Tutorial 3 - Kindle Fire

Strategic Marketing – SUMMER SCHOOL 2014 1© Imperial College Business School

Marketing Planning and Competitor Analysis

Tutorial 2: Kindle Fire

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• Lecture Revision– Internal Planning Tools– External Planning Tools

• Case Discussion

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Overview for today

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Managing the internal planning process

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What is market planning?

Corporate

Operational

Departmental

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Name three internal planning tools

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Internal

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• Customer concerns such as service quality, cost and response times

• Internal measures such as staff productivity, range of skills

• Financial measures such as revenue, profitability and costs

• Learning and growth or innovation measures such as rate of product development, availability of staff training

Strategy-stakeholder alignment

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1. Balanced Score Card

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Sources of competitive advantage

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2. Porter’s Value Chain

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Sources of competitive advantage

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2. Porter’s Value Chain

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Management and organisation design

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3. McKinsey 7s

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1. Strategy - the plan devised to maintain and build competitive advantage over the competition.

2. Structure - the way the organization is structured; reporting protocols.

3. Systems - the daily activities and procedures that staff members engage in to get the job done.

4. Shared Values - the core values of the company that are evidenced in the corporate culture and work ethic.

5. Style - the style of leadership adopted.

6. Staff - the employees and their general capabilities.

7. Skills - competencies of the employees working for the company.

Management and organisation design

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3. McKinsey 7s

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Name three external planning tools

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External

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Marketing Environment

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1. SPICC

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Analysing industry environment or ‘structure’

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1. Porter’s 5 Forces

e.g. Think about the pharmaceuticals vs. (post-regulation) airline industry

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Merging internal and external factors

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3. SWOT Analysis

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Situation in 2012…• 5 million sales in Kindle Fires – over half of non-Apple

tablet market (iPad launched in 2010). • Amazon share price has dropped $40 since the launch

of Kindle Fire. • Analysts concerned about selling hardware at cost,

betting that content and commerce revenues would make up for it.

• Needed to modify the positioning the device in response to new entrants such as Samsung, Motorola and Google

What is the situation?

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Case Study: Kindle Fire

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“Invention is in Amazon’s DNA”

(Bezos, Letter to Shareholders, 2010)

Amazon in 2012

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Current Situation

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• E-Reader market in 2007: Ripe for disruption?

• Amazon Kindle (Mark 1)

features, price, partners• E-Book ‘ecosystem’

How does it work?

Early days of the ‘e-reader’ market

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Setting the scene

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Competition from the Nook, iPad and Android: How do their features compare?

Amazon Kindle ‘Fire’ (Mark 2)

What’s new? features, price, partners (publishers)

Target segments: Media junkies, Mobile gamers, Higher education

Q1. Form a competitive position and a product assessment, as part of planning, would you categorise the Kindle Fire as a ‘tablet’ or not? Explain your decision.

Q2. Devise criteria for comparing product offerings and position the Kindle Fire

Rise of competition and the tablet market

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Tablet (R)evolution

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Product features and competitive advantage

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Tablet (R)evolution

Kindle Nook iPad Google Android

Kindle Fire

Price $ $ $ $ $

Features

Strategic objective

Competitive Advantage

e-reader tablet

t

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Q.2 Based on your appreciation of the case, what bets is Amazon making in the business model for the Kindle?

Where is he predicting Amazon’s future $ revenues will come from?

Betting the business

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Case Study Questions

Hardware Content Commerce Advertising

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Q.2 Based on your appreciation of the case, what bets is Amazon making in the business model for the Kindle?

Where is he predicting Amazon’s future $ revenues will come from?

Betting the business

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Case Study Questions

Hardware Content Commerce Advertising

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A chart Bezos should have looked at in 2010?

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E-Commerce Trends

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https://www.yahoo.com/tech/amazons-first-smartphone-the-fire-phone-has-a-89237543259.html

Fire phone: Why didn’t he do this before?

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Amazon Smartphone

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How have circumstances changed?

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Current situation

Jan 2014: Q1 Results Amazon warns of possible first-quarter loss, stock falls

June 2014: Bezos announces Launch of Amazon Smartphone