KINDLE CASE 7
Amazon has a good reputation. It has an already establishedmarketplace, which started with books and has now advanced to includethe sale of different products, like games, videos, music and beautyproducts. It can use its reputation, as well as huge customer base toattract e-book readers. Hence, the targeted consumers are more likelyto by Kindle Fire, due to its reputation in offering differentservices.
Amazon has a good infrastructure for content. Kindle Fire has beendesigned in the same way that users purchasing books are able tonavigate Amazon’s website. It has integrated a user account inKindle, which makes it easier for users to search for content, orderand organize it.
Kindle uses prepaid sprint service, which makes it possible forusers to have wireless content delivery. The Whispernet worksseamlessly, which differentiates Kindle from competitors. This isbecause users are able to buy, discover as well as sync content fastand effortlessly regardless of their location.
Kindle fire is selling at a lower price. When compared to othercompetitors in the tablet markets, like Nook, Kindle is moreaffordable. Since all competitors offer more of the same products,customers are more likely to buy a lower priced complementaryproduct.
Amazon offers its customers a return and free shipping policy. Thesame applies to Kindle. It is one of the strengths because itenhances the possibility that the tablet will be purchased by peoplefrom different locations.
When compared to competitors like Barnes and Noble or Samsung,Kindle Fire offers a product of better quality. This in addition toAmazon’s brand recognition enhances the likelihood for customers topurchase Kindle.
While the company sells Kindle at a lower price, it could become aliability. Selling at a lower price increases the sale of Kindle. Onthe other hand, Amazon incurs expenses in terms of media costs. Thetelevision shows, music and videos, which customers are able to surfvia Kindle are costly.
Kindle Fire users are restricted and limited in what products theycan access or view using the device (Tomar, 2013). It is limited tothe products offered by Amazon. This means that consumers cannot usethe tablet in accessing other services outside Amazon.
Kindle Fire might be perceived as ipads knockoff. Despite havingbeing introduced before the ipad, Apple has managed to create aproduct that attracts more liking by customers than the Kindle.
Amazon is a pioneer in the e-book reading market. Although it nowhas competitors, none have been as successful. It could use itsmarket share as an opportunity to expand the number of booksavailable via Kindle. This will in turn increase demand for thetablet.
The company can increase the resources customers can access usingthe device. Hence, it gains a better competitive advantage withcompetitors like Apple’s ipad.
The low costing strategy draws more customers to buy the product. Inspecific are customers interested in accessing online content fromany location. In addition, the low cost is maintained via the onlinesale of books.
The main threat is competition. Just as Amazon is working to improveits product and make it more affordable, so are competitors. Theseinclude equally recognized companies in the market like Google,Apple, Barnes & Noble, Motorola and Samsung. For instance, Appleis set to release a better ipad version, which will be designed as atablet computer.
Kindle Fire uses an operating system founded on android technology.Different e-readers, smart phones and competitors’ tablets also usethe same OS. Hence, Kindle lacks a competitive advantage.
Amazon mainly relies on its e-book business. However, there is apossibility of e-book pirating emerging, which could be a major blowto Kindle Fire’s use.
The case study is a discussion of the problems Jeff Bezos faced,while guiding Amazon to venture into the tablet market. Bezos, thecompany’s CEO, was torn between concentrating on an e-reader marketwhere Amazon had already dominated through Kindle Fire, and venturinginto the manufacture of tablets. He chose to create a tablet, despitelacking expertise in the manufacture of tablets. The objective was tocreate a product, which would allow users to access an array ofAmazon services and features from their comfort. Having a largecustomer base in its e-reader market, the company must haveanticipated the same success with Kindle.
The company assumed that the end-to-end experience that Amazon wouldcreate for its users would result in increased sales of their Tablet.In addition, Kindle would act as a strategy for the company toincrease the sale of its products and services due to easier access(Sawhney, Owens & Goodman, 2014). In the process, Bezos faces twoissues. One is the managerial decision. As the CEO, he must makeinformed choices, which will ensure the success of the company’sproducts. Second, while Amazon was confident that its e-readerpopularity would be a benefit, they did not consider the impact ofcompetitors creating similar tablets. Hence, there marketing plan isineffective in allowing them to venture into the tablet business.
Kindle Fire is a tablet. It has a colored LCD screen that is 7inches. The screen is also touch. It is a device that has a Wi-Firadio, internal storage, duo core processor as well as free cloudstorage. It fits the category of a tablet due to its portability,size and the different applications.
Amazon can target different customers. Children – the tabletcompanies have not targeted children. Children love to play computergames, and with a tablet like Kindle they can play the games fromanywhere. Targeting children influences the buying decisions ofparents. In addition, mobile gamers are also likely to buy thetablet, due to its large screen. Students – Amazon already makesbooks available online. Students, specifically in higher education,may not have the time to sit in one place and read a book using theircomputers. However, with a portable device like Kindle, which makesit easier to access digital books from anywhere, they act as a goodtarget market. Media junkies – the company already makes itpossible for people to stream videos, music, magazines and differentmedia content. Hence, media junkies are a target because they areable to enjoy all the services using a single device.
Price is an important factor when positioning Kindle in the highlycompetitive market. Hence, Amazon should ensure their device ischeaper than the ipad and different tablets. Hence, more customersare able to afford and opt for Kindle. Positioning Kindle relative toe-readers can be achieved by partnering with publishers and mediacontent sources, to ensure their products sold through Amazon havemore rich content.
The subsidy is justified. This is because although Amazon will beselling the Kindle at a lower price, they increase the chances ofbuyers with the subsidy. Also, every sale at the subsidy price meanssubscription to Amazon special where the company sets the minimumprice for its contents and goods for a minimum two-year period.Within this period, Amazon is able to recover from its loss ofselling the tablet at a lower price. The more people buy Kindle atthe subsidized price, the more profit earned from setting a minimumprice. The loss from Kindle is balanced by setting a minimum price oncontent and product.
Sawhney, M., Owens, J. R & Goodman, P. (2014). Kindle Fire:Amazon’s heated battle for the tablet market. Kellogg School ofManagement, 1-23.
Tomar, A. (2013). Kindle Fire to challenge Apple iPad. MarketLine. Retrieved from: http://www.marketline.com/blog/kindle-fire-to-challenge-apple-ipad/