Harry Lisdol Case

Group 1 - Case 2: Harry Lindsol's Textbook Decision

Contributors: Glenda Meyer, Tamara Parsons, Connor Dinwoodie, Wilfred Avedoza *************************************************************************************

1. Describe the competing business models of traditional textbooks and eTextbook. How do the customer value propositions differ? (5 marks)

The business model is assessed by looking at revenue generation, cost structure, profit margin and assessment of value propositions as follows:

Business Model - Paper Textbooks versus eTextbook (with a look at revenue generation, cost structure and profit margin)

The business model of traditional textbooks is to keep releasing new editions of the current text, in order to reduce the profit they're losing out on via student's reselling their books from the previous term - this is the primary revenue generating factor in the paper book industry. Although eTextbooks are now available, paper textbooks are still preferred by buyers largely due to their "natural reading" experience and resale value. Due to this reason, profit margins are still high compared to eTextbook. Cost structure however is relatively high due to the materials, printing, shipping, warehouse, commissions and other costs that are associated with producing, marketing, distributing and selling books.

When eTextbooks began to penetrate the textbook market, they needed to differentiate the product. They did this by offering features to professors and publishers that traditional textbooks simply could not. eTextbooks' business model thus is based on modern technology and the value propositions that are made possible using this technology. eTextbook can enhance buyer experience - it offers a much more modern way of learning in addition to in class lectures and assignments; the students can track their progress; it can aid with professor feedback and even has a specialized system that is able to cater specifically to the student's learning style and...