Sunday, August 03, 2008

The Disipline of Market Leaders

Having worked for market leader organisations in various industries it is easy to distinguish them from the pack. Some believe that size counts and that this determines market leadership, the truth is that size often comes through market leadership but size alone is nothing but a statement at a given point in time.

Market leaders do what it says on the can ‘lead markets’. They are focused, proactive and although they recognise the short term are very much focused on the long term and creating a unique market position and differentiator. Do we have them in the publishing sector – yes but they are not who many would think of as market leaders. An interesting example is Taylor and Francis whose growth and digital strategies have been bold and delivered huge advantage when others have merely followed. The recent article in the Bookseller (25 July, ‘Jolly Rodger’) eludes to the vision and drive Rodger Horton and his team have given this publisher.

At times of fiscal constraint we often find that market leaders remain focused and plough forward, often bucking trends.

It is hard to find many examples of market leadership and easy to see many pretenders but one company clearly stands head and shoulders over the pack for the last decade – Amazon.

An industry ‘expert’ and colleague once told me that Bertelsmann and their would crush Amazon and that their model was nor sustainable. Needless to say he didn’t understand their model, the power of positive cash flow, their relentless drive to capture market share and their global brand proposition. It was ’98 and obvious to many that they were going to dominate, but the manner in which they have set about it continues to demand respect.

They have:
Extended bibliographic record, making the book jacket obligatory on the net, introduced reader reviews. Remember where you first saw ‘Search Inside’?
Recognised that used , rare and front list are all books and that the publication date is not always top of the consumer’s agenda. Combining this and their marketplace offer was both logical and a breath of fresh air.
Captured the audiobook initiative through acquisition of first Brilliance and latterly Audible, they have taken the audio book market by the scruff of the neck. They already had the MP3 and DRM credentials but with Audible they now have both bases fully covered.
Established themselves as a digital player. Through their acquisition of Booksurge and their POD policy they have positioned themselves not only to supply POD but like others they can now also capture the bigger prize of the digital files themselves.
The Kindle may be an ugly duckling but it has many more titles than any of its competitors and more importantly belongs to a brand that is clearly associated with books. Adobe and Sony may all command trade attention today but this is not their market, is a trade only offer. In the case of Sony they can always leave as fast as Betamax or walk away like Microsoft Live Book Search or back the wrong horse as with their original BBeb ebook format.

The list goes on but we now read of Amazon’s payment gateway offer to rival PayPal and more importantly their full acquisition of ABE. This later move is very interesting and starts to potentially tie many strings together. Some thought it good that they would continue run ABE as a separate brand and company. Some would say that there is no need to join them at the customer, but join them at the inventory and sales data. Think about what ABE offer Amazon? There is rich bibliographic on titles that often didn’t have any. There is 15 years of sales data of the long tail, not just of books in print but those gems that have long been lost and forgotten. Only Alibris has similar data and there is little chance of a new entrant today. Combine ABE’s information assets, market position, the Amazon services such as Booksurge and Kindle offer and a clearly focused market leader and you have a potential offer that is both unique, extremely interesting and one to watch.

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