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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