INDUSTRIAL COMPETITIVE ANALYSIS USING

PORTER’S FIVE FORCES MODEL

Threat of Entrants
MODERATE

Bargaining Intensity of Bargaining

power of rivalry power of
supplier HIGH MODERATE buyer - LOW

Threats of
substitutes LOW

 THREATS OF NEW ENTRANTS: is MODERATE in the online book rental

business. It is easy to start a new online book rental service. But coming with the differentiated
business model is difficult. Lots of tie-ups are required with the book supplier in order to gain
the market share.
 BARGAINING POWER OF BUYER: is LOW. The bargaining power is very much
limited with the buyers, as the price for the books are enlisted in the website.
 THREATS OF SUBSTITUTES: is LOW. Even though the E-books are trying to
penetrate the Indian market, our education system follows the physical presence of books to
the student’s convenience. Hence the substitute value is low
 BARGAINING POWER OF SUPPLIERS: is HIGH. Suppliers do have a lot of
experience in the industry. So as start-up while setting up the marketplace, bargaining power
of the suppliers be a highly effective force.
  INTENSITY OF RIVALRY: is LOW. Cumulatively summing up every force, we
find the total intensity of rivalry is moderate in this business model.

MARKETING MIX STRATEGY:

Product strategy:

The company will tie-up with the books suppliers in all universities in India. Then the
books from these suppliers will be listed on the website. Simultaneously books for the
competitive exams will also be listed on the website which will be stocked at company
headquarters.

The product lines will be as follows:

University books Competitive Exam Book Lovers novels,

books autobiographies and
conceptual books
Books under all the Books for Books for
universities in India. competitive the potential
 University exams. e.g. readers to
recommended  UPSC and state spend the
books exams quality time
 Students  Railways exams
preferred books.  C.A. exams
 Entrances exams
(MBA/Eng./Med.)

Pricing Strategy:

The company has a business model which will directly be competing against the traditional
book market. As traditional book market has same business models offline. Patching up with
those traditional retailers will give a chance to sell online and increase the sales beyond their
physical reach to sell the books. Customer asking for service will get a home delivery with
same price and fewer efforts. So, pricing strategy is designed to push retailers to give a 10%
margin on sales driven through company website.
 Category of books Price for customer On return Company’s Margin

Fresh M.R.P+(service Service charges

charges) based on zonal
location
Used 70% of MRP 60% of price paid 10% of sales

PLACE:

The distribution process will be executed by the part time employees. The place of distribution
is divided into 4 zonal regions.

1. East Zone.
2. West Zone.
3. North Zone.
4. South Zone.

PROMOTION:

 In today’s fast moving market social marketing plays an important role in reaching out
the potential customers. Promotional activities can be carried out by means of
advertising in social medias such as YouTube, Facebook, Instagram
 Another mode of promotion could be utilizing Student Ambassadors for our service to
promote our service in their respective college and schools. The student ambassador
will be getting a reward of free subscriptions on the basis of their referrals.
SEGMENTATION:

Exam-time Comp-Exam Start of year

Bulk- buyers Book lovers
Buyers candidates buyers

Cracking Throughout
Cost saving
Purpose Competitive reference to Casual readers
Exam studies deal
exams study

Age 16-24 22-30 19-26 19-26 8-56

Book returning
habits High Low Moderate Moderate Moderate

Online
Buying
Low High Moderate High Moderate
habits

Cost sensitivity
High Low Moderate Moderate Moderate

Segment Size 10% 25% 20% 10% 35%

This segmentation is based on the behaviours of customers. There are five different segments
made as follows:

Exam- time buyers:

These are the buyers who buy the books at the time of exams. The purpose is study at the time
of exams. This kind of customers prefers buying offline because they want the books instantly.
Characteristics show that this would not be much attractive segment.

Competitive Exam buyers:

This segment is for students and graduates appearing for the competitive exams. These
customers generally do prefer buying online because of availability and variety of books. They
have very good spending capacity for the books they need. Characteristics show that this would
be a very attractive segment.

Start of year buyers:

This segment refers to the students who do buy books at the start of the year. These students
do have tendency to buy online as they have time to wait for delivery and they seek good offers.
So, this is the most attractive segment to target.

Bulk buyers:

Bulk buyers have tendency to look for cost saving offers online. This segment is also
moderately attractive.

Book readers:

Books readers are casual readers who likes to spend their times in novels, autobiographies and
conceptual books.

TARGETING:

From the above table, targeting will be the ‘Start of the year’ buyers, ‘Competitive
exam candidates’ and ‘Book lovers’ contribute to the attractiveness rating of ‘70’ together.
These segments have characteristics which will push the customer to buy books online.

POSITIONING:

Positioning is creating brand value to the potential customers. The positioning of the
company will be based on high cost efficient and reliability.