MQM 220 – Business Organization and Management Section 4
Final Case Analysis: Audible.com
1. You must use this page as the cover page.
2. Your answers must be typed-double spaced. Any paper not following this guideline will not be graded and not returned for re-formatting.
3. Each question must begin on the top of a new page. Any paper not following this guideline will not be graded and not returned for re-formatting.
4. Late papers and email submissions will not be accepted. This analysis is due by the above date by 3:00 in Thursday, May 30th, in my office Room 239 COB Building.
1. What are the issues Audible faces? What options are open to the company?
a. Your should include in your analysis:
i. Porter’s Forces Model of Competition.
ii. An environmental scan
iii. A statement about the currant strategy?
2. Who is likely to want to purchase Audible outright?
3. Who is likely to invest in the company? Why
4. How can Audible be a profitable company?
1 Audible was on a verge to success when its customer base was increasing tremendously through 1997-1999. However, in 2002 the decline began to affect audible when its expenses exceeded its revenues continually to the extent that the stock moved from national market to small cap market to over the counter market by early 2003. Currently, the environment of the internet media is on a downturn, it is different from what it was in the 1990’s and has made it difficult for internet ventures to succeed.
According to Porters model, the suppliers of Audible have considerable bargaining power as the company is highly reliant over its suppliers. The books, newspapers and magazines are supplied to audible for sale. For them, audible was important as owing to the time sensitivity of print media such as newspapers and magazine, cassettes and CDs were not suitable. There are minimal barriers to entry for online businesses hence; audible is expected to be faced with growing competition. Due to the high growth rate of the digital media industry there is high risk of substitutes as more and more companies indulge in providing audio books and contents. Currently, audible is not faced with extensive competition as audio content is a relatively novel concept and Audible can be considered as a pioneer in the audio content industry. Nevertheless, competition is taking a toll and audible is facing dangers of alternatives in the market.
Audible follows its strategy of promoting the brand through increased web-site traffic aided by online marketing and by maintaining strategic alliances with cable operators, CD-burning software providers and retail partners.
2 Audible is very suitable for consumers that are always on the go and do not have time to sit and read books or material. It is convenient and handy for people who are busy and are more likely to prefer audible reading material. Hearing text allows mobility and flexibility; it saves time through multi tasking and can be more interesting than reading. Moreover, audible is an ideal solution for the visually impaired population who is unable to read text and could now hear text that for them was a farsighted notion.
3 With the passage of time and the advent of globalization, information technology is becoming a widespread phenomenon. The use of the internet has been on a constant rise and with the change in lifestyles there has been a growing trend in technologies such as the digital media commerce which allows users the convenience and accessibility any where and at any time. The scope of this area is of key interest to software and IT related companies as well as all the organizations related to the entertainment and information media due to the prospects of the company in the future. The digital media industry is expected to grow to an extent where the information and entertainment economy is reliant over digital delivery and distribution of media.
4 In order to become profitable audible needs to cut down its expenses. It needs to build its brand recognition among the consumers and distinguish its brand offering from that of other companies. For new technologies that diverge consumers from their current lifestyle it is important to communicate with them the benefits of the new medium and how it could make their life easier. Audible should attract more customers through extensive marketing and free trials. Alliance with book stores would also help audible in reaching out to its target consumers through book stores. Audible should keep up to date and become agile of the evolving technology. In order to be profitable, it should give its customers what they want and add functionalities as they become widespread, Such as easily downloadable material for smart phones and Mp3 players. Audible should create alliances with more media providers as well as consumer electronic manufacturers such as Nokia and Blackberry. Also, since the majority of sales of Audible are of its audio content, it should focus more over this aspect of its operations and provide larger variety to the consumers.
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