authors that use the site will grow, which will result in a larger readership for Scribd. Scribd has proven they have the potential to enhance technology, increase readership, and secure relationships with authors. This marketing plan should move forward as it becomes evident that Scribd has all of the right tools to compete heavily with current and future competitors. When new entrants move into the digital publication industry, Scribd will already have a loyal customer base, unique technology, and a solid partnership base of authors and publishers.

because they give them an opportunity that no other book retailer has ever given before. Although Docstoc allows authors to upload written books, authors are still limited to only business and educational writings. Scribd, on the other hand, allows anyone to upload anything, which gives them a competitive advantage. Scribd offers something special to readers and authors. The business model Scribd uses has allowed the company to set lower prices than any other competititor in the industry. Scribd is able to share a large percentage of profits with the author or publisher, which keeps the supply of written work flowing in. Scribd is offering a better deal for authors than any other competitor and still maintains a growing profit. The marketing plan should move forward because the relationship that is built between Scribd, individual authors, and publishers will only get stronger as Scribd continues to offer the best service available. Scribd is building relationships with publishers that will secure future written works on their website. Authors that use the site will grow, which will result in a larger readership for Scribd. Scribd has proven they have the potential to enhance technology, increase readership, and secure relationships with authors. This marketing plan should move forward as it becomes evident that Scribd has all of the right tools to compete heavily with current and future competitors. When new entrants move into the digital publication industry, Scribd will already have a loyal customer base, unique technology, and a solid partnership base of authors and publishers.

51

Red Team/Blue Team Taking out our competition: Amazon Continue to attract key publishers with a more beneficial partnership agreement Offer publishers 95 percent revenue share for no distribution through Amazon Always have the most innovative platform for file conversion and viewing potential Secure contracts with educational publishers to become the number one spot for universities and others to find books and related materials Send in head hunters to try to hire upper level executives to gain insight on Amazons short term strategy Produce own mobile reading device that is more user friendly and aesthetically attractive than the Kindle and offer it to consumers for free Partner with Google to become a more financially structured business and use this advantage to take them out Branch into or partner with Flicr to offer photo online storage for users and photographers Highly advertise in developing markets to build brand equity before Amazon or competitors Enhance cryptic technology and offer document storage and transfers for Government agencies around the world in exchange for future contract or business solutions With mobile units in place, get newspapers to join with high revenue share and flexibility for contracts that involve no distribution through Amazon Hack into sprints network and disrupt Internet capabilities Hack into Amazons network and disrupt website and transaction capabilities

Taking out our company: Scribd Run ads that highlight inefficiency of reading on-screen with Scribd (side by side with Kindle. How do you want to read?) Lower price of Kindle permanently or lower price significantly for a period of time. (make the Kindle $150 for 2 weeks to convert any potential consumers that want the Kindle, but dont want to pay the upfront costs) Offer Kindle at zero up-front cost, but with a monthly subscription cost. (e.g. $15/month that can be put towards any book purchases) Recruit and hire the lead engineers from Scribd. Develop an inline flash-based reader for all Kindle books. Build a duplicate site like Scribd. Offer 100% of revenue to publishers and use in-site advertising to offset operating costs. Increase the payment to publishers for electronic documents to nothing lower than an 85% revenue share with publishers, we currently offer a 35% share of prices we set. Allow customers to name the price at which their works will sell, we dont currently. Establish a rule that publishers either publish electronically and traditionally through Amazon, or not at all. All or nothing. FINALLY launch the Kindle worldwide with support for all countries. Acquire DocStoc and use their existing tech and engineers to decrease other competition and integrate their technology. Setup a free section where users who dont care to create revenue can upload their works for sharing. Ban Scribd from utilizing the Amazon S3 cloud storage service that we offer. This effectively forces them to pay higher rates for storage that is expanding monthly.

Market Leadership
This section will look at the market leadership model consisting of five different metrics. The model looks to differentiate a companys position in the industry, making them difficult to replicate by competitors. A company must excel in all areas to be successful player among the competition, yet specialize in specific metrics in order to differentiate the value being created. The Scribd team will evaluate the core competencies that contribute to each attribute positioning the company in the most effective manner. The five metrics include: 1. Knowledge This multidimensional metric can focus on knowledge within the company between employees, and knowledge shared and co-created with customers. The development of sharing of knowledge increases value in your product or service. 2. Innovation This metric devotes a commitment to R & D in creating new markets and technology. Innovation is developed in three different ways including Demand Pull where marketers encourage engineers to create products tailored towards high opportunity market, Technology Push, where engineers create technological breakthroughs that have potential in the market, and Integrated Approach, where engineers and marketers co-create technology with the market in mind. The innovation metric increases customer value by enhancing the products, processes, and people. 3. Time This metric creates value by keeping in mind that the element of time is a product attribute. By creating the most efficient systems, a company can strengthen value-in-use. In cutting down delivery processes it will ultimately decrease cost and increase benefits by giving back the customer their time. Speed is a vital characteristic of time that can create opportunity maximization. 4. Customer Intimacy In this category intangible benefits play a large role in creating value. It also aims to incorporate the customization of unique individual customers, and allowing them to participate in determining what is valuable in the end product. A heavy emphasis is put onto a company being able to sense and respond, making proactive decisions and leading the industry in customer service. 5. Operational Excellence This metric focuses on the people within the company as the core assets. Every operation is team based and value is created by tapping into new markets with existing assets. At the same time, companies must continually enhance product designs, materials, and processes to achieve the most efficient overall cost (Harmon, Lecture Five, 2009).

This Radar Chart demonstrates the key metrics that Scribd will focus on in differentiating themselves from competitors. It also illustrates the utilization of core competencies in Innovation and Customer Intimacy, enabling enhanced value in the overall Scribd service.

Figure 7-10 Scribd Radar Chart


Source: Harmon, Lecture 5, 2009 Source: Scribd Team Consensus Scribd possesses well-rounded attributes in meeting the needs of each dimension of the Radar Chart. Yet they have really pushed the envelope in terms of product and service innovation. Their ability to bring innovative value driven products to existing and new markets is what truly differentiates them from competitors. The introduction of iPaper technology set their foot through the door to compete with a company like Amazon, and the introduction of their service concept in tune with the needs of consumers is what sets them apart. The Scribd marketing team has worked alongside engineers to develop technology and services that cater to the needs of the market, in achieving integrated innovation (Harmon, Lecture Five, 2009). The potential for expanding into global markets, and the addition of audio and video embedding capabilities on the newly co-branded Scribd reader will reinvent the industry. The addition of instant translation in hundreds of languages will bring them one step closer to creating foreign media publication alliances. With a deeper understanding of their audience, the co-creation of value-in-use with Scribd consumers, and a service that incorporates a small piece of each competitor, Scribds innovation process is performing on an enhanced, blue ocean driven scale. Another strong performance metric is Scribds Customer Intimacy. The reason they are able to excel in this category in comparison with competitors is because they truly allow their customers to participate in the value creation process. Scribd audiences are not just individuals consuming a service instead they are the service. They are the readers, the writers, the social network, and the voice behind what Scribd has become, and where they would like it to go. If Harvard University wants to digitize 1,000 books on the Scribd website, then they can. They will become a part of the value creating process and begin their own social network of users, and make changes whenever they would like. Scribds ability to sense and respond is spot on, and they are merely a facilitator of Scribd users, specializing in customer service (Harmon, Lecture Five, 2009).

Pricing Plan

Pricing Objectives

The table below establishes the pricing dynamic of Scribd in their market by identifying key performance indicators. This table will help determine the pricing plan objectives, as well as select a pricing method.

Penetration
Low Substitutes High Easy Gradual Low Low

Market Situation
Level of Desire For The Product/Service Distinctiveness From Competitive Offerings Importance of Price In the Value Equation Ease of Duplicating The Competitive Advantage Speed of return on Investment Importance of Innovation Importance of Personal Selling

Skimming
High Distinctive Low Difficult Fast High High

Table 7.5-1 Pricing Dynamics (Harmon, 2009)

Level of Desire for the Product/Service Cloud computing and social publishing networks have become very competitive markets, and many people are looking for a place to store and

publish their work. Scribd has the worlds largest readership for a social publishing networks with around 60 million readers each month. (Scribd.com, 2009)

Distinctiveness from Competitive Offerings Scribds innovative technology is distinctive from its competitors, but their offerings are similar to many of their competitors. This is why Scribd fits under both categories of substitutes and distinctive. Although Scribd has industry leading technology, it is easy for competitors to convert their software to compete. Scribd has been named in the top fifty best technology startups by Business Week and Younoodle; due to their distinctive publisher partnerships and rapid growth. (Ricadela, 2009 )

Importance of Price in the Value Equation Being a web-based company means that the consumers have Scribds competitors prices at their fingertips. Amazon in particular has extremely competitive prices on e-books. Although Scribd may not be the low price leader, they are helping writers and publishers cash in. Many displaced authors or journalists are turning to make profit is Scribed, which invites journalists to publish their work, reach new audiences and potentially profit from stories that cash-strapped news organizations might not have the resources to publish. (Tenor, 2009)

Ease of Duplicating the Competitive Advantage New and improved technology is constantly being innovated. Advanced technology such as iPaper, and enhanced embedding capabilities is what currently gives Scribd a competitive advantage. The competitive advantage which will be hard for competitors to duplicate is Scribds unique partnerships with publishers. Simon and Schuster will offer 5,000 e-titles through Scribd. (Rothman, 2009)

Speed of return on Investment Scribd is able to profit from both publication sales and marketing, and receives payment upon each purchase. Scribd is also able to outperform their competitors by sending the sellers of publications emails and up to date sales reports every time they sell a product, unlike their competitor which often produce reports every 6 weeks. (Savikas, 2009)

Importance of Innovation To keep their competitive advantage, Scribd must constantly have industry leading technology. Scribd is constantly looking for ways to solve consumer problems through continuous innovation. One way they do this is ensuring protection to writers by sending all salable content though a copyright verification system. (Slattery, 2009) Scribd believes in liberating the written word though technology At Scribd, we built a technology thats broken barriers to traditional publishing and in the process also built one of the largest readerships in the world. (Scribd.com, 2009)

Importance of Personal Selling Scribd is a social publishing network, which is what differentiates them from many of their large competitors. Scribd truly believes in making their service a personal experience, they have created a place where everyone can be a part of the publishing experience. Scribd is constantly updating their website interface to ensure ease of use and quality. These are the first of many improvements that are designed to make it easier for Scribd users to create communities around works they love and to communicate to their readers and friends. (Scribed.com 2009)

The key pricing indicators (KPIs) help evaluate the market situation, and evaluate the best pricing strategy. They have showed Scribds differentiation in the market as well the importance of innovation, personal selling, and price. The KPIs above show that the pricing dynamic leans towards skim pricing.

Pricing Strategy

Value-Based Pricing Model Due to the importance of customer intimacy in Scribds business structure, we thought a value-based pricing structure is recommended for Scribd. The value-based pricing structure is based on the customers perceived value of the product or service .This pricings structure facilitates building CRM with the consumer, as well as the lifetime value of the customer.

Perceived Value Perceived value is part of a value-based pricing, in which the value the exchange for it or payment. (Harmon, 2009) Currently Scribd is charging a premium price for some of the publications, this is because they let the author choose the price, and give the copyright owner 80 percent of the selling price. This pricing freedom has caused many writers and publisher to charge more for the materials, compared to Amazon. Scribd also offers a second option for pricing called automatic pricing. With automatic pricing the author can use Scribds algorithm program to determine the best price for the document. With either offer the minimum charge is one dollar. (Scribd.com, 2009)

Skimming

Skim pricing is part of a market-based pricing strategy. In order to have market-based pricing strategy, a business must focus on competitors as well as customers. (Best, 2009) This includes a broad understanding of the customers needs, and the ability to produce a product that meets those needs especially the needs not being meet by competitors.

Value-Based Hybrid Pricing

Hybrid is a combination of both skim and penetration pricing, where the goal is to gain a margin above recovering the total cost. Another important aspect of a hybrid plan is that there is a concentration of second market discounting, which maintains a premium price or skim the gained market, while discounting for new entrants. To successfully gain market share In this competitive industry, Scribd has to find a way to reach out to new users. This pricing structure is customer centric based, as well and financial goal oriented.

The table below illustrates the correspondence between perceived value and potential price levels. This table helps explain the current pricing strategy, and plan for future pricing strategies.

Premium

Equal

Sub Par

Grow

A or B

C or D

D or E

Hold

C or D

Milk
Key A B C D E

C or D

D or E

Stong premium price Premium Price Price Equal to the competition Moderate discount necessary Deep discount needed

Table 7.5-2 Perceived Value (Harmon, 2009) Customer Reactions Scribd seems to be getting a good reaction from customers, although they dont generally compete with Amazon, when it comes to best-seller prices, scribd often is viewed as generally inexpensive. Customer are happy with the content and reading experience which gives Scribd a high perceived value, which in return translates in the a higher willingness of the consumer to purchase. Competitor Reactions competitor reactions from Scribds main competitors is relatively low. Amazon is a large enough company that they are not extremely concerned with startups such as scribed. Amazon deals in volume, and has enough market share that they can price accordingly. Amazon is able to take a small hit on best-sellers, to promote their low-cost price structure.

Breakeven Analysis

2009 %of Budge t ScribdsP&LStatement GrossSalesScribd COGS GrossIncome OperatingExpenses R&D SG&A TotalOperatingExpenses EarningsBeforeTaxes Taxes CapitalFundingSceriesB CapitalFundingSceriesC NetIncome 3yrbudget Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec 2009 Totals Q1Q4 Q1

2010 Q2

2011 Q3 Q4 Q1Q4 Q1 Q2 Q3 Q4

$483,178,913 $7,070,000 $7,181,706 $7,295,177 $7,410,441 $7,527,526 $7,646,461 $7,767,275 $7,889,998 $8,014,660 $8,141,291 $8,269,924 $8,400,588 $92,615,045 $181,037,931 $42,002,942 $44,103,089 $46,308,244 $48,623,656 $209,525,937 $50,082,366 $51,584,836 $53,132,382 $54,726,353 $386,543,130 $5,656,000 $5,745,365 $5,836,142 $5,928,353 $6,022,021 $6,117,168 $6,213,820 $6,311,998 $6,411,728 $6,513,033 $6,615,939 $6,720,471 $74,092,036 $144,830,345 $33,602,354 $35,282,471 $37,046,595 $38,898,925 $ 167,620,749 $40,065,892 $41,267,869 $42,505,905 $43,781,082 $ 96,635,783 $ 1,414,000 $ ,436,341 $ ,459,035 $ ,482,088 $ 1 1 1 1,505,505 $ 1,529,292 $ 1,553,455 $ ,578,000 $ ,602,932 $ 1 1 1,628,258 $ 1,653,985 $ 1,680,118 $18,523,009 $ 6,207,586 $ ,400,588 $ 3 8 8,820,618 $ 9,261,649 $ 9,724,731 $41,905,187 $ 10,016,473 $ 10,316,967 $ 10,626,476 $ 10,945,271

$ 56,320,237 $707,000 $718,171 $729,518 $741,044 $752,753 $764,646 $776,727 $789,000 $801,466 $814,129 $826,992 $840,059 $13,892,257 $ 16,427,981 $3,360,235 $3,528,247 $3,704,659 $5,834,839 $26,000,000 $8,000,000 $8,000,000 $5,000,000 $5,000,000 2 2,315,412 $ 2,431,183 $20,952,594 $ 5,008,237 $5,158,484 $ 5,313,238 $ 5,472,635 $ 33,618,450 $301,163 $301,163 $301,163 $301,163 $301,163 $301,163 $301,163 $301,163 $301,163 $301,163 $301,163 $301,163 $3,613,960 $9,051,897 $ ,100,147 $2,205,154 $ $ 85,307,935 $ 1,008,163 $ ,019,334 $ ,030,681 $ ,042,207 $ 1 1 1 1,053,916 $ 1,065,809 $ 1,077,891 $ ,090,163 $ ,102,629 $ 1 1 1,115,292 $ 1,128,156 $ 1,141,222 $12,875,465 $ 5,479,877 $ ,460,382 $5,733,402 $ 2 5 6,020,072 $ 8,266,021 $46,952,594 $ 13,008,237 $ 13,158,484 $ 10,313,238 $ 10,472,635 $ 11,327,847 $3,851,468 $405,837 $ 3,000,000 $417,007 $428,354 $439,881 $451,589 $463,483 $475,564 $487,836 $500,303 $512,966 $525,829 $538,896 $5,647,545 $ 0,727,709 $ ,940,206 $3,087,216 1 2 1,920,165 $3,647,421 999,670 1,049,654 $ 15,000,000 $ 3,241,577 1,102,136 $ 1,458,710 $(5,047,406) $(2,991,763) $(2,841,516) $313,238 495,961 $(1,716,118) 1,017,200 966,116 106,501 $472,635 160,696

$ 27,396,544 $3,405,837 $ 17,007 $ 28,354 $ 4 4 439,881 $ 451,589 $ 463,483 $ 475,564 $ 87,836 $500,303 $ 4 512,966 $ 525,829 $ 538,896 $ ,727,379 $ 8,432,867 $ 6,940,536 $2,037,563 $2,139,441 $ 6 1 1 962,748 $(3,331,288) $(1,974,564) $ (1,875,401) $ 206,737 $ 311,939

Assumptions 34%taxrates 42%grossmargins 12%R&Dexpenseofnetsales PrelaunchR&Dexpenseisalso12%oftotalsales InitialCapitalFunding:$12.8Million SeiresCFunding15.5Million

ForecastedYearlySales SG&A SGA% MarcomBudget MarcomBudget%

TotalMarketingCommunication 3yrbudget 2009 Q1Q4 Q1Q4 Totals $483,178,913 $ 92,615,045 $181,037,931 $ 209,525,937 $33,618,450 $ 3,613,960 $9,051,897 $ 20,952,594 7% 4% 5% 10% $ 2,290,000 $ 803,000 $1,900,000 $ 4,200,000 0.5% 0.9% 1.0% 2.0%

Exhibit X Total Marketing Communication Budget

Schedule and Timeline 2010 Jan PROMOTIONS 50% purchase of one book 25% purchase of one book Scribd gift card with purchase of one book ADVERTISING Magazines Living Green Magazine Rolling Stone National Geographic Blender Bicycling Newspapers New York Times New York Daily News Wall Street Journal Internet US News Bicycling Google.com Terra.com Greenlivingmag.com TOTAL COST: $700,000

Feb

Mar

Apr

May

June July

Aug

Sept Oct

Nov

Dec

Schedule and Timeline 2011 Jan PROMOTIONS 50% purchase of one book 25% purchase of one book Scribd gift card with purchase of one book ADVERTISING Magazines Living Green Magazine Rolling Stone National Geographic Blender Bicycling Newspapers New York Times New York Daily News Wall Street Journal Internet US News Bicycling Google.com Terra.com Greenlivingmag.com TOTAL COST: $700,000

Feb

Mar

Apr

May

June July

Aug

Sept Oct

Nov

Dec

ProjectPlan ScribdReaderPrelaunchTimeline 1 PRODUCTTIMELINE ProductDevelopmentCompletion ProductPackaging ProductTestingA ProductTestingB UserManual ManufacturingRamp ProductInStores MarketingTimeline ScribdReaderAnnouncement MarketingStrategyDevelopment MarcommPlan AdvertizingPlan WebsitePlan SEM/SEOPlan MarcommDevelopment InStoreDisplaysDevelopment WebsiteDevelopment InStoreLaunchSOPDeveloped SalesTraining CustomerSupportDeveloped ScribesCashCardsInfrastructureCompleted OnlineRegistrationGoesLive ScribedReaderLaunched OnlineOrderingGoesLive PressReleaseAndLaunchParty

August 2 3

September 1 2 3

2011 October 1 2 3

November 2 3

December 2 3

ProjectPlan ScribdReaderPostLaunchTimeline MarketingActivitiesAndMetricsTracing MarketingResearch CompetitiveAnalysis BrandAwareness BrandPreferenceSurvey CustomerSatisfaction ProductReturnRate AdvertizingEffectiveness ProductAvailability FinancialPerformanceMonitoring MarketingBudget SalesRevenue GrossMargin NetProfit

January 1 2 3

February 1 2 3

2012 March 2 3

April 2 3

May 2 3

Trip Adler CEO & Co-Founder

Jared Friedman CTO & Co-Founder

Tikhon Bernstam, COO & Co-Founder

George Consagra President

Engineer

Tammy H. Nam, Vice President, Content & Marketing

Mike McGuinness, Vice President, Business Development

Michael Watts, Software Engineer

Jason Bentley, Official Rep

Michelle Laird, Director, Communications

James Yu Web Developer

Jack Leidlein Senior Director of Operations at Scribd Financial Accounting

Engineer Web Designer Dmytro Shteflyuk Employee Web Designer Engineer Web Designer Engineer

In-House Recruiter

Earl Hathaway, Data and Analytics Engineer

Scribd Cost of Storage


.15 per every Gigabyte Stored 1,440 Gigabyte Stored Per Year Average Storage expenditure Per Year Year One $2592 Year Two $5,184 Year Three $7,776

Scribd Cost for Uploads


.10 per every Gigabyte Uploaded 18 Million Files Uploaded Per Year 12,500 Total Documents per Gigabyte Uploaded 1,440 Gigabyte Uploaded Per Year Average Upload expenditure $1728.00 Per Year

Scribd Cost of Downloads

.17 per every Gigabyte Downloaded Average Download per File 1,000 Yearly .08 Gigabyte are Required to Download a Single Files 1,000x 14,400,000 Gigabyte Per Year Downloaded Average Upload expenditure $244,800.00 Per Year