Scribd mkt plan

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					A writer’s dream,
a reader’s paradise




                  Marketing Plan for Scribd
                  Submitted by:   Team 2
                                  Marketing Strategy & Management
                                  Portland State University
                                  Summer 2009

                                  >   Stacy Butchart
                                  >   Liam Flaherty
                                  >   Kurt McDonald
                                  >   Jason Rippy
                                  >   Bianca Shedd
                                  >   Kinero Tan
                                  >   Jaclyn Tiedemann
TABLE OF FIGURES......................................................................................................................6

LIST OF TABLES ...........................................................................................................................6

LIST OF EXHIBITS ........................................................................................................................6

1. EXECUTIVE SUMMARY ............................................................................................................4
          Market Opportunity ..................................................................................................................... 4
          Company Overview ..................................................................................................................... 4
          Competitive Assessment ............................................................................................................ 5
          Competitive Advantage............................................................................................................... 5
          Net Assessment .......................................................................................................................... 5
              Internal SWOT ....................................................................................................................... 5
              External SWOT....................................................................................................................... 6

2. BUSINESS OVERVIEW .............................................................................................................. 6
          The Business Opportunity — Scribd’s Big Idea ......................................................................... 6
          Company Overview ..................................................................................................................... 7
          Products and Services ................................................................................................................ 8
              Product Description................................................................................................................ 8
              Value Proposition ................................................................................................................. 10
              Brand Identity ...................................................................................................................... 13
              Brand Identity Promotion ...................................................................................................... 13
              Strengths and Weaknesses .................................................................................................. 14
          Conclusions ............................................................................................................................... 14

3. TECHNOLOGY ASSESSMENT................................................................................................ 14
          Formal Product Description ...................................................................................................... 14
          Product Technology .................................................................................................................. 15
          Product Platform ....................................................................................................................... 16
          Competing Technologies .......................................................................................................... 17
              Amazon Kindle ..................................................................................................................... 17
              Docstoc ............................................................................................................................... 18
          Technology Partners ................................................................................................................. 18
              FAB Analysis and Comparative Assessment ......................................................................... 18
              Cost Factors / Drivers........................................................................................................... 19
              Technology Life Cycle ........................................................................................................... 19
              Product Life Cycle ................................................................................................................ 19
          Evaluate Potential Disruptive Technologies ............................................................................. 19
          Conclusions ............................................................................................................................... 19

4. MARKET ANALYSIS ............................................................................................................... 20
          Potential Market Segments ...................................................................................................... 20
          Segmentation Analysis ............................................................................................................. 21
              Customer Profiles ................................................................................................................. 21
          Value Drivers.............................................................................................................................. 23
              Product Value Drivers ........................................................................................................... 23
              Customer Value Drivers ........................................................................................................ 23
              Segment Comparison and Contrast...................................................................................... 24
          Segment Attractiveness ............................................................................................................ 25
          Market Potential ........................................................................................................................ 26
          Market Access........................................................................................................................... 27
          Maximum Opportunity .............................................................................................................. 27
          Target Market ............................................................................................................................ 28
          Potential New Markets .............................................................................................................. 28
          Conclusions ............................................................................................................................... 28


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5. COMPETITOR ANALYSIS........................................................................................................ 29
         Industry dynamics. .................................................................................................................... 29
             Porter model ........................................................................................................................ 29
             Existing Industry Competition ............................................................................................... 30
             Threat of Potential Entrants .................................................................................................. 30
             Threat of Substitute Products ............................................................................................... 30
             Bargaining Power of Customers ........................................................................................... 31
             Bargaining Power of Suppliers .............................................................................................. 31
             Porter’s Five Future Forces ................................................................................................... 31
             Sources of competitive advantage ........................................................................................ 32
             Competitive barriers ............................................................................................................. 33
             Consolidation ....................................................................................................................... 33
             Partnership/Alliances ............................................................................................................ 34
         Value chain ................................................................................................................................ 34
         Business ecosystem ................................................................................................................. 34
         Competitive Factors Mapping .................................................................................................. 34
             Key Competitive Factors and Strategy Canvas ..................................................................... 34
         Conclusions from Strategy Canvas .......................................................................................... 38
         Competitive Profiles .................................................................................................................. 38
             Amazon ............................................................................................................................... 38
             Docstoc ............................................................................................................................... 39
         Conclusions (Company Strategy, Brand Position, Growth Strategy, and Market Strategy) ...................... 40
         Disruptive Potential ................................................................................................................... 40
         Competitive Benchmarks.......................................................................................................... 40
         Best in Class ............................................................................................................................... 40
         Competitive Gaps ....................................................................................................................... 41
         Conclusions ............................................................................................................................... 42

6. NET ASSESSMENT ................................................................................................................. 43
         SWOT Analysis .......................................................................................................................... 43
              Strengths ............................................................................................................................. 45
              Weaknesses ......................................................................................................................... 45
              Opportunities ....................................................................................................................... 46
              Threats................................................................................................................................. 46
         Critical Factors ......................................................................................................................... 46
              Risk Factors ......................................................................................................................... 47
              Success Factors ................................................................................................................. 48
         MOA CONCLUSION ................................................................................................................. 50

7. MARKETING STRATEGY ........................................................................................................ 51
         Strategy Platform .................................................................................................................... 51
         Marketing Plan Objectives ........................................................................................................ 51
         Marketing Objectives Dashboard ............................................................................................. 52
         Growth Strategy ....................................................................................................................... 52
             Blue Ocean Strategy ............................................................................................................ 53
             Ansoff Matrix ........................................................................................................................ 53
         Strategy Recommendations ..................................................................................................... 54
         Market Leadership ................................................................................................................... 56
         Positioning Strategy ................................................................................................................. 58
         Desired Market Position ........................................................................................................... 58
             Key Value Drivers ................................................................................................................ 59
         Branding Strategy ..................................................................................................................... 60
             Transition to 4 Ps ................................................................................................................. 61




                                                                        2
         Product Plan ............................................................................................................................ 62
             Product Objectives .............................................................................................................. 62
             Product Life Cycle ................................................................................................................ 62
             Product Strategy ................................................................................................................ 62
             Product Cost Model ............................................................................................................ 64
             Product Launch Issues & Timeline ...................................................................................... 65
         Sales and Distribution Plan....................................................................................................... 66
             Sales and distribution objectives. .......................................................................................... 66
             Sales strategy ...................................................................................................................... 66
             Channel strategy ................................................................................................................. 68
         Promotion Plan ............................................................................................................... 69
              Promotion Plan Objectives ................................................................................................... 70
              Promotion Theme ............................................................................................................... 71
              Campaign Plan..................................................................................................................... 72
              Schedule and Timeline ......................................................................................................... 73
         Pricing Plan ............................................................................................................................... 75
              Pricing Objectives................................................................................................................. 76
              Pricing Strategy ................................................................................................................... 76
              Customer Reactions ............................................................................................................ 77
              Competitor Reactions.......................................................................................................... 77
              Break Even Analysis ............................................................................................................ 77

8. IMPLEMENTATION .................................................................................................................. 77
         Financials ................................................................................................................................... 77
             Pro Forma P&L .................................................................................................................... 79
         Marketing Budget ....................................................................................................................... 79
         Controlling the Marketing Plan .................................................................................................... 81
         Post-launch Activities ................................................................................................................. 81
         Tracking and Monitoring ............................................................................................................ 82
         Organizational Requirements .................................................................................................. 83
         Organizational Plan ................................................................................................................... 85

9. BIBLIOGRAPHY ..................................................................................................................... 87

10. TABLE OF FIGURES .............................................................................................................. 89

11. LIST OF TABLES ................................................................................................................... 89

12. LIST OF EXHIBITS................................................................................................................. 90

13. APPENDICES ........................................................................................................................ 91
         Project Proposal .......................................................................................................................... 92
         MOA ........................................................................................................................................... 97
         Weekly Assignments ................................................................................................................. 148




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SECTION 1
EXECUTIVE SUMMARY


    Market Opportunity
    With over 50 million monthly unique visitors, many of them searching through millions of documents in over 90
    different languages, Scribd is currently is the largest online publishing company in the world. As a new competitor in
    the e-book industry, Scribd has already established a unique position as the “largest social publishing company in the
    world”, and has been referred to as the YouTube of written documents. Scribd entered this highly competitive market
    with the introduction of their iPaper technology (Scribd.com, 2009). This disruptive technology has given them a
    competitive advantage in the market. Their unique vision, where writers and authors are given the freedom to publish
    almost anything, and the opportunity to profit in an 80/20 revenue split leads to an exciting positioning moving forward
    and their “big idea”:

            A writer’s dream, a reader’s paradise

    Through our secondary research and use of the market sizing and forecasting models, (Harmon, 2007) our team
    has arrived at a Total Available Market (TAM) of 53.8 million potential buyers representing $1.3 billion worth of buying
    power in the e-book (digital publications) industry. Within this market, we have derived a Served Available Market
    (SAM) consisting of 23.3 million potential buyers, representing $563 million worth of buying power. The target market
    selected through our analysis of three potential market segments is the Alternative Online Consumer and aligns best
    to Scribd’s offerings, vision, and culture.

    Launched in March of 2007, Scribd resides in a market that is currently dominated by Amazon and home to players
    such as Docstoc and multiple smaller market entrants. Scribd currently holds a XXX percent of market share and will
    be working diligently to increase their brand awareness within the market. Scribd has established itself as a true player
    and continues to thrive, in part, at least, by remaining true to a vision that makes them a remarkable service provider.
    To date, Scribd has been able to continuously create awareness, gaining new potential customers (visitors to their
    site), and establishing beneficial partnerships at a rapid pace.

    From Scribd’s vision, “to liberate the written word — to turn everyone into a publisher and create the best possible
    reading experience on the web and mobile platforms”, we have derived three contiguous objectives: 1) provide
    sustainability of the written word, 2) create a one-stop-shop for all things written, and 3) maintain integrity in displaying
    a creator’s work.

    The ROI for Scribd current investment capital has been calculated to be around 600 percent by the end of first quarter
    2012. Scribd hopes to secure revenues of $95 million with their initial $12.8 million gained through investment capital.
    The original capital investment of $12.8 is forecasted to start producing profit in the second quarter of 2010, as a
    result of multiple revenue drivers including the launch of the Scribd Store in May 2009. With this new revenue stream
    Scribd can become not just a social online publishing site, but a viable and profitable enterprise. Being the platform
    facilitator in the written document-sharing world, as Scribd continues to grow as will their offerings. In June 2009,
    Scribd partnered with the fourth largest publisher in the U.S., Simon and Shuster. The continued attraction of writers
    and publishers, of course, provides more value to customers with regard to diversity and availability of publications.
    As a result, a growing rate of visitors to the site will provide Scribd the opportunity to increase on-site advertising
    revenues, attracting more and larger advertisers and raising rates.


    Company Overview
    Founders: John Adler, Jared Friedman, and Tikhon Berstamm

    Current Invested Capital:

            - Y Combinator - $12k Seed
            - The Kinsey Hills Group - $40k - Angel
            - Redpoint Ventures & The Kinsey Hills Group – $3.71M Series A
            - Charles River Venture, Redpoint Ventures & The Kinsey Hills Group - $9M Series B
    Future Investment Required:
            - $7M Dedicated to R&D and Promotions



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Differentiation: Scribd’s technology and unique service allows customers to co-create value that is currently unrivaled
in the industry.

Business Opportunity: Scribd is capable of altering the way that the e-book industry currently operates, and
possesses the seeds to potentially forever change the world’s reading experience all together.

The initial startup capital has allowed Scribd to create iPaper, and the resulting superior viewing and publishing
experience. iPaper has made it convenient for users to transform their current PDF, Word, Keynote, Numbers, Power
Point files, or various other formats, into the universal Adobe Flash format, for easy viewing and storing. Scribd’s
primary business functions are to provide services through a website that allow consumers, publisher, and writers with
a place to connect and share. To continue to enhance the customer experience, Scribd will need further capital to
continually improve upon their platform technology and new product development.


Competitive Assessment
Scribd’s two main competitors are Amazon and Docstoc.

Amazon is the e-book industry leader and strong competitor due to their handheld reading device (Kindle), which
makes the reading experience more interactive. They also have an already established readership and great amount of
inventory creating a challenge for Scribd to convert customers.

Docstoc is also considered a key competitor because they offer a very similar service, allowing authors to upload and
readers to download books online. Docstoc’s focus is on the business and educational market segments.


Competitive Advantage
Scribd maintains a competitive advantage in three major areas: price, technology, and flexibility.

Scribd can offer lower priced publications because they offer authors 80 percent of revenues in return for them using
their website to publish books. Because Scribd offers such a high return on profits, authors are given an incentive to
price low because they still earn more on profits than any other retailer. In addition, Scribd offers free and low cost
publications as an enticement to potential customers.

The second competitive advantage Scribd maintains is their technology used to upload and download books. iPaper
has allowed Scribd to stand out among competitors in terms of speed for downloading books and user friendliness.
Current suppliers of e-books have yet to master a downloading technology that creates convenience for both the
author and the reader. The ability for Scribd to give readers the exact design and layout the author intended, provides
an unmatched customer reading experience.

The last competitive advantage Scribd maintains, is their ability to open their service to all authors who want to publish
their work. This gives Scribd a huge advantage because the suppliers are limitless in terms of the type of work that
can be uploaded. People are attracted to this website because they have the largest variety of reading material
available with just a click of a button.


Net Assessment
Internal SWOT
Strengths




Weaknesses




An analysis of Scribd’s strengths and weaknesses has uncovered the need for Scribd to continue to invest in
innovative technology. As competitors race to meet or beat iPaper’s capabilities, it is crucial Scribd be one step
ahead. Scribd also needs to continue to co-create value with partners and customers that can surpass the value


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    created through online retailers such as Amazon. Additionally, an introduction of their own mobile reading device,
    via in house development or a partnership, is key to Scribd’s future success and growth within the industry. Scribd
    needs to continue to enhance the reading experience, while also implementing a CRM program to improve the overall
    customer experience in order to remain a viable player in the digital publications market.

    External SWOT
    Opportunities




    Threats




    Exploration of the external market has given insight to areas that need to be addressed for Scribd to continue to be
    successful far into the future. While virtual readership continues to grow, Scribd needs to establish a large partnership
    base to continue to provide more value to market consumers than their competition. Examples include magazines
    and educational publishers. While rapid industry growth provides Scribd with advantages to compete against industry
    giants, the threat of competitors and new market entrants eliminating Scribd’s iPaper technology advantage is a
    concern. Investment capital should be allocated to R&D to continually adapt and stay atop the innovation curve.

    Scribd has an exciting future ahead. The Marketing Strategy section of this document lays out the plan for moving
    forward by creating a blue ocean technology, a unique positioning that will differentiate Scribd in a meaningful way,
    and a marketing communications plan that will create the necessary brand awareness, community of followers and
    revenue gains to cross the chasm from start-up to market leader.

    To achieve these gains, Scribd seeks an additional $7 million in final round investment funds. A majority of these funds
    will go to continuous and aggressive R & D, promotion and brand awareness, and the development and deployment
    of a progressive CRM program.



SECTION 2
BUSINESS OVERVIEW

    This section will demonstrate an overview of the Scribd company specifically illustrating a product description, value
    propositions, and brand recognition. The company’s big idea will be presented, the framework in which it operates
    along with the underlying factors that feed into a successful implementation. The strengths and weaknesses will
    be addressed for the overall strategy. All of these components will be taken into consideration in providing the
    assessment for the market opportunity.


    The Business Opportunity — Scribd’s Big Idea
    From the beginning, Scribd founders had a vision. With their company and it’s website, they wanted to “liberate the
    written word”. This vision honors the authors of written works, and benefits the reader by attracting works of all kinds.
    They want to make it simple to publish and make writer’s work visible and available to the masses. With the addition
    of the Scribd store, Scribd has created a revenue stream that takes them from being a social online publishing site, to
    a potentially very profitable enterprise. It will be a challenge for them to compete strictly in terms of e-commerce, as
    they are challenged by the behemoths of the industry.

    Scribd’s biggest business opportunity, then is to commit to the vision, staying advocates of writers and authors,
    continuing to offer the most innovative and popular platform so that readers can truly enjoy the reading experience.
    Their niche, if you will, is in the quality service they offer, and the pairing of what writer’s need and want, and what
    reader’s desire.

    Scribd’s big idea —
                                         A writer’s dream, a reader’s paradise.



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Company Overview
Scribd was founded in 2007, by John Adler, Jared Friedman, and Tikhon Berstam and is currently the world’s largest
social network publishing site (Crunchbase.com, 2009). The company offers a variety of services that include; free
storage place for personal or professional documents, quick and efficient publishing, and a place for publishers to sell
to consumers (Scribd.com, 2009).

Consumers are provided with an easy-to-use one stop website and social online network. Scribd’s inventory currently
consists of millions of articles, content in 90 different languages, and tens of millions of new readers every month.
Scribd provides the customers with easy document sharing, improved imbedding functionalities and an incomparable
digital reading experience (Scribd.com, 2009). Scribd unique structure in allowing any individual to go on to upload,
download and share a wide variety of literature attracts the masses providing the potential for all current and future
revenue generation. In May of 2009, the company launched the Scribd store where users could go on and purchase
published books and documents, and a month later they signed a deal with the fourth largest publishing company in
United States. Simon and Schuster brought with them 5,000 e-books, and the workings of a great relationship and
opened the floodgates enabling future alliances to be set in place (Crunchbase.com, 2009).




     The image to the right is a screenshot from
      Scribd.com, showing Simon and Schuster
                   featured on the landing page
                              of the Scribd store.




                                                      Exhibit 2.1 Simon and Schuster Featured on Scribd Store
                                                      Source: (Scribd.com, 2009)


Authors and publishers are being provided a profitable revenue source from Scribd, derived from increased consumer
reach, better price control, lowered cost of distribution, and higher volume of general traffic who may convert to
customers upon previewing that writer’s work. The gained exposure, in turn, helps the publisher to reach more readers
and find new writers. This multidimensional balance between free published literature by the millions and the Scribd
store provides a healthy balance that encourages sustainability in the reader/writer relationship. At the same time
it assists in generating viewership, brand awareness, and revenue, all while staying in line with the vision of the
company.

The social publishing network market has vast competition, with several startup companies, and many venture
backed competitors. The introduction of e-books created a new playing field for existing retail websites and
companies scratching at the potentials of the industry. While key competitors concentrated on profitability from sales
and advertising, Scribd supported by The Kinsey Hill Group, Redpoint Ventures, and Charles River Ventures providing
$12.8M in funding allowed them to focus on innovating new technologies and building strong value drivers with both
publishers and readers (Crunchbase.com, 2009). The launch of iPaper in conjunction with establishment of signing
deals with new publishers positively positioned Scribd in the market.

Scribd’s strengths include their ability to meet specific needs of the customers through their iPaper technology, which
include convenient formatting, embedding functionalities, and advanced viewing experience. This technological
feature in line with a customer centric vision is what truly sets Scribd a part from the rest. Another strength of the
company is lower costs for the writer and reader. It is free for the consumer to store, and view purchased material,
as well as uploading and publishing. Unlike Amazon, where you have to purchase a device to view their digital
publications, there are no costs of entry. Weaknesses include the constant consumer concern of copyright issues
along with the longevity of the company and its commitment to the market (Jaclyn Blog). Scribd currently scores low
in brand identity due to lack of publishers and advertising. Yet, with new publication relationships at Scribd’s doorstep



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and a user base growing by the millions, brand equity and awareness are soon to be factors contributing to the
strengths and successes of the company.


Products and Services
Product Description
Scribd is an online document-sharing website enabling customers to upload and download documents in a variety
of formats using its newly developed iPaper technology. iPaper is built with Adobe Flash and fully equipped to work
with Windows, MacOS, and Linux, converting millions of PDF’s, PostScript files, Excel spreadsheets, and PowerPoint
presentations into the best viewing experience on the web. Scribd users can take advantage of the embedding
capabilities enabling bloggers and websites to instantly embed iPaper documents into their work (Scribd.com, 2009).

This relationship graph below demonstrates the different ways that users can utilize Scribd as a service. The
illustration depicts the flow of literature as an ongoing cycle with Scribd as the medium for millions of people to share
with one another.




                    Exhibit 2.2 Scribd Relationship Graph
                    (Source: Kinero Tan, 2009)


The platform that the Scribd founders have created enables a sustainable environment all leading back to the Scribd
website. With an easy-to-use and uncluttered feel, navigating through the millions of uploaded documents has never
been easier. Search features allow viewers to explore by “Books,” “Business,” and “Academics” with categories
ranging from sheet music, newspapers, to brochures and magazines. Once users have created an account, a
community of writers are readily available that share specific interests whether that be short stories or cooking recipes.

Publishers are equipped with a step-by-step process to get through the easy uploading, taking no longer than five
minutes, and a help desk is readily available with quick and efficient responses sent back to the customers personal
message board. Real time changes are available for publishers to modify the way their documents are viewed
(Scribd.com, 2009). A Scribd Copyright Management System (CMS) has been developed along with a set of best
practices tailored to the Scribd website. This system flags any unauthorized works by checking it with the hundreds
of thousands of documents that have already been uploaded, and publishers are able to add their work into the
database. Scribd has an ongoing relationship with other document-sharing websites who have an invested interest in
improving the technology and best practices to protect their writers (Scribd.com, 2009).

Third party users share many of the same capabilities on websites and blogs that have Scribd embedded documents.
They are able to view the document in full the same way that it would appear on the website without having to link
back to the Scribd page. Yet the ability to link back is available and conversion of third party users to Scribd readers
and writers brings the potential for this group to become a piece of Scribd’s dynamic operational layout.

Moving forward the focus will look at the multidimensional aspect of the service that Scribd provides. Specifically, an
evaluation of the customer downloading and uploading experiences and how they compare with those of Scribd’s



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biggest competitor Amazon, will be looked at in detail. The value drivers and what truly inspires the motivation for
consumers to visit Scribd and once again how they compare to Amazon will be analyzed to assist in coming away
with the most efficient strategy to be implemented within the next three years.

This graph indicates the key features that are of most importance to Scribd downloader’s indicating the advantages of
each feature and how they benefit the customer.




      Table 2.3 Feature Advantage Benefit Requirements for Readers and Consumers
      (Source: Scribd.com, 2009)


The Scribd search and suggest feature is clear and concise — guiding users to the exact written documents they
need. With broad categories that are further divided, the search process is made easier for users looking for business
or entertainment. The ease and convenience of the one step sign up and payment ensures users are not wasting time
to get the documents they need (Scribd.com, 2009). All of these elements add up, creating an easy-to-use website.
A display of part of the actual document is shown before purchase to ensure confidence that readers are getting
exactly what they signed up for. Embedding capabilities allow users to easily access Scribd documents without
creating a link to the site, and iPaper embeds are viewed without leaving the owners website or blog. Scribd users
upload and download on the platform of their choice, creating a low cost environment for publishers and readers alike
to share the written word.

Amazon, on the other hand, has a strong website in navigation and search. Yet, the clutter of multiple products gets
in the way of consumers trying to get in and out with a purchase of a product. Amazon customers are forced to
by a $300 Kindle Reader to allow their consumers to view publications (Amazon.com, 2009). This is one area that
distinguishes Scribd’s strength in flexibility of multi platform upload and download.

This next graph displays the service features provided for publishers uploading their work, the advantages in
comparison to Amazon, and how these features benefit the publishers.




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Table 2.4 Feature Advantage Benefit Requirements for Writers and Publishers
Source: (Scribd.com, 2009)


Scribd offers a service that is a publisher’s dream with pricing structure that is all about the publisher first. With a
generous 80/20 split and the capability to set your own prices lures many publishers in. They are empowered with
the ability to make changes to their documents around the clock. Publishers are also able to take advantage of the
millions of hits that Scribd receives every month in increasing potential sales (Scribd.com, 2009).

Amazon is unable to live up to these offerings for any of their publishers. While they are strictly focused on generating
revenue, Amazon sets the prices for their partners and they are limited to publishing just books. The ability for
individuals to go on to change the viewing and downloading options are non-existent. A sense of community
surrounding literature and dedication to the integrity of the author’s work is incomparable to the vision and alignment
that Scribd shares with its publishers.

Value Proposition
After analyzing each potential segment that Scribd is set out to target, a set of value drivers were established aligned
with creating value for the needs and wants of the Scribd user. Using a theory created by Kim and Mauborgne in an
article titled, “Charting Your Company’s Future” these drivers will be compared to where Amazon currently stands as
a competitor, and provide a strategy canvas that will be mapped out to determine the direction that Scribd will take
moving into the future (Kim and Mauborgne, 2002).

The following graph provides the value drivers that are of most importance to the Scribd consumer and how these
drivers compare to Amazon. It also is the inspiration contributing to the development of Scribd’s value proposition.




            Figure 2.5 Scribd Value Curve – Scribd vs. Amazon
            (Source: Kim and Mauborgne, 2002, Scribd team consensus, July 22nd, 2009)


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The majority of the shared pieces on Scribd are free and you also do not need to buy a device to view it (Amazon.
com, 2009). This is one category where Scribd’s non-existent hardware and usage costs drive in audiences by the
millions. The ability for iPaper to convert documents onto multiple platforms is unmatched and one of the main factors
enabling Scribd to be one the biggest players in the industry.

While Amazon has a great reading experience, it is limited to the Kindle platform. With audio features and life-like
reading experience, the actual device is one step above the field (Amazon.com, 2009). Yet, Scribd is still able to
compete in this category due to the innovative technology that enables readers to view converted documents the exact
way that the publishers intended them to be read. Scribd’s platform also has the ability to reach mobile platforms.

Vision alignment with customers is an area that breathes within the culture created by the Scribd founders. This is
truly a place where sustainability of the written word is preserved and an atmosphere for readers and writers to co-
create their dedication and enjoyment for literature is made possible. The variety in literature offered is incomparable in
meeting unique user needs. With a wide variety of readers and writers they have created a service model that makes
this value category impossible to replicate by competitors. Amazon is a company that is strictly focused on generating
revenue and it is understood that they are not hiding it. The headings and margins of their website are loaded with
credit card offers, advertisement banners, Kindle attachments, and it immediately becomes obvious for Amazon
customers that they are strictly looking to sell their products (Amazon.com, 2009). The major difference is that Scribd
customers are not just strictly consumers of the offerings, instead they become a part of the product and service.

Current brand image is low in comparison to Amazon. While Scribd’s tone, look and feel is strong, low recognition
and awareness are a result of lack in big time publishers and advertisements. The recent signing with Simon and
Schuster, arrival of new partnerships, and an effective advertising campaign in conjunction with vision alignment of
consumers, brand image and awareness will soon be a future strength added to the collection.

Many of the value drivers feed into the overall purchase experience. The ease of search and navigation are nicely laid
out. A convenient one step sign up and check out enable a fast and efficient transaction process. An actual portion
of the intended document to be purchased is displayed to ensure that customers are getting exactly what they signed
up for (Scribd.com, 2009). In comparison to Amazon the clutter of “Wish Lists,” multiple devices for the Kindle reader,
and product on top of product deters users from getting though the purchase experience. It also discourages future
purchases from the site (Amazon.com, 2009).

The combination of these factors assisted in establishing a value proposition and the creation of a new value curve.
After understanding the current frame in which Scribd and competitors in the industry currently operate in, many of
the same value drivers have been chosen as a focus for the future strategy of this company, along with a number of
factors that guide them into creating a gap, to set them even further apart from the pack (Kim and Mauborgne, 2002).

Scribd’s Value Proposition

Scribd is the premier innovative global publications resource that fosters and inspires a culture
where all writers and publishers thrive, thereby expanding its customer base and creating profitability.

The following graph indicates the new value curve created in alignment with the discoveries formulated of the current
state of the industry that Scribd operates in. Many of the same values were chosen along with new drivers that will
assist in guiding decision making in day-to-day operations. The first seven categories were existing drivers, and last
five categories in the graph will be new focal points for Scribd (Kim and Maugborne, 2002).




                                                       11
              Figure 2.6 Scribd’s New Value Curve – Present vs. Future
              (Source: Kim and Mauborgne, 2002, Scribd team consensus, July 23rd, 2009)

Multiple platform capabilities are a key value driver allowing the overall use and distribution of the
Scribd service. While this currently is a strong point in Scribd’s current model, they must continue to stay innovative
in this field. Specifically, steps need to be taken towards creating an effective and useful iPhone application, bringing
them one step closer to identifying themselves with individuals who enjoy Amazon’s Kindle Reader. This category is
vital in attracting the masses and competing with others who already have a large share of the market.

Eventually Scribd must create a portable reading device in order to thrive. Continuation of product usage on other
platforms is still key, yet the versatility of allowing consumers the option will assist in taking away an even larger
share of the market. This combined with the variety in literature that Scribd offers will differentiate them, and the
continued push in providing a better reading experience including adding audio features for all platforms will blow the
competition farther away.

The alignment and vision with customers and meeting unique user needs are areas that are also currently strong.
Although Scribd must continue to ingrain this image into their users’ minds as they grow and add new offerings. It is
important that they stay true to the community of users and remember why readers and writers came to begin with.
Growth in variety of literature is a core piece in meeting unique user needs. As the partnerships of trade publications
and other media alliances form the alignment with user needs will become stronger.

Moving into the future Scribd must look to generate new revenue streams by establishing new partnerships with
educators, more publishing companies, and even branch out in creating alliances with the dying use of newspapers.
All additions to the Scribd store will enhance the relationships with the reader/writer community and ultimately the
overall purchase experience with readily available material. This will truly be the one stop shop for all things written.
With the addition of more publishers and other media publication partnerships, brand identity will grow, and the
following will increase by the millions.

Customer relationship management systems are currently nonexistent. While Scribd’s set of best practices assist
them with copyright issues and taking down repeat articles in a database with tens of thousands of articles, the
CRM’s moving into the future must be utilized much more effectively. Copyright protection is vital in aligning
themselves with publisher needs, and without an effective system, this will push many of the serious writers away.
CRM’s also should be assisting in keeping track of past buyers and users encouraging repeat purchases, tailoring
offers that appeal to each unique user. With millions of users already within the Scribd community CRM’s will help
Scribd better understand their customers in continuing to co-create value in use.

By following the strategy canvas that was created and using it as a reference to guide everyday business decisions,
it will help each individual in the company towards the overall goals that have been set in place. The visual
representation will help employees see where they currently stand and motivate them towards where they want to be
(Kim and Mauborgne, 2002).




                                                          12
Brand Identity
The founders of Scribd have a vision. They want to “liberate the written word — to turn everyone into a publisher and
create the best possible reading experience on the web and mobile platforms.” (Scribd.com, 2009) Their vision is an
important part of their brand identity. It identifies them as a company with strong values, and an understanding of the
importance of benefits versus features with their customer in mind.

The Scribd services provide an easy and efficient way for any writer to publish, and a flexible platform that makes
reading on a screen a much more pleasurable experience than it had been before iPaper technology. The service also
includes a customer store, where e-books and other electronic publications are made available for purchase.

The brand identity for Scribd currently consists of their name, logo, website, public relations efforts and word-of-
mouth referrals. There are Scribd Twitter and Facebook pages, but the content and layouts are cursory and the use of
these as social media tactics in their current state of development is, most likely, negligible.

 The company name, if promoted well, could be a strong element of their brand identity. It is classified as an invented
name, derived from the word Scribbled, but also fits the description of an evocative name, which evoke a positive
attribute or feeling (Best, 2009). Current brand names that are also classified as evocative and have considerable
mindshare among U.S. consumers are Yahoo!, Google, and Amazon.

                                                  The logo mark depicts a simple icon of a document floating on a
                                                  multi-colored circular background. It is clean, simple, and easily
                                                  recognized. It is too soon for significant brand equity to be
                                                  associated with this logo. We believe the logo should be improved
                                                  upon before a new promotional campaign is launched.

The website is a very important element Scribd’s brand identity. The site design is simple, clean and is easy to
navigate. Search functions are easy to find and use, and both readers and publishers can find what they want on the
homepage. It has a professional, yet friendly look, and appears to be patterned after well-known, consumer-friendly
sites such as Netflix. User familiarity also aids in ease of use. The traffic to the site is exceptional for such a new
company. Scribd claims more than 60 million unique users visit their site each month and more than 50,000 new
documents are uploaded daily (Scribd.com, 2009).

Top-level navigation includes Home, Explore; Community, Partners, and Store. Explore leads to a search landing
page, with suggested books and publications and a left hand secondary level navigation to aid users in choosing
areas of interest. Community leads to a landing page where users can create their own groups on the site. Beneficial
marketing messaging and promotion of Scribd culture and importance of community are nonexistent, and would
enhance brand identity and competitive differentiation significantly.

Brand Identity Promotion
The Scribd brand identity has not been promoted sufficiently. Team research failed to find marketing communications
other than articles and editorial reviews, a Facebook page and a Twitter page.

There has been a limited amount of search engine optimization (SEO) and search engine marketing (SEM) put into
place. When searching for e-books on booth Google and Yahoo, Scribd does not appear in the first 10 pages of
findings, however they do appear sixth on the pay-per-click sponsored links on Google Search. Scribd does not have
a sponsored link on Yahoo Search.

Scribd is a young company in an industry whose competitors include established book online retail giants. Going
forward, Scribd needs a strong value proposition, and a clear business strategy that creates a unique space for
them in the e-book industry. From there, they will benefit greatly from a marketing and communications program that
promotes brand awareness and differentiates them from competitors such as Amazon and Google based on points
of parity and points of difference. A proposed marketing communications plan follows in Section VII.

Strengths and Weaknesses
Scribd provides a service that is growing in correlation with its potential market size. As the use of computers and
Internet access continue to grow, the demand for a service that is capable of efficiently delivering real-time documents
and books is being more and more widely accepted. With Scribd’s iPaper technology, embedding capabilities, and
a captivated audience participating in uploading and downloading, and all the buzz surrounding Scribd, 60 million
viewers a month have already been fascinated enough to at least take a peek at Scribd.com (Scribd.com, 2009).



                                                     13
    With a pricing structure that has a leg up on their competitors, Scribd owns a vision that is in line with what publishers
    are looking for. They also have created an atmosphere where writers can feel as if they have ownership to the way
    their work is displayed allowing for real time changes in pricing and formatting.

    Yet, currently Scribd has a minimal share of the market with competitive monsters including Amazon, Docstoc, and
    bookstores with online retail sites, such as Barnes and Noble. Besides the recent launch of the Scribd bookstore,
    Google Adsense placed advertising is the only steady stream of revenue to sustain growth. Technology barriers
    including copyright issues, staying ahead of rapidly occurring platform innovations, and highly competitive product
    innovation from competitors with big time funding.


    Conclusions
    With a combined $12.8 million in private funding, Scribd already has a hold of the reigns with all the necessary
    resources at hand (Crunchbase.com, 2009). They now need to focus in on harnessing this captivated audience,
    and continuing to build on the values that they have already created in their service offerings. iPaper technology
    and alignment with user needs is what allowed them the current success they hold. Yet, product innovation and
    technological breakthroughs are a necessity to enable Scribd to continue to thrive. The creation of a portable reading
    device is a necessity in enhancing the Scribd reading experience and also making them a more competitive player in
    the industry.

    Scribd must find ways to generate revenue by establishing partnerships with multiple media publications while still
    maintaining integrity to the written word and strong relationships with current and future consumers, writers and
    publishers. As the number of products continue to grow along with innovative technological offerings, they must
    maintain the uncluttered, focused, and easy-to-use website that set them apart from their competitors to begin with.
    With millions of users, an efficient CRM system must be set in place to tailor to unique individual user needs.

    Scribd is capable of altering the way that the e-book industry currently operates, and possesses the seeds to
    potentially forever change the world’s reading experience all together. The structure and thought process that
    was fostered by the founders of Scribd incorporated the core competencies of a physical bookstore, distribution
    of e-books, online social networking, and the ultimate reading experience creating a model for the roots of an
    uncontested market space (Kim & Mauborgne, 2004). The innovative iPaper technology has put them at the forefront
    in terms of online viewing experience. Scribd’s multi platform capabilities and pricing structure, in conjunction with
    a social network which attracts the millions in tune with co-creating value in achieving Scribd’s big idea will assist in
    battling with the giants in the industry and deter and slow down new entrants from competing.




SECTION 3
TECHNOLOGY ASSESSMENT

    The technology assessment exists to introduce and describe the technology that Scribd uses in its day-to-day
    operations. Scribd’s only product is electronic documents, so there isn’t any hardware to speak of in terms of their
    technology. However, according to Scribd.com they were one of the first companies to launch an online reader for
    their online documents.


    Formal Product Description
    According to the Guardian.co.uk website, e-books have been around since 1971, the initial aim being to provide
    literature to the masses in a non-profit, mass-education effort. However, since then e-books have become a major
    for-profit business and are expected to generate $114 million in revenue in 2009. An e-book is essentially a book that
    is published in an electronic format. E-books are produced in many different formats and can be read across many
    different platforms and reading devices.

    Scribd is a company that sells e-book along with many different types of electronic publications. Scribd.com serves
    as their online social publishing network as well as is where their e-publication store is hosted. Scribd allows users
    to upload their documents for either download or sale. When downloading documents, depending on the level of
    security chosen by the publisher, they can either be retrieved as a downloadable PDF or viewed in Scribd’s proprietary
    iPaper online document viewer. If viewed in iPaper, documents will simply load in the flash-based iPaper viewer for
    instant, accurate document viewing. From iPaper, unless prohibited by the publisher, the document can be saved
    onto the users computer/reading device or printed out for a more paper-based, traditional reading experience.

                                                           14
Product Technology
To understand where Scribd’s marketing plan needs to go, it is important to understand the differentiating technology
that Scribd has to offer. iPaper is Scribd’s revolutionary flash-based document reader that allows all of the documents
uploaded to Scribd, to be read on any online web browser. This section provides an introduction to iPaper and to
Scribd.com, as the site that created the iPaper technology. Also, this section covers competing technologies, the
lifecycle of an e-book, technology partners, cost factors and drivers, and disruptive technologies.

Scribd is an electronic document sharing site and electronic document marketplace. Scribd’s is primarily a website
where documents of almost any digital format can be uploaded and shared across the Internet, anywhere or anytime.
The uploaded documents are then accessed via Scribd’s iPaper online, flash-based document reader. iPaper
has support for over 18 electronic document formats, including PDF, DOC, and PPT. iPaper is functional on any
flash-enabled web browser and therefore is supported in every operating system that has a GUI. iPaper allows for
immediate viewing and sharing of documents as well as the option for making documents available for download,
or download for a fee. iPaper is also an embeddable technology so that any blog publisher or website owner has
the option to embed their documents directly into their websites.

The technology of the iPaper document reader is what can help Scribd become the standard for online electronic
document reading. This is due to the fact that iPaper’s cutting edge technology allows for exact translations from
document format to what is displayed on screen. What this means is that, unlike the Amazon Kindle, any special
formatting or graphics that are part of a document retain their intended format regardless of the platform they are being
viewed on. This is promising for the future of Scribd because textbooks and scientific manuals could become a huge
part of their business, having the ability to accurately represent the information in those types of publications is vital.

As previously mentioned, iPaper provides a reading experience that is accessible for anyone with an Internet
connection, a GUI-enabled operating system, and a flash-enabled browser. iPaper is also available on the iPhone
and the T-Mobile G1 phone (i-stuff, 2008), with these technologies combined there are practically no consumers in
Scribd’s target market that couldn’t be reached with their service. With a versatile technology like iPaper, the future
is very promising for Scribd. However, iPaper is only as strong as the storage system on which their content is saved
and served from.

To ensure that the documents that are uploaded to Scribd.com retain integrity and have adequate redundancy, Scribd
uses Amazon Simple Storage Service S3 (Bentley, 2008). Amazon S3 is a cloud-based storage system that has
advanced, customizable security features, and its buy-as-you-go pricing policy allows for infinite scalability (Farnsworth,
2009). These features create a secure, robust storage system for all of Scribd’s publishers’ intellectual property.

The following figure illustrates the protocols for both file uploads and downloads.




                                                        15
            Exhibit 3-1 Example of Scribd.com’s file download/upload flow
            (Source: Jason Rippy, 2009)



Scribd has a vision that hopes to “liberate the written word — to turn everyone into a publisher and create the
best possible reading experience on the web and mobile platforms.” (Scribd “About Us”, n.d.) Existing as an online
flash-based document reader, iPaper will help to achieve this vision. Adobe, inventors of the Flash Player, note that
the Flash player is installed on “99.0% of Internet-enabled desktops in mature markets (US, Canada, UK, France,
Germany, Japan).” (Adobe, n.d.) This fact is integral for Scribd’s success as Flash is required for online document
viewing and is beneficial to Scribd users because there isn’t any proprietary software to install in order to utilize
Scribd’s library.


Product Platform
The main components of Scribd’s product platform are the proprietary iPaper reading interface, Adobe Flash and
modern web browsers. All of Scribd’s content is readily available for reading through the iPaper interface. As long
as the end user has a modern GUI web browser with Adobe Flash enabled and up-to-date, they can access Scribd
content.

One potential problem for Scribd’s platform is that iPaper is not an open-source software project and if there are
problems with the reader, it is up to Scribd to find and fix all of the software bugs. This is only an issue at the
moment because Scribd employs fewer than 30 people and may not be able to respond as swiftly to technical
issues. Converting iPaper into an open-source project, while lowering the potential entrant boundaries, would create
a tremendous community of participants that could potentially take the technology to the next level. After all, the
technology isn’t Scribd’s business, content providing is. As long as Scribd continues to sign new publishers, content
will be king and iPaper won’t be a competitive advantage as much as it will be a vehicle for their content.




                                                       16
Competing Technologies
In order for Scribd to impress their offerings into the mainstream; there are several obstacles they must first overcome.
Various technologies offer an obstacle for Scribd to overcome in an effort to impress their offerings onto the
mainstream. The competitors are not only competing in product downloads, but also in external document reading
devices. The electronic document business is a matter of providing distribution for material and Scribd’s competitors
offer solutions similar to Scribd and some solutions that Scribd can’t offer currently. This constant battle for technology
advancements makes it hard for the consumer to differentiate their advantage over competitors, causing the
consumer to lack brand loyalty.

Amazon Kindle
The Amazon Kindle is an e-book reader that uses the revolutionary e-ink display to emulate the book reading
experience in a handheld device. The Kindle can read e-books purchased from Amazon in the proprietary Kindle
document format. Amazon currently has over 300,000 books that are available for immediate download on the Kindle.
As well as the Kindle format, the Kindle supports viewing of the world newspapers in addition to displaying content
from over 5,000 blogs. (Amazon “Kindle”, n.d.)

The Kindle utilizes Sprint’s EVDO cellular network to retrieve any content for the Kindle. This was established in an
effort to create an actual standalone device that wouldn’t need a Wifi connection or a personal computer (Frucci,
2007). There is no additional charge for the EVDO connection, it is complimentary for the life of the device. The Sprint
EVDO network has a maximum speed of 3.1mbps download and 1.8mbps, this facilitates downloading of Kindle
books in 60 seconds or less (Frucci, 2007).

The chart below shows the various stages that Scribd and Amazon’s products take when purchased.




              Exhibit 3-2 Side-by-side comparison of Scribd’s and Amazon’s user download flow
              (Source: Liam Flaherty, 2009)


Docstoc
Docstoc is an electronic document sharing website. They are similar to Scribd in that they allow anyone to publish
electronic documents; they offer support for 10 document formats (Docstoc, n.d.) compared to Scribd’s 18+
compatible formats. Also, as with Scribd, Docstoc has an online flash-based document reader that all of their content
can be viewed through. Due to the reader being flash-based, Docstoc is compatible with any operating system with a
GUI that has an internet-connected web browser.




                                                       17
Technology Partners
Scribd started in 2007 with no major publishing partners. As of 2009 they have deals with many major publishing
houses such as Random House, Simon & Schuster, Workman Publishing Co., Berrett-Koehler, Thomas Nelson and
Manning Publications (Guardian.co.uk, 2002). Scribd is utilizing these relationships to offer rich content to its users
and its also used to prevent competitors from offering similar materials.

According to a June 2009 Business Week article, Scribd is “in talks with other big publishers and is working to make
its content available on the Kindle and Apple’s iPhone.” (Ante, 2009) Both of these ideas would represent major
opportunities for Scribd. There are an estimated 20 million iPhones currently in use and an estimated 1.4 million
Kindles will be in use by the end of 2009 (Arrington, 2009), this represents a huge technological opportunity for
Scribd. If Scribd could use both of these devices to distribute their material, they would be looking at 21.4 million
mobile devices that could access their library of electronic documents.

FAB Analysis and Comparative Assessment




  Table 3-3 Scribd Comparative Assessment and FAB Analysis
  (Sources: www.amazon.com, www.scribd.com, www.docstoc.com, 2009)



Figure 3.4 shows that Scribd stands up to its competitors quite well in all of the categories mentioned. Regarding
cost, Scribd has free as well as paid material. Docstoc offers only free materials and the Amazon Kindle offers sample
chapters to Kindle owners. In terms of platform, Scribd and Docstoc both have a significant advantage; both employ
a flash-based online document reader. The Amazon Kindle is at a large disadvantage here as you need either their
proprietary reader or an iPhone running the Kindle application to view their content. Selection is a weakness for both
Scribd and Docstoc as Amazon, according to its website, has over 300,000 e-books currently available for the Kindle.
Docstoc doesn’t publish the number of e-books they have available for download and Scribd also doesn’t publish
the number of e-books they have available for download or purchase. Scribd’s largest competitive advantage is
that, as previously mentioned, their iPaper reader supports over 18 document formats. Docstoc can only support 10
document formats. Lastly, the Kindle only supports its proprietary Kindle file format and as a result cannot compete
with Scribd in this area.




                                                      18
Cost Factors / Drivers
The main cost driver for Scribd.com is primarily bandwidth. Since Scribd is in the business of selling e-books and
doesn’t manufacture a product, there are no associated manufacturing cost drivers. According to the Amazon Simple
Storage Service website, there are 3 costs associated with Scribd’s activities. The first being storage which Scribd
pays $0.15 per GB for monthly. Scribd pays $0.10 and $0.17 per gigabyte for upload and download transfers. Scribd.
com notes that their average file contains 81,678 characters which translates to approximately 80 kilobytes. To
upload, store and allow downloads for 600 average files, Scribd incurs a cost of approximately $0.02 per month. This
cost will be higher depending on how many files are being uploaded and download; however, the relative cost is still
extremely low on a per document basis.

The costs that could not be estimated here are any costs associated with the exclusive licensing agreements that
Scribd has established with publishers.

Technology Life Cycle
Scribd’s iPaper requires either a flash-enabled Internet browser or a compatible mobile device (e.g. iPhone or T-Mobile
G1). The average file size is 80 kilobytes as noted in our ‘Cost Factors/Drivers’ section below, any internet connection
would be sufficient for handling such a small amount of bandwidth to load Scribd documents. This flexibility ensures
that any internet user will be able to access Scribd’s library of online content.

Product Life Cycle
Scribd is in the market of selling e-books and e-books, due to their nature, have no life cycle. Being in a digital format,
there is no degradation over time and e-books could potentially last forever. Since the documents that Scribd hosts
can be read on almost any personal computer, and we are assuming the personal computer has a 5-year life cycle,
the only upgrades the consumers should be concerned about are the upgrades to keep their Flash reader up-to-date
and compatible with Scribd’s technical specifications. Adobe Flash can run on almost any personal computer setup,
so consumers need not worry about purchasing the fastest, most cutting edge computer to make use of Scribd’s
services.


Evaluate Potential Disruptive Technologies
Scribd announced their Scribd store feature on May 18, 2009 (Claburn, 2009). Essentially, Scribd has created a
store where publishers can publish any of their own works, set their own prices, and ultimately keep the majority of
the profit, 80% to be exact. Upon launching this feature, Scribd established an e-book marketplace unlike anything
that had been launched prior. Despite larger competitors having large budgets, Scribd released a feature that is truly
disruptive.

By providing larger shares of profit and letting the publishers set their own prices, Scribd created an extremely
desirable place for publishers to upload and sell their literary wares. Along with providing a desirable marketplace,
Scribd also provides a tremendous analytics system for publishers to track their sales. For example, when someone
adds your document to their list of “favorites”, Scribd warns you via a daily e-mail digest. In addition, Scribd sends an
e-mail to the publisher when any of their documents are sold (Savikas, 2009). These features compliment the Scribd
store and together prove to be a very disruptive technology. Its not as if features similar to the store and the analytics
mentioned above haven’t existed prior, its that Scribd has made all of them work together to create an extremely
cohesive technology set.


Conclusions
Scribd is presenting an extremely interesting platform for e-books to be read and sold upon. iPaper paired with
Scribd’s content library makes them a leader in the e-book field. The flexibility of iPaper allows almost every internet-
enabled computer in the world access to Scribd’s library of content. With 60 million unique visitors per month (Scribd,
“About Us”, n.d.) and the introduction of the Scribd Store in 2009, Scribd is helping to revolutionize the e-book
industry. If Scribd is successful in getting their content available on the Kindle, they will have the mobile e-book market
covered by being offered on mobile devices, dedicated e-book reader (Amazon Kindle), and any internet-enabled
computer. Technology coverage like that makes Scribd a very dangerous and viable e-book provider.




                                                       19
SECTION 4
MARKET ANALYSIS

    The purpose of the Market Analysis is to identify the market segment with the greatest potential for Scribd. From
    this analysis and selection, the maximum opportunity and potential new markets are defined. The selection of the
    targeted segment is based on tangible as well as intangible benefits of the Scribd service offerings, the attractiveness
    of the segment based on value drivers, and analysis of the viability or profit and growth potential of the segments.
    Although Scribd serves both writers and readers alike, for the purposes of this marketing plan the focus is on potential
    customers that are most likely to download free or inexpensive publications from the Scribd online library and to
    purchase the products available through the Scribd store, defined in this document as Readers or Customers.


    Potential Market Segments
    The potential market segments chosen for analysis and consideration are the Internet-savvy college student, the
    alternative online consumer, and the career-oriented professional. The customer profiles, or characteristics, of these
    three segments are described in the following section, Segment Analysis.

    The information used in to define target segments has been a compilation of data from Mintel, the Diffusion Company,
    Alloy Media + Marketing, Bureau of Labor and Statistics and Simplymap. The compilation of data from these reports
    gives Scribd their three segments target market numbers. The three segments do not account for all of the total
    online publishing/reading service market; however it does represent the majority of early majority, innovators users of
    Scribd’s market.

    The following three paragraphs disclose the process to define and describe our market segments in more detail.

    The Internet-savvy college student: To find the target market for this segment we used a report from Alloy
    Media + Marketing that gave us the total number of college students with in the United States. The segmentation
    dividers that were used to find the target market were: college students that use the Internet, early adopter, early
    majority, buy book online, and e-book purchasers.

    The alternative online consumer: To find the target market for this segment we used a report from Simplymap that
    gave us the total number of people age 18 – 49 that have an internet connection or regular access to the internet in
    the United States (Geographic Research, Inc., 2009). The segmentation dividers that were used were: people who
    have purchased online in the last 12 months (Mediamark Research & Intelligence, 2008), early adopter, and early
    majority (Moore, 2001).

    The career-oriented professional: To find the target market for this segment we used a report from the Bureau of
    Labor and Statistics to get the total number of professional business people in the United States. The segment
    dividers used were Internet usage, early adopters (Moore, 2001), people that said they would prefer to read an e-book
    (Allen, 2008).

    To determine the viability of each targeted segment, this section contains charts showing potential revenue, three
    year’s sales potential for each segment and the Segment Potential Table. The data gathered to determine the market
    potential of the targeted market segments came from articles and surveys from Harvard Business Review, Mintel, the
    Diffusion Company, Alloy Media + Marketing, Bureau of Labor and Statistics, Simplymap
    and Mediamark.

    In addition, the value drivers that support the Scribd offering were determinants in selection of potential market
    segments. To summarize, consumers most likely to become Scribd customers have a need or desire for published
    books and other resources; a tendency to purchase online; use the Internet for networking, researching and
    purchasing; and a preference to align with companies whose corporate values match their own. The specific value
    drivers applied to our analysis are discussed in the following section.

    Digital publication, or the e-book, is a recent development in the book industry — the industry was launched in 1998
    (Roush, 1999). New products tend to be purchased earlier on by early adopters and some early majority consumers
    (Mason et al, 2007). In addition, those that shop online tend to be more innovative, which is a characteristic of the
    early adopter (Mason et al, 2007). Each of the segments consists of consumers with the characteristics of early
    adopter, and with some crossover to early majority consumers. Early adopters are attracted by high-risk, high-
    reward projects, and because they envision great gains from adopting innovation, they are not very price sensitive.
    The early majority is not looking for revolutionary changes, but is motivated by evolutionary changes that bring about
    productivity enhancements (Slater et al, 2007).


                                                          20
Segmentation Analysis
The Segmentation Analysis defines and describes each of Scribd’s potential market segments with a customer
profile and a hypothetical persona based on that profile. To analyze the potential market segments by segment
attractiveness, customer value drivers were determined, and charted to factor segment attractiveness, followed by a
summary table to contrast the core need, demographics, psychographics, value drivers, and price sensitivity for each
of the three segments analyzed, segment attractiveness chart and maximum opportunity.

Customer Profiles

The Internet-savvy College Student
This segment is defined as all students attending U.S. colleges and universities. There are approximately 2,554,738
potential customers based on these criteria. Most of these students are between the ages of 18 and 30, and
are spending an average of $702 per year on textbooks. A very high percentage of those attending colleges and
universities are early adopters and early majority consumers. The highest percentage is 25% of males in post-
secondary schools consider themselves early adopters. Based on that figure we can assume as high as 80% of
upper-education students are either early adopters or early majority consumers. This group consists of heavy Internet
users, who also participate in social networking, online entertainment and online purchasing. About 70% of this group
owns a laptop. All students are required to have access to textbooks, and most will purchase them. This group is also
more price sensitive than our other segments, and would prefer a used textbook, if it were less expensive, than an
e-book (Allen, 2008).

                                         Meet Claire.
                                         Claire is single and 21, and working on her undergraduate degree in
                                         education. Claire’s parents are paying her tuition and board,      but Claire
                                         is working part-time to cover the rest of her expenses. And since she’s a
                                         senior and soon to graduate, Claire is also interested in putting a little money
                                         aside to pay for her expenses after graduation. She is considering getting
                                         her graduate degree right away, but has her feelers out to see if there are job
                                         opportunities after getting her undergraduate degree.

                                         Claire is very bright, and for the most part, enjoys school. She likes to try
                                         new things, and considers herself pretty progressive. She would probably
                                         consider herself an early adopter, but, truth be told, may fit more into the
                                         early majority consumer group.

                                        Like most of her friends, Claire is a very savvy Internet user. She has a
      Facebook account, gets most of her music from iTunes, and enjoys seeing the YouTube videos her friends are
      constantly posting. She also spends a great deal of time on her phone, texting friends throughout the day.

      When the each term starts, Claire always has sticker shock when she realizes how much textbooks cost. Over
      the last 3 years she’s spent around $2000 on books and supplies, but has managed to save some money
      buying used books and sometimes selling them back to the student bookstore. She feels she would be open
      to buying e-books online if the price was comparable to used book costs, especially when she’s in graduate
      school, as she’ll have to work more, have less time and can see that buying books online and getting them
      downloaded immediately could be a time saver.

The Alternative Online Consumer
This segment is defined as consumers who a more discerning and tend to make decisions based on their own unique
set of values. They are conscientious in their choices and decisions regarding the companies they support, the lifestyle
choices they make and search for products that best suit their individuality. Decisions, in general, are driven by their
strong sense of independence, however can be influenced by those they perceive as being like-minded, or fitting
their selected subculture. Based on an amalgamation of consumer products that would appeal to this segment, the

2009) Brashear et al stated “with the Internet, the younger cohorts are the “computer generations” and will be more
likely to purchase online than older consumers. Online shoppers are younger, possess greater wealth, are better
educated, and spend considerably more time on the Internet.” (Brashear et al, 2009) Early adopter to early majority




                                                      21
characteristics apply, as these consumers are open to or seeking better products and services and are willing to
try them out. (Mason et al, 2007) This segment is limited to those who have Internet connections. The Internet
connection criteria allow us to focus on consumers who are more comfortable with Internet transactions, are exposed
to Internet searching and possibly social networking. This criteria also, then, allows us to factor in demographics and
psychographics of the Internet purchaser. There are 23,377,728 potential consumers who meet the criteria for this
market segment. The average spent on publications annually is $336.00

                                           Meet Tyler.
                                           Tyler is a young architect. He earned his architecture degree at a state
                                           university with an excellent School of Architecture. He’s been at the same
                                           firm since graduating, and chose to work for a smaller firm that specializes
                                           in LEED certified housing and small commercial buildings because he feels
                                           it’s the responsible way to practice architecture. He’s committed to creating
                                           high quality, beautiful buildings.

                                          Tyler is 28 years old, and engaged to his girlfriend of four years. They live in
                                          a nice, but not extravagant, condo in a close-in city neighborhood. When
                                          not at work, Tyler and his girlfriend spend time with friends who have similar
                                          lifestyles and values. Neither of them is materialistic, but would rather spend
                                          their discretionary funds for life-enriching experiences and events. They also
      both love to read, and are interested fiction as well as many non-fiction topics.

      Tyler considers himself to be fairly innovative and open to new products and experiences. But he also feels
      he’s fairly particular, and therefore likes to take some time to evaluate products and services before adopting
      them. He’s a heavy Internet user, and does a lot of searching, connecting and communicating on his laptop and
      iPhone. He also has a Facebook page, and a Twitter account to stay in touch with friends and family.

      Part of his process when selecting a product or service is considering the corporate values of the product’s
      company. He likes to know if they are good corporate citizens, concerned about their customers and provides
      a positive purchasing experience. If he finds they have values similar to his or a corporate culture he would feel
      good about supporting he’ll even pay a little more.

The Career-oriented Professional
This segment is defined as those who hold managerial and professional positions, specifically within business
services, public and private education, health services, engineering, engineering management, and social and
legal services (U.S. Census Bureau, 2007). For the year 2007, the number of jobs meeting in those classifications
is 82,507,000 (U.S. Census Bureau, 2007. The Business Reader segment consists of males and females equally,
ages 22 to 62 (Hecker, 2001). The majority of this segment lives in or near the cities they work in. The majority has
post-secondary educations, and most of them have undergraduate degrees, graduate degrees or professional
certifications (Hecker, 2001). Those in the early stages of their careers are single or married with no children; however,
most successful executives who are in mid- or late-career are married with children. There are 9,838,960 potential
consumers that meet the criteria of this segment. The annual average dollars spent on books related to their jobs or
careers is $140.00.


                                          Meet Angie.
                                          Angie is doing well in her career. She’s 32, is recently married, and has no
                                          children. Angie has always been an over-achiever. Her job as a Marketing
                                          Manager at a medium-sized and successful manufacturer is a not the end
                                          all, but a step in the right direction. Her goals are to learn all she can in her
                                          current position, moving up to a possible Director of Marketing position there,
                                          and then make the move to a larger player in a related industry. Angie finds
                                          she needs to stay current and continuously learn about her industry and her
                                          audiences. She frequently reads books and other materials that will help her
                                          be successful as an employee, manager, and to become more of an expert
                                          in marketing and her industry. Since she has little time, she prefers online
                                          search and download as a means to get the information she needs quickly
                                          and with little hassle.



                                                       22
      Angie also has a nice home for entertaining, and likes it to be well furnished. Shopping online works well for her
      for most things, even brands she has seen in the stores. She likes to shop for price and service, and really likes
      the convenience of buying from her laptop.

      She and her husband travel when they can, and research their trips thoroughly before they go. They also love
      their road bikes, and do a bit of touring as well. They are planning on having children in the next few years try
      to dining out and going out with friends at the end of a long week. Their social networks help them connect
      with people, let them know what’s going on in their busy world and plan events with friends. They also take
      advantage of sites that recommend entertainment options, home furnishings, music and other interests. Angie
      is very comfortable surfing the Internet, social networking and taking recommendations from like-minded
      strangers.

The following section describes the key value drivers relative to Scribd and Scribd’s potential customers.

Value Drivers
Value drivers of importance to our analysis include Product Value Drivers, which relate directly to the features,
advantages and benefits of the Scribd service offering and Customer Value Drivers, which are defined below.
Understanding the customer value drivers is key to the success of any company or brand.

Product Value Drivers
The key product value drivers used in our analysis of potential market segments are further defined in this section.
These are the most attractive features, advantages and benefits of the Scribd service.

These product value drivers are an easy-to-use, well designed website; multi-platform uploads and downloads; online
social network and community; more pleasurable viewing and reading; quick and free global access; and social
community.

Customer Value Drivers
According to Robert Harmon and Greg Laird, “Customer value drivers are the decision-related attributes that are
perceived by the customer to be the most important to the choice process.” (Harmon & Laird, 1997) The key
customer value drivers used in our analysis of potential market segments are further defined in this section. Economic,
product performance, supplier, buyer motivations and buying situation value drivers were used to evaluate the
potential of each of the three potential market segments.

Delivered initial cost and flexible pricing structure are the most valued of all the of the economic value drivers. There
are no delivered initial costs, such as hardware, or shipping and handling with Scribd’s offerings. Flexible pricing refers
to both the pricing strategy with authors, where they can set there own prices, and the ability to download free and
very inexpensive publications, and the option to buy a section at a time of many of the available publications. Scribd’s
currently has no delivered initial cost. The Scribd pricing structure attracts more writers and publishers, which, in turn
creates more variety and availability of publications available to the customer.

Performance value drivers include features that allow iPaper documents to work on multiple operating systems.
Additionally, Scribd’s iPaper format creates publications that most closely mimic the look of printed publications.
Scribd customers are not limited by a single reading platform, and enjoy a digital reading experience that is most
similar to the printed version of the book they are reading.

Supplier value drivers are those that refer to the company itself, such as its values, culture and the perception of
its credibility. Shared values are an important supplier value driver for customers. Scribd’s vision and philosophy, to
support creators and writers, make publications available to everyone, and to create the best possible digital reading
experience are values that can be with consumers and partners. The credibility of the source is also a key supplier
value driver. Scribd’s website, concern regarding plagiarism, strong and growing partnerships, and safe ecommerce
infrastructure can lend the credibility consumers are looking for.

The leading buyer motivations value drivers for a social online publisher include a strong sense of community.
Consumers can identity with Scribd as a company and the community of Scribd’s loyal customers. Further, they
have the opportunity to build their own communities on the web site. (Scribd.com, 2009) Having unique needs met
is another important value driver for potential Scribd customers. This is accomplished with the diversity of writers and
publications available on the Scribd site, and the services offered to writers and readers.




                                                       23
The more important value drivers in the buying situation value drivers are availability of materials and a positive
purchasing experience. A positive purchasing experience refers to the entire process a consumer goes through,
including use of the website, ease of search, ease of purchase, and customer service.

After defining and describing our three potential market segments we begin to compare and contrast those segments.
To do this we are using a contrast table to compare characteristics, demographics, and buying behavior.

Segment Comparison and Contrast
The table on the following page (Table 4-1) summarizes and contrasts the core need, demographics, psychographics,
value drivers, and price sensitivity for each of the three segments analyzed.




   Table 4-1 Segments and Summary of Criteria Used to Analyze Each Segment
   (Source: Adapted from Robert Harmon lecture slides, Portland State Pure Innovation Model, data compiled from Mintel,
   the Diffusion Company, Alloy Media + Marketing, Bureau of Labor and Statistics and Simplymap.)



                                                             24
Segment Attractiveness
The following figure, 4-2, the Segment Profile Curve, charts the relative importance of each of the value drivers for
each potential market segment.




         Figure 4-2 Segment Profile Curve
         (Sources: Marketing 464 Team 1 analysis of customer value drivers)

This chart indicates which segment closely aligns with Scribd’s value drivers.

Figure 4-3, which follows, shows the relative segment attractiveness of each of the potential market segments. It is
based on weighted averages of ratings of importance of each value driver for each segment. The weighted average
of each segment represents the attractiveness of that segment to Scribd’s service offerings.




                 Figure 4-3 Segment Attractiveness based on Weighted Averages
                 (Source: Team analysis of customer drivers based on Robert Harmon lecture slides, 2009)




                                                            25
The segment attractiveness graph shows that the Alternative Online Consumer would be the most attracted to
Scribd’s services.

Market Potential
The following figure shows the 3-year potential revenue estimates for each of the targeted segments using
TAM/SAM estimates.




      Figure 4-4 Scribd Potential Revenue by Segment
      (Source: Adapted from Robert Harmon lecture slides, Portland State Pure Innovation Model, data compiled from Mintel,
      the Diffusion Company, Alloy Media + Marketing, Bureau of Labor and Statistics and Simplymap.)

According to the 3-year estimated revenue figures, the Alternative Online Consumer has the most revenue potential
in all three years. The Internet-savvy Student takes second place in potential earnings with the Career-oriented
Professional lagging behind. The growth rates for the segments, in that same order, are 173% for last year with the
forecasted growth rate to flatten out to 100% over the next three years for the Alternative Online Consumer (Shatzkin,
2009). The growth rates for Internet-savvy Student will be around 25% for the next three years. As for the Career-
oriented Professional the growth rate is forecasted to be around 7% according to a Mintel report.

We used our research to find the total buyers that represent each segments total buyer numbers. We then were
able to make a reasonable estimate for each segments average purchase price by using other resources such as
Amazon.com. We took an average of 30 random educational books offered on Amazon to get the purchase price for
the Internet-savvy college student. We then took this average and multiplied it by 9 to get the yearly purchase price
for this segment at $702. We used two book based on the requirement that be registered in three classes within a
term-based school to be a full time student. With students taking three classes a term, and three terms in a year, that
equates to a total purchase of around nine books a year. As for students enrolled in a semester-based school, the
student needs to register for, four classes to be a full time student. With two semesters per scholastic year, students
will be required to purchase around eight textbooks per year. Using an average of books purchased; from both the
term and semester schedules, we arrived at 9 textbooks purchased per year.

For the Career-oriented Professional average purchase price we took the average of a sampling of the business
publications from the Scribd store to come up with $14. We made a reasonable assumption based on an interview
survey conducted by Jason Rippy that asked 30 business professionals how many job or career related books they
read a year. The finding from this survey allowed us to find that this segment would buy 4.5 books a year to give them
yearly expenditure of $140.

For the Alternative Online Consumer, we took an average sampling of 30 books currently offered from the Scribd
store define the average purchase price per item. As for yearly purchase frequency, we made a reasonable estimate



                                                            26
based on reports from Mintel and Mediamark. With the data from the reports the number of books bought per year is
around six times per year. This creates an average yearly purchase expenditure of $336 for this market segment. We
estimated the remaining segment to have a low average purchase price due to the fact that we believe they would be
using the site more for the free offerings and purchasing inexpensive offerings very infrequently.

Market Access
An important factor is selecting a target market is their accessibility in marketing to them. With all the potential market
segments analyzed in this document accessibility via the Internet is high.

The Internet-savvy College Student segment is easy to access. They spend a great deal of time on the Internet and
can be targeted through social media, tribe-oriented communications, online advertising, and SEO/SEM tactics.
Further, we can access them through on-campus communication tactics as well.

This Alternative Online Consumer segment is easily accessed via the Internet. A traditional campaign would need
to be large scale and comprehensive to have any effect, and would prove cost prohibitive for a start-up with limited
capital, however, a non-traditional campaign that is contains integrated social media and Internet marketing tactics
could be very successful in targeting the Alternative Online Consumer. There may also be guerilla type marketing
tactics that would work with this group, further discussed in Section VII.

This Career-oriented Professional segment is also easily accessed. They spend a great deal of time searching and
reading online, and would be prime targets for online advertising, SEO/SEM research tactics, and other campaigns.
Further, they have many vertical market and industry related resources, so we could target them both traditionally,
print advertising and direct mail, and at industry specific tradeshows and online associations.

Maximum Opportunity
Upon reviewing our research and data using the market sizing and forecasting model provided in class, (Harmon,
2009) we have come to the conclusion that the Alternative Online Consumer segment represents the maximum
opportunity for Scribd in the current market with $563 million. The next highest segment includes the Internet-savvy
College Student that represents a market potential of $200 million. The Career Oriented Professional Segment falls
into last place among the three targeted segment markets with a $135 million market potential. To reach these market
values, our team pulled data from a variety of key sources including industry reports from Mintel to economic data
provided by government agencies. The table below represents identifies the total market opportunity for Scribd three
different segments. The three segments 16 percent of the total population within the United States, with a $735 million
market potential.

The following table shows total number of potential customers, the average purchase price of an e-book from Scribd,
and the total annual revenue potential for each segment.




Table 4-5 Segment Potential
(Source: Data derived from data compiled from Mintel, the Diffusion Company, Alloy Media + Marketing, Bureau of Labor and Statistics and
Simplymap, analysis by Jason Rippy, 2009)




                                                              27
Target Market
In the Business Overview, Scribd’s big idea was put forth as the provision of an “place” and service (social online
publishing website) that enables “a writer’s dream, a reader’s paradise.” The business opportunity for Scribd requires
a breakaway from their biggest competitors by creating a blue ocean business environment and focusing on the
Scribd offering as a service. The success of that strategy requires the selection of a target segment that would prefer
not to patronize the large mainstream corporate leaders, nor be defined by their product offering. This is an important
determining factor in selecting the target market for Scribd.

After reviewing the research and analysis completed for each of the potential target markets, including demographics,
psychographics, size of market, market growth and revenue potential over three years, and after taking into
consideration of blue ocean strategy discussed above, we have determined the target market for Scribd.

Scribd’s definition as a service is what factors most heavily in our determination of the best target market for Scribd
in its early stages. Scribd needs to take the position of Customer Intimacy Leadership. For Scribd, this involves
establishing a reputation which exceeds customers’ expectations, involves the customer in value creation, customizes
to the individual customer, can “sense and respond”, appreciate the lifetime value of the customer, uses customer
loyalty as the primary competitive barrier, has an emphasis on intangibles, and provides industry leading customer
service. (Harmon class lecture slides, 2009).

The Segment Profile curve, in the Segment Analysis section, illustrates that core values that align with Scribd are
highly valued by The Alternative Online Consumer. The Alternative Online Consumer also rates highest on the
Segment Attractiveness graph, also in that same section.

Derived from the findings above, the selected target market for Scribd is The Alternative Online Consumer.


Potential new markets
In the immediate future, with regard to the Alternative Online Consumer, Scribd would do well to create additional
partner agreements with the major publishers. In addition, they need to either partner with a company to provide a
reader device, or develop their own. Additionally, there are new market opportunities with additional segments, and
we would propose both of the potential market segments, the Career-oriented Professional and the Internet-savvy
Student, and in particular the Internet-savvy Student, should be considered for future market expansion.

The Internet-savvy Student is a market with great potential for Scribd. By partnering with Colleges and Universities, as
well as the major textbook publishers, Scribd could be very attractive to higher education students, who are primarily
looking for best availability of textbooks and other required published materials at reasonable price, and secondarily,
convenience and ease of search. In mid July of 2009, Harvard announced it will publish 1,000 digitized books on
Scribd. (ars technical, 2009) This can be viewed as a move in the right direction. Harvard is the kind of partner who
can attract similar partners and textbook publishers as well.

Global opportunities exist in all of the proposed segments, with the same qualifiers, most significantly, Internet
availability. Based on their current online shopping habits, specific European, South American and Asian countries are
the highest potential target geographic markets.

Brashear et al reported the following:

      European and Asian online shoppers average almost twice as many purchases as North American online
      shoppers, and growth in online shopping is faster in the developing markets than in the developed economies.
      Total e-commerce sales in Japan, South Korea, China, and India were $51 million in 2006 and are expected to
      grow to $115 billion in 2010. (Brashear et al, 2009).


Conclusions
Scribd offer a service that will appeal to certain consumer segments based on intangible as well as tangible benefits.
Three market segments were selected for analysis using data, research and our analytic findings. Product and
customer value drivers, along with consumer characteristics and traits, were used to derive segment attractiveness.
Three year sales forecasts, TAM/SAM estimates and market growth were used to determine the maximum
opportunities for each of the potential market segments.

All segments were made up of early adopter or early majority consumers, who had consistent Internet access and did
information searches and product reviews online. All segments also were comprised of people who had the need or


                                                      28
    desire to read for work or pleasure. This was determined by estimated average number of publications read per year,
    and the inherent need for books and publications based on career choice and college status.

    With regard to market potential, revenue forecasts and market size, the more attractive segment for Scribd is the
    Alternative Online Consumer. This group also better aligns with Scribd value drivers and the Segment Attractiveness
    score for this group (see Figure 4-2) is higher than the other market segments. This audience will be more responsive
    to Scribd’s vision, services, and unique diversity of publications. Scribd is a service, and should take the position of
    customer intimacy leadership, where positive relationships with customers create lifelong customer loyalty.


SECTION 5
COMPETITOR ANALYSIS


    Industry Dynamics
    The competitor analysis for Scribd will focus on two main competitors: Amazon and Docstoc. Scribd and its
    competitors will be analyzed through Porter’s Model, competitive factors, industry competition, and industry
    benchmarks. This analysis will give a snap shot of where Scribd currently stands against competitors. It will show
    what areas Scribd needs to improve in, as well as what areas they are strong in.

    Porter’s Model
    The Porter’s Five Forces model is included in this marketing strategy for the purpose of determining any potential
    threats Scribd faces within the market it currently serves. The model will analyze Scribd’s current position in the
    market, as well as its current and potential competitors. Since the introduction of Scribd, more and more book
    retailers have adopted the idea of having digital books available online. Increased competition, the introduction of
    pricing for digital books, as well as innovative platforms to upload and download books have all provided a basis for
    this model.




                               Exhibit 5-1 Scribd First Year Porter’s Five Forces Model
                               (Adapted from Porter, 1980)


    Existing Industry Competition
    Since the introduction of digital books, there has been an increase in the number of businesses that are tapping
    into this market — providing services for authors and digital publications for readers. Currently, there are two main
    competitors Scribd faces in this industry: Amazon and Docstoc. A high level of competition exists among these three
    businesses because they are all attempting to gain a large market share of e-book readers. In a survey conducted
    by Mintel (2004), the results revealed in 2000, 11 percent of adults 18 and older bought books online. In 2003, that
    number grew to 18 percent, as physical bookstore purchases decreased by three percent (Mintel, 2004). A conclusion
    can be made that book retailers will expand into the e-book industry as they learn it is a growing and is becoming a
    lucrative market. The e-book industry is growing 100 percent per year (Springer, 2009).

    Amazon has proved to be one of Scribd’s most threatening competitors. Although the Kindle offers an entirely different
    reading experience because of the platform, it is perceived as a threat to Scribd’s potential customer market. Amazon


                                                            29
currently provides over 300,000 books for their Kindle platform, and has an average of 65 million unique visitors to
the website each month (Amazon.com, 2009). To compete, Scribd needs to introduce more products or services to
counter Amazon’s advantage. An advantage, and disadvantage for Scribd is their pricing structure. Currently, Scribd
allows authors and publishers to set their own prices and to receive 80 percent of all profits made from their book
sales (Scribd.com, 2009). The authors can choose to set their prices lower, given the higher percentage of return on
the asking price. Publishers may not choose to be as competitive as individual writers, which in many circumstances
gives Amazon an advantage as they set their own prices. Amazon is discounting many of their books, such as those
on the New York Times bestseller list to under $10.00 (Amazon.com, 2009). Amazon sets the price of the books,
while only giving a 35 percent share of the revenue back to the authors (Switch11, 2009).

The second major competitor for Scribd is Docstoc. Docstoc currently does not charge visitors to download books
posted on their website; however, they soon will. We assume Docstoc is also creating a store much like Scribd’s,
where they will also charge readers to download books but it is known what their pricing structure will be. Docstoc
has a narrow focus with types of books offered, which include only business and educational publications. This
makes Docstoc less of a threat to Scribd. It is important to note that an assumption can be made that although
Docstoc does not offer all of the same products as Scribd, they can, and may, change their strategy and expand their
categories of books and publications, thus going after a larger share of the market.

To stay competitive within the market, companies have had to become more innovative and provide greater depth
and value of products and services. Competitors will constantly be searching for ways to update their technical
platforms to make the experience of buying and reading e-books and e-publications a more desirable choice. All key
competitors may be forced to maintain low prices and expand their technological capabilities. For example, with the
Kindle, Amazon provides a digital platform that is not only portable, but also is audible (Amazon.com, 2009).

Threat of Potential Entrants
E-books have recently become an alternative for readers who normally buy printed books. With the emergence of this
new product offering, Scribd faces a large threat of potential entrants. Scribd came out with digital books for free in
2007, and only opened their e-commerce store in May of 2009 (Snyder, 2009). In that period of time, several smaller
companies have come out with similar service offerings. It is the larger, previously established companies, with brand
names that are well known that provide the greatest threat with regard to sales of digital publications.

Sales of books and e-books online don’t have the same kind of overhead as brick-and-mortar stores. Because
of the significantly smaller start-up costs, it is easier for businesses built around their websites to open a business,
and creates greater potential for multiple competitors to spring up. Scribd had an original start-up cost of $12,000
and continually expanded investments to allow the business to grow (Gonzalez, 2007). Also, because of the Scribd
business model, which favors both authors and readers, an assumption can be made that new potential competitors
will see that starting a business in the e-book industry is financially feasible.

Another potential threat for entrants is online book retailers of printed books. Scribd’s offering can be identical to
printed books, as publications uploaded with iPaper look just like the original book or publication, but in digital format.
The result is a reduction of market share for these brick and mortar bookstores. According to a Mintel report (2004),
“There are approximately eight books sold in stores for every one book sold online and an estimated 38 percent
of online users purchase books online.” If market share decreases, they may be inclined to offer the same services
as Scribd to maintain their market share. Large online bookstores such as Barnes & Noble, Powell’s Books, and
Borders who have the infrastructure to sell digital books, are also a significant threat to Scribd. Barnes & Noble has
already established an application used on smart phones and wireless mobile devices (Trachtenberg & Fowler, 2009).
According to Jeffrey Trachtenberg and Geoffrey Fowler (2009), “Barnes & Noble has established an online store to
sell books in electronic format, and has also entered into a strategic partnership with Plastic Logic, a firm that makes
electronic book-reading devices.”

Threat of Substitute Products
In addition to competition from other book retailers, Scribd faces a real threat with substitutes. A current threat as
a substitute product is the Amazon Kindle. Currently, Scribd only offers their books in digital format that can only
be read on a computer screen and smart phones. Amazon has introduced a platform where the book or library is
portable and can provide a more interactive experience with the reader. The Amazon Kindle also allows the user to
download the book and take advantage of an audio feature.

Scribd could stay competitive by either creating an innovative product similar to Kindle, that encourages the reader
to continue using Scribd’s products, which seems to be contrary to their vision, and/or enhancing the services they


                                                       30
currently offer on their website to make it more appealing to read on a screen, such as a laptop or other computer,
rather on a handheld device.

Other substitute products Scribd currently faces are books on DVDs and MP3 players. Downloading a book in audible
format has become incredibly popular. Many customers are reverting to this substitute product because of their
desire or need to multi-task. For example, they can listen to a book and work out at the same time. According to the
National Federation for the Blind, “Approximately one-million people in the U.S. are legally blind and approximately
50,000 Americans lose their vision every year… The sales growth and popularity of digital audio players will help fuel
audio books market” (Mintel, 2004). Scribd needs to be aware there is a need for a substitute product that is audible.
To keep market share, Scribd should introduce a feature similar to this on their website, which allows readers to listen
to a book.

Bargaining Power of Customers
The bargaining power for customers is very high, primarily because they have opportunities to buy the same product
from multiple stores. Scribd encourages authors to set low prices by offering a large return on profits. If Scribd cannot
beat competitors’ prices, the reader can easily go to another source to buy the same book. However, it is important
to know that Scribd has created this bargaining power for customers. They have encouraged authors to set low
prices based on the price elasticity of the market. Therefore, with the encouragement of Scribd to maintain low prices,
customers simply support this business model because it ultimately benefits them in the end. Again, however, larger
commercial publishers may not be as willing to discount prices, even with the generous revenue split.

Bargaining Power of Suppliers
There are two main suppliers that Scribd has leveraged to grow their business. The first supplier is individual authors
that have supplied their work without the help of a publishing firm. The bargaining power for suppliers is very high
because these suppliers are the only source that supplies the product to the reader. Scribd has allowed the bargaining
power of suppliers to be their top priority. The authors have a lot of bargaining power because they have the ability to
set their own prices for their books and also have been given an 80 percent profit (Scribd.com, 2009). They also have
the choice of whether or not they would like to offer the book for free. Scribd has given these authors a huge amount
of bargaining power because they are their biggest vendor. The site has proven to produce a large amount of hits
without the charge for books; however, Scribd has been able to see how much traffic has been drawn to this website
once they have allowed authors to charge for their books because customers are in high demand for mainstream
written materials.

The second main supplier is publishers. Scribd has just begun to do business with major publishing companies and
has given them a large amount of bargaining power as well. They have allowed the publishers to choose the price
for their books with the same terms for individual authors. A conclusion can be made that the reason why Scribd has
given major publishing firms the same amount of bargaining power as individual authors is because these books that
will be uploaded on the site will attract an enormous amount of customers. Mainstream books will allow the website to
become mainstream. It will increase the market share for Scribd and will also expand the target market segment. It is
important for Scribd to give a lot of bargaining power to their two main suppliers because they are the ones that drive
traffic to the website and maintain readership.

Porter’s Five Future Forces
For the second year, the e-book industry is expected to gain more entrants that will further competition with Scribd.
iTunes and Google will have successfully implemented an online book stores for readers. Large retailers selling printed
books is going to be a huge threat for Scribd as they figure out a way to upload their books online and make it easy
for readers to download. The market segments will remain the same for Scribd, but there is a risk they will lose market
share with these segments as competitors increase.




                                                      31
                     Exhibit 5-2 Scribd Second Year Porter’s Five Forces Model
                     (Adapted from Porter, 1980)

For the third year, there is a possibility Docstoc will no longer be in business as they learn their market is too
segmented and business and educational readers can get the same reading materials through Scribd. At this point
in time, large book retailers who sell printed books will have successfully joined the e-book industry as they master
the technology used to upload and download books. The bargaining power for customers will rise even more as
consumers are exposed to more choices when searching for a book online.




                     Exhibit 5-3 Scribd Third Year Porter’s Five Forces Model
                     (Adapted from Porter, 1980)


Sources of Competitive Advantages

Price
Scribd may be able to create a competitive advantage due to their unique pricing structure. Authors receive a much
larger percentage of profits than they normally would if they sold the book through other retail outlets, they are willing
to sell their book for a lower price because they still make a large profit off sales. Amazon sets the price for books
sold on Kindle platforms, and provides little room for the author to set the price. Scribd has placed itself in the perfect
position because they are able to create the greatest customer value by charging a low price but not low enough to
make the customer believe the writing is not worth reading.



                                                         32
iPaper
Scribd has perfected its digital platform that allows easy access to upload and download digital documents. Unlike
Kindle, where the customer first has to buy the reading device and wait for delivery, Scribd allows the customer to
instantly download books. iPaper does not require users to download additional software programs in order to digitally
read books. Instead the program is a click away from receiving a book online. This program has also allowed the
process of uploading written works from authors to be very easy and less time consuming than others.

Open to the Public
Scribd has maintained a strong competitive advantage because they give everyone the opportunity to publish their
work on the website. Customers are attracted to this website because they are not only exposed to mainstream
writings, but are also exposed to unique, individual writers. The beauty of this website is that anyone can be published
and not just those that go through the formal process of getting published through a firm. Because Scribd allows
everyone to write, they also have a large amount of product offerings. For example, blogs, books, lyrics, and poems
can all be posted on this website for the public to see. Scribd has gained a competitive advantage because they have
opened the website to the public and have shown their main goal is not to make profits, but to spread the excitement
for reading.

Competitive Barriers

Technology
Currently Amazon has increased competition with Scribd with their new portable, digital reading platform: Amazon
Kindle Reader. Scribd will eventually encounter a barrier that is caused by technology. The company needs to find
a way that can make the reading experience more interactive for the reader besides clicking through digital pages.
Amazon has invented a device that reads like a book and can download a book within 60 seconds (Amazon.com,
2009). Technology will eventually become a huge competitive barrier for Scribd as more companies adopt a similar
platform as iPaper. Scribd is currently ahead of the technological curve compared to Docstoc because they have
created a program that is hassle free for uploading and downloading books. However, once companies, such as
Docstoc, create programs similar to iPaper, what is the next technological move going to be for Scribd to stay
competitive?

Plagiarism
Plagiarism has come to be a competitive barrier for Scribd as users have figured out they can upload other peoples’
works and receive profit off of those sales. Authors are becoming more hesitant to use this program because they
face the possibility of people plagiarizing their work. For example, if a book is put in digital form for the first time, it is
much easier for people to copy and paste their work onto another website and start earning profits. Amazon has been
able to overcome this problem because the book can only be uploaded on the device which does not have a copy
and paste function. Also, Amazon reviews all books uploaded so they are able to see where the content is coming
from (Amazon.com, 2009). Currently Scribd is trying to break through this competitive barrier by encouraging readers
and authors to report writings that could be plagiarized and have created a program that scans all saleable content
(Slattery, 2009); however, with over 35 million words uploaded, Scribd is chasing a problem that is moving at a much
faster rate than they are (Scribd.com, 2009).

Commitment to Market
The last competitive barrier Scribd faces is their commitment to the market. Scribd is brand new to the market, and
many concerns have been voiced in terms of credibility and reliability. Every new company faces the problem of
needing to build trust with the customers before they can become successful. Right now, authors are unsure of how
long Scribd is going to stay in business, so they are hesitant to post their documents if this website is not reliable.
An assumption can be made that authors are hesitant to post their work because they do not know how credible
the site is.

Consolidation
The potential for a Scribd merger or acquisition is moderately high. In addition, Scribd is currently seeking a
partnership with Amazon to use the Kindle as an additional platform for downloading (BUSINESS WEEK). An
assumption can be made that an acquisition by Google or Amazon might also be a possibility in the future.




                                                        33
Partnerships/Alliances
Scribd’s primary partnerships will be major publishers. Scribd has recently partnered with Random House, Simon &
Schuster and other major publishers (Snyder, 2009). Scribd has negotiated with publishers to have selected books for
free, and others for sale. The free offering will drive traffic to the website, and pull the readers by, in essence, seeding
the product. The publishers will bring in a greater market share for Scribd as they expand their current market to
include mainstream readers. According to Chris Snyder (2009), “Publishers hope to boost both print and e-book sales
through e-book sharing and word of mouth.”

Other major partners listed on Scribd’s website consist of the following companies:

      Environmental Health Perspectives
      Harvard
      University of California
      Fox Business
      Ford
      The MIT Press
      Duke Medicine
      The Atlantic Monthly
      Marriot
      Ford
      Datamonitor
      Dublin Chamber of Commerce
      Workman
      World Economic Forum
      Berrett-Koehler Publishers
      The New York Times
      TechCrunch
      Baltimore Police
      Carnegie Endowment for International Peace
      Cato Institute (Scribd.com, 2009)

Value Chain

There are three steps in the value chain that Scribd completes to gain a competitive advantage. With their popular
website and user-friendly platform (iPaper) in place, Scribd first begins collecting written material from the public. They
encourage anyone who has passion for writing to upload their work. The written documents, in this case, are the
inventory or input of materials.

The second step Scribd completes to add value to the product is publishing it into a readable format for consumers.
This step can also be considered outbound logistics, as it takes the finished product and gets that product to the
customer. Marketing on the website includes featuring books people are currently reading, books for exploration, and
exclusive first looks (Scribd.com, 2009). Authors do not need to manage this section of value chain activities.

The third step in the value chain is provision of reader and author services. This includes a system they have
developed to curb plagiarism. Toward that goal, if someone other than the author is selling a book, Scribd immediately
removes it from the site. Site maintenance and improvements, and customer support are key services that add value
for customers as well.

The last step Scribd completes in the value chain is marketing and sales of the product, such as featuring
publications. The site also has a free book search function for readers. In addition, Scribd has significant public
relations history, and the numerous articles published about the company drive traffic to the website.

Business Ecosystem
This table illustrates all of the customers, suppliers, competitors, and partnerships that work together to create an
ecosystem for the e-book industry. This table summarizes the core factors that allow the e-book industry to be
successful.




                                                       34
                                     Exhibit 5-4 The Scribd Business Ecosystem
                                     (Adapted from Magniez, 2009)

Three main areas make up the business ecosystem that supports the industry for e-books: Core Enterprise, Extended
Enterprise, and the Outer Business Ecosystem. The first, Core Enterprise, is comprised of the direct suppliers
and channels that allow this industry to flourish. Publishers, authors, and media companies make up the suppliers
because they provide written material that can be sold and distributed over the Internet. The distribution channel that
is used allows information to be passed via Internet. The Internet encompasses the websites that booksellers use to
upload and download books for readers.

The second section of the business ecosystem is the Extended Enterprise. This section consists of direct customers,
which include Scribd’s three main market segments: Internet-savvy college students, career-oriented professionals,
and alternative online consumers. They use the services offered and build traffic for the website.

The last section that makes up the business ecosystem is the Outer Business Ecosystem. This section includes
investors, partners and stakeholders that are involved in the e-book industry. Scribd’s partners and investors are listed
in this outer portion. Also within this section are Scribd’s current competitors. These are classified as stakeholders.

All three areas work together to make up the business ecosystem for e-books. Each factor listed within the model has
a stake in the e-book industry. If one factor changes, other factors will change within the ecosystem as they all work
off of each other to create a successful industry.


Competitive Factors Mapping
Key Competitive Factors and Strategy Canvas
Competitive factors are determined based on what the authors of this paper feel customers look for when buying an
e-book from Scribd, Amazon, and Docstoc. Economic, performance, supplier, buyer motivation, and buying situation
value drivers were used to rate the companies on the how much they offered these drivers to customers. It also
shows a comparison of how each company is doing competitively within the market.

After the competitive factors have been chosen, each company is rated from a scale of one (lowest offerings) to
five (highest offerings). These weights are then plotted on a Strategy Canvas, which create a value curve for each
company. It is a visual representation of how each company is doing for each value driver from the customers’
perspectives. This Strategy Canvas is used to figure out competitors’ strategies for how they stay competitive
within the market, as well as how they determine where they need to improve to offer more to the customer (Kim &
Mauborgne, 2002). Below is a description of what each competitive factor examines within each company.




                                                      35
Delivered Initial Cost
The delivered initial cost looks at additional costs the customer encounters when entering into the market and does
not consider the cost of the books yet. It examines accessories or membership fees that need to be bought in order
to read the book.

Flexible Price Structure
Price is a key factor for consumers, when deciding to make a purchase and who to purchase from. If one company’s
e-book provides a very similar reading experience and searching experience as all the others, the deciding factor will,
most likely, be price. Consumers continuously seek a product that has high perceived value at a low cost.

Works on Multiple Operating Systems
The website needs to be user-friendly for the customer. Ease of use is a key advantage. A website that is simple,
easy, and fast will ensure the best results for authors that upload their work. Companies should be competing to find
the easiest way for authors to upload their works because they know this industry can be easily substituted by the
traditional methods of printing.

Shared Values
The philosophy that breathes within the community is dedication to the written word. The more dedicated publishers
are to writing and the creative process, the more likely they will provide a positive experience and environment for the
author. If a company is only concerned with maximum revenue, easy sales of mainstream books and publications, it
doesn’t value its contributors and their contributions, they run the risk of alienating authors, who may go elsewhere.
By co-creating the experience with their customers and partners, companies can create customer intimacy and
shared value.

Credible Source
If a website is notorious for people gathering and plagiarizing written pieces, a customer is less likely to use that
service. Also, if the website lacks safety in regards for plagiarism and the purchasing process, the website’s reputation
may be tarnished. This could lead customers to purchase elsewhere. Platforms that make it easy for readers to
download and authors to upload, also make it easy for plagiarism to occur. A website with the best security measures
that monitor and react quickly to copyright infringement gain a huge competitive advantage. Authors require a safe
place to share their work.

Sense of Community
This competitive factor looks at the networking opportunities and the culture each company creates through the
buying and selling of e-books. It looks at the level of opportunity consumers have to interact with authors and share
pieces writings with peers, family, or colleagues.

Unique Needs are Met
Customers look for specific writings that will fulfill a certain need or want. This competitive factor examines the variety
of literature each company offers to its customers. Specifically, it examines if the company has a limited or large
amount of product offerings that can expand market share.

Product Availability
Consumers seek a retailer that can provide literature that fits within their interests. It is a competitive advantage with
the online consumer segment to have a large variety of publications. All three competitors supply different focuses
on the type of reading material they offer. Amazon focuses on mainstream books published by large publishing firms.
Docstoc supplies reading materials that fit in with business and education. Lastly, Scribd supplies all different types of
reading materials ranging from mainstream, business, educational, or purely entertainment.

Purchasing Experience
Readers are switching over to e-books due to the ease and speed of purchase and immediate download. The Scribd
website, along with Amazon’s website, is easy to use, easy to search and easy to purchase from. Amazon can
download a book to the Kindle within 60 seconds (Amazon), which has given them a competitive advantage over
other e-book suppliers. Readers can substitute the digital book for a printed book, but that requires travel time to and
from the store, shopping and purchasing, which may involve waiting in line. The online printed book ordering process
also takes little time, but delivery date is dependent on shipping and handling.




                                                       36
The table to the right is used to
compare Scribd, Amazon and
Docstoc with regard to how much
they offer the customers for each
competitive factor. It summarizes each
competitor’s current offerings to the
customer for each factor listed. It is
used to determine the weights for the
Strategy Canvas following this table.




                                         Table 5-5 Competitive Factors — Customer perspective
                                         (Source: Adapted from Chan & Mauborgne, 2002)

The Competitive Factors table is used to score each competitor based on how much of each competitive factor they
offer to the customer. This table takes qualitative data from the table above and turns it into meaningful numerical
data that can be used to rank each competitor based on their amount of offerings. The weights are used to create the
Strategy Canvas following this table.




                                                     37
            Table 5-6 Competitive Factors Weighted Averages — Customer perspective
            (Adapted from Chan and Mauborgne, 2002)

This graph illustrates visually how each competitor varies in terms of competitive factors. The Strategy Canvas takes
the weights from the table above and creates a value curve. This is a visual representation used to show where each
company is exceeding and lacking in certain areas.




         Figure 5-7 Competitive Factors Comparison
         (Adapted from Chan and Mauborgne, 2002)


Conclusions from Strategy Canvas
From the customers’ perspective, Scribd has the strongest competitive advantage in terms of weighted averages.
However, they need to focus their efforts on creating a more enhancing and interactive digital experience for the
customer. This will enhance the purchasing experience. This is one of the most problematic areas for Scribd because
the technological industry is rapidly changing and new entrants with bigger and better technologies are gaining way
over companies that have been in the industry longer. Scribd needs to find a way to make the purchasing experience


                                                     38
easier for the customer in order to gain a competitive advantage over Kindle. Scribd is very competitive in the market;
however, there are many areas in which the product can improve in. The customer seems to be most interested in the
technology the product has, and dominates the field in purchasing experience as well as variety in literature. These
are important aspects Scribd should focus strongly on because the ability to substitute Scribd with other products is
very high.

Examining the value curve, it is clear Scribd has the potential to be the market leader for e-books, but there are some
problematic areas they need to attend to. Scribd needs to work on plagiarism to build credibility. This will attract a
large market share as well as large publishing firms who are looking for an outlet to reach millions of readers. If Scribd
can master the art of building credibility, they have a strong chance of maintaining or expanding their customer and
supplier base.

Competitor Profiles

AMAZON

Headquarters and facility locations, number of employees:
Amazon Headquarters is in Seattle Washington. Amazon employees 20,700 employees worldwide and participates in
over 34 different industries.

Products, market reach:
Amazon web site offers millions of books, music, and movies these items account for most of Amazons sales
revenue. Amazon has started to break away from it’s core business of media and has stated to move into selling auto
parts, toys, electronics, home furnishings, apparel, health and beauty aids, prescription drugs, and groceries. Amazon
has also made it easy for the consumer by allowing the purchaser to purchase with a one click shopping basket,
Amazon has also made it possible for the consumer to download books, games, MP3s, and films to their computers
handheld portable devices, and smart phones, including Amazon’s own portable reader, the Kindle. (Hoover.com, 2009)

Amazon has worldwide reach due to It is the largest e-commerce company and the leading online shopping site
in the world. The company’s retail sites include Amazon.com, Amazon.ca, Amazon.de, Amazon.fr, Amazon.
co.jp, Amazon.co.uk, Joyo.com, and www.endless.com. Amazon.com operates retail websites and offers online
programs that allow third parties to sell on their website. The company also provides services for third party retailers,
marketing and promotion services, as well as web services for developers. In addition the company also operates
other websites such as www.a9.com, www.alexa.com that enable search and navigation. Amazon also has other
numerous website like www.imdb.com which is a comprehensive movie database. Amazon has also purchased
The company operation are divided into two main segments: North America and International. The North American
division handles online retail operations in the United States and Canada, while the international division manages
online retail operations in the UK, Germany, Austria, France, China, and Japan. The company has established long
term relationship with a number of strategic partners such as America Online, Yahoo, Excite, Netscape, GeoCities,
AltaVista, @Home, and Prodigy.

Growth Strategy
The main growth strategy includes constant device updates to improve the reading experience and break the barrier
between reading a digital book and a traditional book. They improve their technology continually to enhance the
reading experience and maintain a competitive advantage. Amazon continues to provide more services to the reader
with each device update in order to attract more customers to grow the company.

Market Position, Reach and Marketing Objective
Amazon is the current technology leader in wireless reading devices. They have continually improved their product
to create a better digital reading experience. The company strategically positions themselves to have a continually
expanding library through Amazon.com. Amazon’s market reach is global and universal.

Technology and Innovation
Amazon has reinvented the reading experience through their wireless reading device, the Kindle. Although they are
not the only company to produce this type of device, Kindle is leading the industry with their newest device called
Kindle DX. The new device is thinner and lighter than their old device, and has advanced antiglare screen, along with
page turning abilities to make for a more traditional reading experience (Amazon.com, 2009).




                                                       39
Financial Position
Amazon had operating revenue in 2008 of $19,166,000 which was up from their 2007 operating revenue of
$14,835,000. The company also has a positive cash flow of $985,000. Docstoc is a venture-backed company with
current funding around $4,000,000. Most of their funding is through Rustic Canyon Partners (Crunchbase.com, 2009).

Strengths and Weaknesses
Amazon digital books and publications strengths include innovative industry-leading technology, an easy-to-use
device, easy access to e-books through their already established large e-commerce site, and the financial backing
and infrastructure of Amazon. A weakness of Amazons Kindle is the start up cost for the reader, which includes the
cost of a Kindle in addition to the price of e-books. Amazon struggles to lower the cost of a Kindle device to the
customer, due to the high cost of production.

DOCSTOC

Headquarters and facility locations, number of employees:
Docstoc’s headquarters is located in Santa Monica, Ca; which employs seven employees (Hoovers.com, 2009)

Product
Docstoc offers a service very similar to Scribd, but company, its library and leadership is much smaller. Docstoc
concentrates their service to cater to business professionals. Docstoc offers free business and legal documents,
along with resumes, creative, and educational documents. Docstoc is known for their blogosphere, embedding, and
mainstream media. (Scribd.com, 2009)

Growth Strategy
Docstoc’s growth strategy is to expand their document database and user data base, both new and continuing users.
Docstoc also is in the process of innovating new technology to improve their viewing, formatting and embedding
functions to differentiate their site from competitors. These technology advancements make their site a more
desirable space to view and store professional documents.

Market Position, Reach and Marketing Objective
Docstoc has geared their market position towards being the professionally lead document storage website. The
company’s objectives include continuing technology innovation to support the needs of educators and business
professionals, along with improving readership. Docstoc’s market reach includes business professionals, educators,
students, and some leisure readers.

Technology and Innovation
Docstoc has improved their technology to have better embedding functionality. The company is constantly improving
their platform to compete with iPaper. They also supply technology advancements through API and widgets.
(Docstoc.com, 2009)

Financial Position & Partnerships
Docstoc is a venture backed company with current funding around $4,000,000. Most of their funding and industry
expertise comes from Rustic Canyon Partners with $3,250,000 raised. Other investors include Scott Walcheck,
Brett Brewer, Robin Richards, Matt Coffin, Crosscut Ventures (Crunchbase.com, 2009). The company reported
revenues of $300,000 in 2008 (Hoovers.com, 2009). The company primarily makes its revenue through advertising,
and has not yet begun to obtain revenue through document sales or memberships.

Pricing and Cost Structure & Distribution
Docstoc is currently a free space to store your documents and published work. Docstoc is a self distributing site
where you can obtain others work, or self distribute your own. Although Docstoc is currently free, it is presumed by
our team the site could open a store to sell documents and other published materials in the future.




                                                     40
Table 5-7 Company Strategy, Brand Position, Growth Strategy, and Market Strategy by Competitors
(Source: Jaclyn Tiedemann, 2009)


Conclusions from Company Strategy, Brand Position, Growth Strategy, and Market Strategy
As seen from the table above the three industry leading companies’ strategies all contain “increasing their library
content available to their consumers”, though each has a different focus with regards to how they want to attract
more customers. Scribd is looking more towards building relationships compared to Docstoc selecting the business
section for their target, while Amazon is trying to turn the Kindle into a commodity. These unique focuses contribute
to how each of the three companies have positioned themselves within the industry. Through a growth and market
strategy of continually innovating their technology, Scribd hopes to continue building relationships to help become
the go to site for individuals with unique needs. With a strategy to improve technology to enhance their storage and
protection capabilities, Docstoc expects to position themselves as a professional website for business users. As for
Amazon, their strategies align with providing the most available content to consumers with the highest quality mobile
reading platform distribution. This gives Amazon the brand position within the industry as creating high quality digital
reading experiences everywhere consumers venture.

Disruptive Potential
Disruptive potential to both Kindle and Docstoc is the treat of new entrants in the market. Many companies are
beginning to enter the cloud computing, and inventing new technology to view documents through the computer and
through wireless devices. The major disruptive potential is that e-books is a relatively cheap industry to enter, new
technology and integration or consolidation can easily sway consumer’s motivations and value perceptions, along with
their buying situation.

Google has recently established their plan to enter the e-book market, Google already has made available their 1.5
million public-domain books. Google has made these books available to read through Kindle’s immediate competitor
the Sony reader (Rich, 2009).

Competitive Benchmarks

Best in Class
Currently within the e-book industry, Amazon still manages to stay best in class regardless of Scribd’s effort to take
their market share. Scribd needs to become as innovative as Amazon in terms of products and services offered.
To ensure competitiveness, Scribd needs to be improving their current products and services and searching for
innovations that can make them best in class. Scribd is best in class in regards to reading a book on a computer;
however, they need to adopt a technique that can allow the reading experience to become more portable.




                                                        41
The table below is used to analyze where Scribd and its competitors currently rate for best in class strategies.
The table weights each company based on how much they have contributed to being best in class (one is low,
five is best).




   Table 5-8 Best in Class Rating
   (Source: Bianca Shedd, 2009)

With regard to technology, Amazon and Scribd are best in class. Amazon has been able to produce a technology
that allows the reader to read a book on a light, portable, high quality platform and create an interactive reading
experience. They have set the benchmark for innovation and product line extension. Scribd is also leading in this
category because of their technology platform, iPaper.

Except for Amazon, all of the companies are lacking in the product and service changes in response to customer
behavior. Amazon has set this benchmark as they prove they can make changes to the Kindle that will make the
device more user-friendly and entertaining to the reader. Amazon Kindle has come out with multiple upgrades since
their first release. Scribd, on the other hand, is making changes to iPaper to enhance the reading experience, but they
need to offer more services to the reader in order to maintain market share.

Another area that prevents Scribd from being best in class is their lack of leveraging assets. Scribd has yet to fully
integrate a CRM system into their business processes, which is a major asset they are not taking advantage of. Scribd
needs to examine what they have at hand, and find a way to use it to their advantage.

All of the current competitors are exceeding or improving on these best in class strategies; however, it is a race for
who can accomplish these strategies first. These best in class strategies form the positioning of the product in the
consumers’ minds. As more businesses are beginning to adopt e-books, it is important to constantly work to maintain
best in class strategies. Amazon has set the bar for best in class with a total rating weight of 23.5. This should signal
to Scribd they need to restructure their business to find a way to be best in class in all areas.

Competitive Gaps
After analyzing where Scribd currently stands in terms of competition, the next step is to determine where the group
wants Scribd to stand in the upcoming three years. It is discovered Scribd needs to work on three things to become
more competitive within the market: technology, plagiarism, and services offered. The goal is to make Scribd an
industry leader and to stabilize their position in the market as more companies enter such as iTunes, Google, and
large printed book retailers.

There is a competitive gap in technology. As mentioned before, iPaper is currently a leading edge technology;
however, as more companies adopt a similar platform, Scribd needs to create a competitive gap with them by
introducing a device that is similar to Kindle. Through the introduction of a device, Scribd will be a bigger competitor
to Amazon and has the potential to gain part of their market share.

The second gap is plagiarism. Scribd needs to continuously improve on their speed of their scanning technology.
Currently, books are being downloaded at a much faster rate than the copyright technology can scan. By creating a
flawless copyright technology, Scribd has the potential to gain more suppliers, specifically publishing firms. If Scribd
can decrease plagiarism, they will become more competitive as publishers see they can gain more profits on books
on a platform that is just as safe as Amazon.




                                                       42
    The last competitive gap is services offered. Currently, Scribd only offers services for customers to download books
    in digital, reading format. It was discovered earlier, Amazon offers books in digital reading and audio format (Amazon.
    com, 2009). If Scribd wants to compete with Amazon, they must introduce a service that allows readers to listen to
    books online. Scribd needs to be in a position where they offer just as much or more than Amazon in order to gain
    position in the e-book industry. Referencing the Strategy Canvas, Scribd needs to go from their actual state (Figure
    5-5), to their ideal state, which is having ratings of five for all competitive factor offerings.


    Conclusions
    As the online document sharing industry continues to unfold, Scribd needs to continually adapt to the fast changes
    likely to occur. Currently, Scribd stands very strong among their main competitors which include Amazon and
    Docstoc. Their core competencies and value they provide to their segmented market have awarded Scribd with a high
    volume of website visitors whom are potential or current consumers of Scribd’s offerings. Their disruptive technology
    has allowed Scribd to build market share and brand identity among the industry. This innovative technology focus
    needs to continue for Scribd to maintain this advantage as well as stealing wallet share from competitors like Amazon
    by creating or co-producing a mobile reading platform of their own. Through startup capital Scribd took advantage of
    being able to attract traffic to their website. They improved their brand awareness and differentiated themselves from
    their competition, while only recording revenue through media ads on their site. This has helped provide them with a
    competitive position within the market that aligns to their vision. They have become known as being the place where
    everyday individuals can publish their work and readers gain access to an assortment of written work not available
    anywhere else. Some have referred to Scribd as the YouTube and iTunes of written documents (Gonzalez, 2007). As
    Scribd has matured, they have begun to take advantage of the opportunities within the e-book industry by setting up
    an online store that allows readers to purchase written work (Synder, 2009). The 20 percent share provides Scribd
    with another source of revenue to allocate to technological improvements (Scribd.com, 2009).

    Going forward, Scribd and their competition face many factors that will affect the competitive market. The first of
    which is technology. As new and improved technologies come about, Scribd, Docstoc, and Amazon as competitors
    will not only have to worry about one another but new entrants into the industry. Companies with valuable brand
    names similar to Barnes & Noble, provide a substantial threat if they are able to produce the necessary technology
    to compete in the market. For Scribd to ward off potential market entrants and gain share within the current market,
    industry barriers need to be strategically placed. This involves key partnerships with leading publishing, media, and
    other value added companies who only distribute their offering through Scribd’s site. Through partnering with the
    likes of Simon and Schuster, Harvard, University of California, and NY Times for example, they have started to build
    their wall on the barrier of new entrants and increase their current share in the market. Scribd needs to gain as many
    valuable partnerships as possible, as others enter the e-book market. As iTunes and Google begin to enter into this
    market, Scribd needs to take these proactive steps to keep their customers from switching to well known industry
    giants. Google and iTunes have already established a very large customer base and have successfully implemented
    additional services that consumers have adopted. With the addition of companies to the e-book industry, Scribd must
    continually find ways to provide more value to the customer so they can prevent switching to another competitor.




SECTION 6
NET ASSESSMENT

    The marketing net assessment is derived from the previous sections of the marketing opportunity analysis, including
    the Business Overview, Technology Assessment, Market Analysis, and an in-depth Competitor Analysis. In our
    exploration, we have uncovered key areas that need Scribd’s continuous focus to establish growth and sustain
    success. Scribd has an unmatched file sharing platform, (CrunchBase.com, 2009) which is the foundation to
    becoming an industry leader in the online document sharing industry. As seen in the technology assessment, the
    iPaper technology demonstrates a universal approach to customer value. The technology creates value for users of
    various viewing platforms. Users can read a book or publications off their smart phone, 13-inch computer screen or
    their 74 inch HDTV. No other technology allows consumers as many viewing options as Scribd (Scribd.com, 2009).

    Within the Business Overview a Feature-Advantage-Benefit comparative assessment was evaluated for both the
    readers (downloaders) and writers and publishers (uploader) of digital publications. The features for the downloaders
    include the iPaper multi-platform capabilities, the ease of the website, the reading experience, and embedding
    capabilities. Features benefiting writers and publishers are pricing strategy, where authors and publishers set their


                                                          43
own price and enjoy an 80/20 split of revenues from publications sales, the multi-platform distribution, preview
structure, and free sample books to entice readers to purchase the writer’s other works. Available features from
Scribd were compared with Amazon. It was also found in our Market Analysis, that Scribd and Amazon provide similar
features and benefits to uploaders, however, Scribd’s features and benefits are more in line with customer value drivers.

A strategy canvas was created to measure the customer value drivers that are most important to Scribd’s customers,
how they currently compare to Amazon and help to indicate where Scribd needs to strengthen it’s efforts moving
forward. These value drivers and relative importance led to the development of a Value Proposition, which, again, is:

Scribd is the premier innovative global publication resource that fosters and inspires a culture where all
writers and publishers thrive, thereby expanding its customer base and creating profitability.

In our market analysis, we introduced three potential market segments to determine which would be the most
profitable and best target for Scribd. The three segments are Internet-savvy College Students, Career-oriented
Professionals, and Alternative Online Consumers. Table 4.2 highlights the market potential for each of the three
segments. The total available markets (TAM) for all segments is 53,867,506 potential buyers with a total served
available market (SAM) spending potential of $1,334,628,048 billion. Of the three segments, the Alternative Online
Consumer showed the most market potential, with $100,631,962 million of revenues the first year, $193,485,074
million the second year, and $292,391,308 million in year three. This segment also aligns best with the customer value
drivers associated with Scribd. As stated in the market analysis, Scribd needs to take the position of the customer
intimacy leader (Harmon, 1997) to form positive relationships increasing customers lifetime value.

In the competitive analysis we compared Scribd and its two most significant competitors, Amazon and Docstoc, on
how each fared based on key competitive factors. We assigned weights to the factors which included delivered initial
costs to the consumer prior to the publication purchase, pricing structure flexibility, platform function capabilities,
shared values, credible source, sense of community, unique needs are met, product availability, and the overall
purchase experience. Using this approach we found Scribd to have the highest overall weighted average rating at
4.4, followed by Amazon at 3.5 and Docstoc at 2.9. Using these weighted averages, a strategy canvas was created,
highlighting those areas Scribd needs to focus on. While out performing both of their competitors for most value
drivers, Amazon rated slightly higher in its perception of credibility. By addressing this issue Scribd will have a strong
competitive advantage in customer perception.

Scribd has entered a rapid growing industry currently dominated by Amazon. Scribd was able to gain entry and
quickly steal share from Amazon and Docstoc through the introduction of the iPaper technology. This was a disruptive
technology to the industry and has awarded Scribd a strong presence in the written document file sharing market.
Scribd must continue to innovate to build barriers for other entrants and to continue to compete in the market.

Through our research and analysis we have concluded that Scribd is a viable player in the e-publication industry, and
more so as the largest online social publisher. Scribd offerings align very well with the customers’ value drivers in their
targeted market, and their iPaper technology maintains top position as the platform to beat.


SWOT Analysis
This section provides further assessment of Scribd and their competition within the online publishing industry. To
understand each aspect of the company and industry, a SWOT analysis has been created. A SWOT analysis is
the summary of all the situational forces that provide current and future strengths, weaknesses, opportunities, and
threats that have been uncovered in the previous sections (Best, 2007). With this analysis an assessment has been
made regarding Scribd’s current situation and what needs to happen to move forward to stay aggressive in this highly
competitive market. This exploration generates an overview of where Scribd currently stands in the market. This
analysis also provides a focus on their external environment, in order to understand what lies ahead in both potential
opportunities and foreseen threats. By being aware of potential market opportunities, Scribd can initiate penetration
strategies to maximize potential profits and market share. This also helps to minimize risk and allows Scribd to create
strategies to eliminate future potential threats.




                                                       44
            Exhibit 6-1 SWOT Analysis Table
            (Source: Kurt McDonald and Team)


Strengths
From our Technology Assessment we have found that one of Scribd’s major strengths stems from their technological
innovation with the iPaper platform. “iPaper is a rich document format built for the web. Built with Adobe Flash, iPaper
will display documents in the same way regardless of whether you’re using Windows, MacOS, or Linux (Scribd,
2009).” This disruptive technology allowed them to enter the document file sharing market with an advantage over
any of the big players in the industry. As a result, Scribd has been able to establish market awareness and credibility.
Another benefit their technology awards them is the ability to reach their market segment easily through worldwide
distribution with multi-language capabilities. Any individual currently residing in the U.S. that has access to the
Internet is able to receive the benefits Scribd has to offer. As the Internet culture grows globally, Scribd’s market
potential will continue to increase. As the market has evolved, the attitudes and expectations of consumers have
migrated towards an “I want it now” mentality. The desire for immediate gratification is beneficial to Scribd because
it aligns with their current offerings. Scribd’s investment capital gives them strength over companies like Docstoc
and new market entries by providing them with resources for R&D to continue to innovate. This also allows them an
opportunity to compete with the market dominant players like Amazon.

Other strengths include Scribd’s ability to attract high profile publishers, which increases the value their customers
receive. Attracting publishers and authors with allowing control over pricing and an 80 percent revenue share, aids
Scribd in establishing key relationships with value added resources. Scribd’s pricing flexibility provides them with an
advantage over competition in regards to customer satisfaction, through allowing customers to preview documents,
along with the ability to purchase segments of written material.

The indexing and embedding technology also provides benefits to both their partners and customers. Search
functions for customers are made easier with their indexing technology. Partners may embed a preview of their written
work on another social network that links back to Scribd, allowing for further reach and quick purchase access. As
the only company to currently offer embedding capabilities, this gives Scribd the ability to increase their market share
while competitors work to develop similar technology or to improve upon it (CrunchBase.com, 2009).

Weaknesses
Although Scribd documents can currently be read on smart phone platforms, they do not offer a portable device
similar to the Kindle platform, which allows users easy access to publications. Providing a specific smart phone

                                                      45
application would be attractive to the large number of smart phone users, taking away some of the need for a mobile
reader device such as the Kindle. Though Scribd’s innovative technology has awarded them some brand awareness,
Scribd holds a very small percentage of the revenue-providing e-book market. Competitors who have established
brands and multiple streams of revenue dominate this market. This provides the competition with capital to continue
to improve their current offerings. As Scribd attracts more publishers and writers they will be able to increase both
brand awareness and revenue. Currently, Scribd gains most of its revenue through advertising placements on their
site, but must shift the balance of revenue income to publication sales, to avoid being perceived as too commercial,
and less customer-centric.

Another weakness for Scribd is not having a mobile reader such as the Sony E Reader or the Kindle. The mobility
offered by a reader device is of great value to consumers who are constantly on the go. Without a mobile reading
device, Scribd not only loses potential revenues from product sales but also cannot create switching costs for current
customers, which can deter customers from moving away from Scribd.

Scribd would also benefit from deeper use of customer resource management (CRM). Though now recognizing repeat
customers, Scribd is far behind their competition when it comes to providing customer value through CRM functions.
Scribd needs to focus more on one-to-one marketing with potential and current customers. Using database software,
Scribd can improve upon these functions, directly enhancing on site search functions. Currently the site lacks a
well functioning algorithmic model. The search process can be more time consuming than it needs to be, which
decreases value to the customers.

Public relations and word-of-mouth appear to be Scribd’s only current marketing efforts. Though highly beneficial,
Scribd’s marketing presence in and outside the industry is minimal. Scribd is not taking advantage of the opportunity
to obtain valuable customer information to assist them in developing a marketing strategy that aligns best with
their target market. A current presence on social networking sites, Facebook and Twitter provides Scribd with little
marketing return since the sites lack exciting and engaging content. There is no real branding integration to promote
viewers to visit the site or become customers. There is a traditional news page on the site which features articles
written about the company, but little else.

Opportunities

The e-book market continues to increase on average 10.6 percent annual, from around 16 percent of U.S. book sales
(Mintel, 2004). As more individuals move to virtual readership, Scribd’s market potential will have a positive upward
trend. Attracting the virtual reader’s early adopters, will provide Scribd with key influencers in the migration process
from hardcopy to virtual formatted reading.

Scribd’s current technology advantage and culture offer them an opportunity to attract a large amount of writers and
publishers. As mentioned in our competitor analysis this would help increase publication inventory, providing a greater
value to Scribd’s customer base. Scribd’s brand equity will rise as more publishers partner with Scribd. Becoming a
well recognized site will make Scribd a necessary place for publishers to reside.

The growing segment of consumers who support sustainable living (green consumers) can also boost brand
awareness, and provide additional potential customers. Smaller businesses and educational institutions may try to
save on print and paper costs, while consumers move away from tangible publications to e-books and portable
reading devices. To better reach this segment Scribd is currently in negotiations with Amazon for distribution rights
on Kindle devices (TechCrunch.com, 2009). As mentioned in previous sections, Scribd needs to focus on the
production or partnership for a portable reading device of their own. Having the technology to allow for viewing work
on the Kindle and their own reader would eliminate switching costs for current Amazon customers. This will help in
pulling market share from Amazon in both e-publications and reader device purchases. By creating more value to the
consumer with a mobile reading device, Scribd would also improve motivation for partners and writers to publish their
works with Scribd.

The education and small business market provide even more potential than those trying to save on costs. From our
market analysis, a subset of these two segments represents a $335,755,990 revenue potential for Scribd. Teaming
up with universities and educational publishers is an untapped profit pool opportunity, Scribd can take full advantage.

By aggressively working to lock up partnerships with book and media publishers, Scribd would create a greater
opportunity to allocate revenue, along with decreasing potential competitive threats of losing those partnerships
to competitors. Again, this would increase inventory of available offerings to customers and increase advertising
demand for the website.




                                                     46
An intangible service and multi-language capabilities, provide Scribd with an opportunity for global expansion. This
would provide Scribd with a vast number of potential new consumers and partners. Established Internet countries
provide an immediate market opportunity for Scribd to enter, while the growth of global Internet access cements
future opportunities in underdeveloped markets.

Threats
A large issue that threatens Scribd’s future success is their limited ability to protect their writer and publisher partners’
copyrights. A foundation of Scribd’s business model is allowing anyone and everyone to publish and share their work.
If partners do not feel safe publishing on the site, it could be difficult to maintain and grow these partnerships. As
seen in our technology assessment, Scribd is currently addressing this issue.

Another threat is the introduction of disruptive technologies by competitors. The market Scribd launched into is
dominated by large players. These competitors have the resources for research and development (R&D) to find ways
to replicate Scribd’s core competency of platform integration with their iPaper technology. If duplicated, competitors
may introduce new products of value to Scribd’s target market. From our competitor analysis we discovered Scribd’s
competitors to have greater brand awareness and brand equity, which could be used to lock down contracts with
partners, who can provide additional value driven product innovation. To stay ahead of this curve, and remain
competitive, Scribd has to increase revenue thereby increasing investments. If investors feel Scribd’s potential for
success is low they may limit their funding. This would drive an increased focus on revenue, taking away from
important R&D investments. With today’s economic challenges, the dramatic slowing of local and global economies,
consumers may conserve dollars and switch their buying behaviors. This may include buying less and downloading
more free publications, lowering revenue from a key driver. This, along with smaller amounts of investment dollars may
cause Scribd to consider acquisition by a competitor.

Critical Factors
Scribd’s SWOT analysis highlights areas where Scribd is currently strong along with those having room for
improvements. With the SWOT analysis completed, there are some areas of great opportunity and some areas
where Scribd needs to take precautions to properly mitigate possible negative issues. These steps are outlined in this
section, first the risk factors are analyzed and suggestions are made for mitigation. Second, the success factors will
be analyzed with a discussion of how to leverage these factors.

Risk Factors
Upon completion of the SWOT analysis, it is clear there are major weaknesses and threats that present themselves as
risk factors. The table below outlines these aforementioned risk factors.

In any business, having multiple revenue drivers is important. A businesses health is usually based on the amount and
frequency of revenue coming into the business. A potential issue for Scribd is that their revenue comes in the form of
sales from the Scribd store and minimal on site advertisements. Of the store revenue generated, Scribd retains 20%
of the sale of each document. To mitigate this, Scribd could create more revenue streams. In-text advertisements, a
portable reading device, and or more unique offerings such as monthly subscriptions, may help Scribd diversify. This
would help mitigate the risk of relying on two core revenue streams.

With a new company, there is always a period of time where the new company has to work furtively to establish
their brand awareness and build their brand equity. This is an area where Scribd can most definitely improve. Scribd
has been established since March 2007 and has Amazon as a competitor, so it’s a market where they’re competing
against a household name to be noticed. If Scribd can continue making their exclusive deals with publishers, they
are making definite strides towards increasing brand awareness and building brand equity. Integration into social
networking sites, and increased marketing will provide Scribd with highly valuable brand awareness.

With Amazon and Docstoc as the two major competitors, with minimal market barriers to entry, Scribd is in a highly
competitive market. Docstoc has a website that emulates Scribd, without having a store element. Amazon offers over
300,000 books, as well as a dedicated e-book reader. In this highly competitive market, Scribd has an advantage
against each of these competitors with their innovative technology. Scribd must continue to innovate to stay ahead
of the curve, in providing the most useful and value added technology within the market. If Scribd can continue
making exclusive deals with publishers and develop their technologies, they can maintain their competitiveness in
this highly competitive market. Scribd was able to enter this market with their disruptive technology. There is always
the potential for current competitors or new entrants to mix up the industry through duplication or new product
innovations.



                                                        47
The following table describes Scribd’s risk factors, how to mitigate those risks, and metrics to track them.




Table 6.2 Risk Factors – Scribd
(Source: Scribd team, adapted from Harmon, 2007)


Success Factors
This growing company is in a prime state to strengthen their current value drivers and tap into the potential
opportunities within the industry. With over $12 million in private funding the revenue streams are beginning to open
up with the release of the Scribd store and signing of major publishers (Crunchbase.com, 2009). The resources
needed to drive growth and promote success are present. Scribd must now find the most effective strategy to suit the
needs of their customers and this growing industry.

iPaper technology currently leads the way in this industry with easy uploading and downloading, documents are
converted to iPaper without having to change fonts, layouts, or original artwork. This feature intertwined with millions
of people with the ability to freely go onto Scribd, and upload their own unique pieces of work. This created one
of their biggest strengths and truly sets them apart from industry leaders. The convenience element and quality in
displaying the integrity of Scribd writers can be used as leverage against big time players such as Amazon.

iPaper in conjunction with embedding capabilities enables users to incorporate “iPaper document viewer” on their
websites or blogs (Scribd.com, 2007) This feature allows individuals to go onto websites with Scribd embeds and
view them without having to leave the site. Viewers are able to see the documents the exact way publishers intended
them to be seen. While other competitors like Docstoc have embedding options, the iPaper technology once again
is what sets Scribd embeds apart from those that have similar features. The difference in embedding capabilities will
be realized by both readers and writers alike. Publishers will look for a company that provides them the most effective
way to display the integrity of their writing. Readers will enjoy the convenience of not having to leave a site to read
embeds and the originality of the work can be seen through the iPaper technology.

Another strength Scribd has over its current competitors is the pricing structure, and relationship with their publishers.
With an 80/20 revenue split in favor of the writers, and allowing for publishers to set their own price points and make
real time changes, there are no other companies that compare with Scribd. (Scribd.com, 2009) The company has a
dedicated vision of sharing literature with the world with quality and convenience as the underlying themes. This is a


                                                       48
vision that can be recognized by any publisher that encounters Scribd. This is also recognized when comparing sites
with Amazon who often clutter their pages with product on top of product, with an unfocused alignment in the needs
and wants of a writer.

To ensure future success and sustainable growth, Scribd must take the necessary action to protect their iPaper
technology and embedding capabilities. They must continue to stay technologically innovative, branching out to
all downloading platforms including the iPhone. The iPhone application will bring them one step closer in piloting a
product that is similar to Amazon’s Kindle reader. This will enable them to decide if further research and development
should be spent towards creating a Kindle like product. They must also take much more precaution in protecting the
rights of their writers surrounding plagiarism and copyright issues. While new products, publishers, technology, and
users expand in numbers, Scribd must maintain the easy-to-use website, clutter free atmosphere, and stay true to
their belief in “A writer’s dream, a reader’s paradise.”

Growth in publishing companies is inevitable, yet Scribd must find a healthy balance in maintaining good relations with
current publishers while increasing brand equity and awareness by signing on the new. Scribd has everything it needs
to create new revenue streams. With the ability to create alliances with newspapers, more publishers, businesses, and
educational facilities revenue can be generated in establishing contracts and partnerships with all of these categories
around the world. With 50 million unique hits every month, Scribd is just beginning to scratch the surfaces of their
followings potential purchasing power. (Scribd.com, 2009)




      Table 6-3 Success Factors — Scribd
      (Source: Scribd team, adapted from Harmon, 2007)

With a focus on mitigating the critical risk factors and leveraging the critical success factors Scribd can maintain many
of their competitive advantages they currently hold in their industry. With strong competitors, these advantages and



                                                         49
future opportunities may be eliminated if Scribd does not follow the tracking metrics provided. The costs incurred
through reaching the objectives established pertain to R&D and marketing costs, viewable in the Implementation
section of the report. The costs for integrating mitigation and leveraging strategies is far outweighed by those incurred
from ignoring them. Scribd cannot afford to fall behind in the value they provide through their innovative technology.
In this hyper-competitive market Scribd needs to continue increasing their offerings and switching barriers for
customers or it will cost them their business.


Conclusion
After reviewing and analyzing Scribd’s competitiveness within their market, we feel as though Scribd has a
viable reason to advance into the implementation process. Scribd is the provider of the most advanced social
documentation distribution platform. (CrunchBase.com, 2009) This is an important time for Scribd to gain as much
market share and awareness as possible. Their core competency will at some point become an industry-shared
technology. To counter, Scribd must create a large consumer base while focusing on adaptive and innovative ways
to increase their current value offerings. As stated in the Market Analysis, as Scribd’s customer volume grows, they
must follow their vision to promote their culture, creating a loyal following. Determined in the Business Overview,
Scribd’s Big Idea, “a writer’s dream, a reader’s paradise” was formed from their overall vision and strongly represents
the culture they serve. Scribd needs to stay true to this vision in order to benefit from a following of consumers, that
believe Scribd to be the best channel for representing their desires and needs.

Scribd has entered a market that represents a large number of potential consumers. Through our analysis the most
attractive segment is the Alternative Online Reader that represents 23,337,728 of consumers with a monetary
potential of $563,606,131. Many new entrants and larger companies are trying to capture market share. These
include Scribd’s current competitors Amazon and Docstoc, along with the potential clash of high tech leaders Apple
and Google (Hoovers, 2009). The advancement of new technologies and a focus on their target markets key value
drivers will keep Scribd ahead of these potential competitors. Scribd must work on creating strong industry barriers to
deter further competition and provide them with further advantages to their current competitors.

Scribd has built a presence over the Internet as a place where readers can buy books for a low price and where
authors can upload their written works to share with the public (CrunchBase.com, 2009). We believe the marketing
plan should move ahead as Scribd has set the foundation for an already established customer base. This customer
base is expanding rapidly as more people learn of the type of service Scribd offers. The expanding customer base
shows that Scribd will be a reliable business for both authors and readers. More companies will be inclined to work
with Scribd, as they become aware of the fact that the number of hits the website receives daily, is growing each
month, currently at 50 million unique visitors (Scribd.com,2009)

Scribd should also move forward because they offer a service that no other digital publication retailer can offer: a
public website where anyone can upload written work. (YouNoodle.com, 2009) Scribd has caught the eye of many
authors because they give them an opportunity that no other book retailer has ever given before. Although Docstoc
allows authors to upload written books, authors are still limited to only business and educational writings. Scribd, on
the other hand, allows anyone to upload everything, which gives them a competitive advantage in customer’s value
perception. Scribd offers something special to both readers and authors. This is seen in the Competitor Analysis
section of this report. Scribd’s alignment with their industry’s customer value drivers, is far better than those of their
two main competitors. Using these value drivers as a guide for further offering, Scribd can continue to follow their
vision, while creating the most value to their segment.

The business model Scribd uses has allowed the company to provide authors and publishers with control over
pricing, awarding them with valuable partnerships. Currently major partnerships with Simon and Schuster, Harvard,
and others have boosted brand identity and awareness as well as given Scribd free public relations and brand
association (Scribd.com, 2009). Since Scribd shares a greater percentage of profits with authors and publishers, this
keeps the supply of quality written work flowing. Scribd offers a better deal for authors than any other competitor
and still maintains a growing profit. The marketing plan should evolve because the relationships built between Scribd,
individual authors, and publishers will only get stronger as Scribd continues to offer the best service available. Scribd
is building relationships with publishers that will secure future written works on their website. The number of authors
and publishers using this site will grow, which will result in a larger inventory of publications, promoting greater
readership for Scribd.

Scribd has proven they have the potential to enhance technology, increase readership, and secure relationships with
authors. It has become evident that Scribd has all of the right tools to compete vigorously with current and future



                                                        50
    competitors by focusing on a unique position derived from their value proposition and customer-centric service
    orientation. By instigating an aggressive marketing plan and campaign, Scribd can capitalize on existing their best
    of class technology, grow their base of solid partnerships with authors and publishers, and ensure a loyal customer
    base, thereby creating barriers to new entrants.




SECTION 7
MARKET STRATEGY

    To properly market Scribd, a very innovative business, there needs to be a strong market strategy. This marketing
    strategy section will outline and discuss the steps needed to carry out the strategies. First, a dashboard will be
    created to keep track of the varying metrics used to evaluate our implementation of the marketing strategy. This
    will assist in tracking all of the various metrics that are established to gauge the health and relative success of the
    business. Secondly, we will use a blue ocean model to establish potential growth avenues. The blue ocean model will
    help determine where there is room for Scribd to exist and where there may be potential, untested waters. Lastly, a
    strategy will be developed to increase and eventually maximize sales for the next three years in Scribd’s existence.


    Strategy Platform
    The strategy platform is what Scribd’s strategic plan is built upon. The various elements help determine opportunities,
    plan for the future and ultimately, and maximize growth. According to lecture 5 by Harmon in 2009, there are five
    elements in the strategy platform and they are as follows: Strategic Objective Dashboard, Growth Strategy, Value
    Disciplines, Positioning Strategy and Branding Strategy.

    With these various elements the marketing plan will establish what is going to be done and how it will be done. These
    elements focus on the all-encompassing plan and when properly established and done correctly, this strategy section
    provides all of the practical planning required for a proper market strategy.


    Marketing Plan Objectives
    Sales and Market Share
    Scribd holds a market share that represents approximately 12.5% of the e-book market. 12.5% of the e-book market
    is representative of estimated revenues of $ $92,615,045 in fiscal year 2009.

    Profits
    The profit margin on Scribd’s e-book’s are severely limited by one major cost, the 80% of the sale price that is given
    to the publisher when their products are sold. 20% of the profit goes through to Scribd. While the profits may seem
    to favor the publisher and not Scribd, its important to note that Scribd’s costs are very low for storage and selling of
    product, so there is still a fair amount of easy profit being made for Scribd.

    Market Coverage
    Currently, the United States is the only market that can read, access and buy all of Scribd’s offerings. Despite the
    fact that Scribd has support for many languages, Scribd has yet to lengthen their reach out to markets outside of the
    United States. By 2011, Scribd expects to be able to sell their materials in any market across the world.

    Brand Awareness
    Brand awareness is low for Scribd. One of their most popular competitors is Amazon.com and Amazon is becoming
    one of the most recognizable brands in the business world. Scribd needs to expand their advertising and marketing
    reach, make more large publisher deals and create a stronger brand identity to really reach a high level of brand
    awareness.


    Marketing Objectives Dashboard
    To fully understand the plethora of information that will be presented as a result of this marketing plan, there needs
    to be an at-a-glance resource that will provide pertinent information quickly. This is where the marketing objectives
    dashboard provides a great purpose, as many applicable statistics can be tracked via one set of graphs.


                                                           51
Scribd will be tracked with the following marketing objectives: Return on Investment, Return on Marketing, Profits and
Market Share. This information is key for owners, employees and investors in the company. The four of these graphs
combine are effectively like the heart monitor of the business. A significant dip in any of these figures would suggest
a potential issue for Scribd. Figure 7-1 below shows what a hypothetical marketing objectives dashboard would look
like for Scribd.

Other potential areas where Scribd could benefit from a marketing objectives dashboard would be tracking traffic to
the website, average amount of time spent on the site, average dollar amount per purchase, etc. All of this information
could be worked into a comprehensive dashboard to further Scribd’s ability to evaluate their companies health
at a glance.




    Fig. 7-1 Marketing Objectives Dashboard
    (Source: Liam Flaherty, 2009)



Growth Strategy
This section will uncover the theories developed on a Blue Ocean Strategy created by Kim and Mauborgne. A
description of Ansoff’s Matrix and the possibilities for four different types of alternative strategies that can be
implemented will be revealed. It will also show how Scribd can use current resources in creating a blue ocean and the
possibilities in each alternative strategy in the Ansoff Matrix. Growth innovation, new ventures, and partnerships will
be explored. A platform strategy will indicate the potential alliances with Sony and Kindle Readers. A presentation of
Scribd’s three-year plan will be explained collaborating all of these elements in executing an effective growth strategy.

Blue Ocean Strategy
Blue ocean strategy is concept that Kim and Mauborgne have created to signify the uncontested markets of a
companies industry. They explain the difference between red oceans where companies are in direct competition with
one another trying to take hold of more of the existing shares. Within the confines of red oceans growth and profits
are reduced as more players enter the same market. In red oceans products and services become so abundant that
consumers are allowed to choose according to price, and companies are in a constant battle with one another to



                                                      52
create the most cost effective rates. To achieve a blue ocean companies must bring about completely new industries.
Yet, the most prominent blue oceans are created when companies take the current state of the industry and alter
the parameters to ultimately develop an uncontested market. A graph was created to explain the trade off between
cost and customer value. Essentially, Kim and Mauborgne explain that to achieve blue oceans companies must find
ways to drive down costs and increase value. They also focus on being proactive and not using other competitors to
set your companies benchmarks (Kim and Mauborgne, 2004). This concept of blue oceans will be a key element in
assisting Scribd to develop the most effective strategy moving into the future.

Ansoff Matrix
The Ansoff Matrix model aims to determine where each company currently stands and develops alternative direction
assisting in growth opportunities and objectives. Consisting of four different dimensions including current products/
markets and future products/markets, the strategic alternatives are presented as follows:

      Market Penetration —This first strategy utilizes existing products aimed at attracting current and potential
      Scribd customers to purchase more products. It also goes after competitor’s customers often resulting in a
      price war. Increasing advertising and marketing communication efforts is a big push in this strategy, ultimately
      creating brand awareness around the product or service.

      Market Development — In this strategy, new markets are introduced to the current service offering.

      Product Development — In this strategy, implementing new product offerings or innovating the current
      products and services is the main focus. The existing markets are the targets of product development, and
      higher risks are often incurred through the cost of research and development along with the launch of new
      products.

      Diversification — With the highest amount of risk, diversification aims to tap into new markets and offer new
      products and services. Risk becomes higher in this strategy if the approaches are not built from the core
      competencies that currently exist within the business (Richardson & Evans, 2007).

The following chart demonstrates the four dimensions of Ansoff’s Matrix.




                                Figure 7-2 Scribd’s Ansoff Matrix
                                (Source: Richardson & Evans, 2007)

Looking forward, the Blue Ocean Strategy in correlation with the Ansoff Matrix will assist in developing the most
effective growth strategy. While Scribd currently operates in red oceans consisting of giant competitors and a
smaller share of the market, a plan of action will be presented for the most effective market penetration models for
the business in 2009. Transitioning from 2009 to 2010, Scribd will look towards R & D in bringing new products to
the current markets, as well as tapping into new markets for optimal revenue potential. While the customer base,
brand awareness, product innovation, along with potential media publication partnerships all continue to grow,
a diversification strategy will be put into place in 2011 based on the core competencies of the current business
structure.




                                                        53
Strategy Recommendations
This chart demonstrates the different options Scribd will choose to invest in moving forward. For optimal growth,
each strategic alternative consists of several options that will be analyzed for implementation.




           Figure 7-3 Scribd Growth Strategy Options
           Source: Scribd team consensus, 2009


Recommendation on Strategy (August, 2009 – July, 2012)
The Scribd team was able to see that the ideas that were established by the founders already have potential to create
a Blue Ocean Strategy. The concept of proactively creating blue oceans became a reality when it was recognized that
there was no need to use competitors as a benchmark for success (Kim & Mauborgne, 2004). The unique offering
that was initially created for the Scribd service is much different in comparison to the competition. Amazon uses the
Kindle Reader that forces their customers to purchase a $300 device to download, also limited to only published
books. Barnes and Nobles and other bookstores are not comparable to the convenience of downloading on Scribd.
They also do not include the social networking aspect or the ability for anyone to display their work to share with
the rest of the world. Docstoc is similar yet very limited in variety of literature, tailoring their offerings strictly towards
business professionals. Scribd is in a league of its own, and has already grazed the surfaces of creating a blue ocean
incorporating innovative technology, cutting costs, and creating a higher level of value. They now need to continue to
expand on product and service offerings creating demand and eventually achieving a blue ocean of their own.

Year 1 (August 2009- July 2010)
In the initial year of this strategic plan Scribd will have heavy emphasis on promoting the brand looking to increase
awareness among the target market (Alternative Online Consumer) by 60%. In order to gain more market share and
take away customers from the competition, Scribd will increase the amount of big time publishers from 10 to 25 within
the first year (Figure 7-9). Alliances with more trade publications will take place increasing the value towards current
and future users in the Alternative Online Consumer category. 2009 will have the Scribd store as the focal point of
revenue generation as they fine tune the current product offerings, uploading and downloading service, technology
innovations and push to continue to stay aligned meeting the needs of these unique users (Figure 7-8).

Year 2 (August 2010- July 2011)
During this time Scribd will continue to attract more media publications on an advanced scale. They will also look to
increase communication among universities and colleges about the current service offerings. A heavy push in teaming
up with national and local newspapers will be factored in to the equation, and with Harvard University launching


                                                         54
1,000 books on July 16th, 2009, the windows of opportunity will open up, to team with university libraries in textbook
publications (Scribd.com, 2009). Partnerships with government facilities will become a part of Scribd’s operations.
A pilot study will be conducted in the state of California providing DMV documents available for the general public.
This will allow for uniform real time changes to be made and instantly posted throughout the DMV’s in California. Yet,
they will also move forward in technological innovations providing video embedding capabilities and audio features for
an enhanced user experience.

A heavy international push will come into the equation as international on-line retail continues to flourish. European
and Asian online shoppers average almost twice as many purchases as North American online shoppers, and
growth in online shopping is faster in the developing markets than in the developed economies (ACNielsen 2005).
Total e-commerce sales in Japan, South Korea, China, and India were $51 million in 2006 and are expected to grow
to $115 billion in 2010 (“Asia Pacific B2C E-Commerce: China, Japan and South Korea” 2007).These product and
market developments signify the beginnings of the shift from red oceans to blue oceans (Figure 7-8).

Towards the latter portion of this year an emerging alliance will be formed with the Sony reader. Sony E Reader was
developed by E-link Corporation in 2006, enabling readers to view text in direct sunlight with no power necessary to
maintain a static image. Sony Reader currently uses an iTunes store-like interface in Sony publication transactions. In
need of an efficient wireless data network, they make a perfect partner for Scribd (Cnet.com, 2009) (Figure 7-9).




   Exhibit 7-4 Image of Co-Branded Scribd/Sony Reader
   Source: Created by Jason Rippy, 2009




Year 3 (August 2011- July 2012)

In the third year of the growth strategy, Scribd will transition into the diversification stage of the Ansoff model,
and move towards a fully developed blue ocean. During this time, the tables have turned and trade publication,
educational programs and government facilities are all looking to cut cost and take advantage of Scribd’s massive
following. With media publications knocking at Scribd’s doorstep, partnerships are formed with a major player in this
newly developed industry. They will introduce the new Scribd Reader co-branded with Sony, fully equipped with audio
and video embedding capabilities. This device will not just be limited to published offerings; instead all of Scribd’s
millions of uploaded documents and unique literature can be downloaded within seconds. Other new technological
advancements will allow the hundreds of languages on Scribd to be automatically translated on all Scribd platforms.
They will also utilize CRM system to create a Preferred Customer Plan tailoring special offers to loyal repeat users,
and annual magazine and newspaper subscriptions will become available at the Scribd store (Figure 7-8). This can
be further referenced in the sales distribution section. As indicated in the product platform (Figure 7-9) in year 2011,
Scribd will open up the doors in offering all of their unique literature on the newly co-branded Scribd Reader. With
millions of documents, increased trade publications, magazine subscriptions, and individual uploads this alliance will
be a lucrative investment for both parties (Figure 7-8).

This next chart indicates the relationship of Scribd’s three-year growth strategy plan in the confinements of the Ansoff
Matrix. It is also a representation of the progressive transition over the years into a blue ocean/diversification portion
of the model during the third year.




                                                        55
             Figure 7-5 Scribd’s Three-Year Growth Strategy into a Blue Ocean
             (Source: Kim & Mauborgne, 2004, Richardson & Evans, 2007)

This product platform chart shows the product progression among our three target markets and the correlation with
the platform progression over the next three years. It also indicates the partnerships that are set in place for future
emerging platforms.




Figure 7-6 Scribd Product Platform



Market Leadership
This section will look at the market leadership model consisting of five different metrics. The model looks to
differentiate a company’s position in the industry, making them difficult to replicate by competitors. A company
must excel in all areas to be successful player among the competition, yet specialize in specific metrics in order to
differentiate the value being created. The Scribd team will evaluate the core competencies that contribute to each
attribute positioning the company in the most effective manner. The five metrics include:

Knowledge – This multidimensional metric can focus on knowledge within the company between employees, and
knowledge shared and co-created with customers. The development of sharing of knowledge increases value in your
product or service.




                                                         56
Innovation – This metric devotes a commitment to R & D in creating new markets and technology. Innovation is
developed in three different ways including Demand Pull where marketers encourage engineers to create products
tailored towards high opportunity market, Technology Push, where engineers create technological breakthroughs that
have potential in the market, and Integrated Approach, where engineers and marketers co-create technology with the
market in mind. The innovation metric increases customer value by enhancing the products, processes, and people.

Time – This metric creates value by keeping in mind that the element of time is a product attribute. By creating the
most efficient systems, a company can strengthen value-in-use. In cutting down delivery processes it will ultimately
decrease cost and increase benefits by giving back the customer their time. Speed is a vital characteristic of time that
can create opportunity maximization.

Customer Intimacy – In this category intangible benefits play a large role in creating value. It also aims to
incorporate the customization of unique individual customers, and allowing them to participate in determining what is
valuable in the end product. A heavy emphasis is put onto a company being able to “sense and respond,” making
proactive decisions and leading the industry in customer service.

Operational Excellence – This metric focuses on the people within the company as the core assets. Every
operation is team based and value is created by tapping into new markets with existing assets. At the same time,
companies must continually enhance product designs, materials, and processes to achieve the most efficient overall
cost (Harmon, Lecture Five, 2009).

This Radar Chart demonstrates the key metrics that Scribd will focus on in differentiating themselves from
competitors. It also illustrates the utilization of core competencies in Innovation and Customer Intimacy, enabling
enhanced value in the overall Scribd service.




                         Figure 7-7 Scribd Radar Chart
                         (Source: Harmon, Lecture 5, 2009, Scribd Team Consensus)

Scribd possesses well-rounded attributes in meeting the needs of each dimension of the Radar Chart. Yet they
have really pushed the envelope in terms of product and service innovation. Their ability to bring innovative value
driven products to existing and new markets is what truly differentiates them from competitors. The introduction of
iPaper technology set their foot through the door to compete with a company like Amazon, and the introduction of
their service concept in tune with the needs of consumers is what sets them apart. The Scribd marketing team has
worked alongside engineers to develop technology and services that cater to the needs of the market, in achieving
integrated innovation (Harmon, Lecture Five, 2009). The potential for expanding into global markets, and the addition
of audio and video embedding capabilities on the newly co-branded Scribd reader will reinvent the industry. The
addition of instant translation in hundreds of languages will bring them one step closer to creating foreign media
publication alliances. With a deeper understanding of their audience, the co-creation of value-in-use with Scribd
consumers, and a service that incorporates a small piece of each competitor, Scribd’s innovation process is
performing on an enhanced, blue ocean driven scale.

Another strong performance metric is Scribd’s Customer Intimacy. The reason they are able to excel in this category
in comparison with competitors is because they truly allow their customers to participate in the value creation process.
Scribd audiences are not just individuals consuming a service instead they are the service. They are the readers,


                                                        57
the writers, the social network, and the voice behind what Scribd has become, and where they would like it to go. If
Harvard University wants to digitize 1,000 books on the Scribd website, then they can. They will become a part of
the value creating process and begin their own social network of users, and make changes whenever they would
like. Scribd’s ability to sense and respond is spot on, and they are merely a facilitator of Scribd users, specializing in
customer service (Harmon, Lecture Five, 2009).

                                YEAR 1                            YEAR 2
Positioning Strategy
According to Robert Harmon and Greg Laird, positioning strategy “represents a firm’s decision of how and where it
will use its distinctive value creating competencies to create competitive advantage” (Harmon & Laird, 1997).

The objectives of the positioning for Scribd are: 1) to differentiate them from e-book and book retailers, by focusing on
                                 YEAR 2                             YEAR 3
the benefits of their offerings as services and 2) to distinguish them as an online social publishing network, positioned
according to their unique vision, “to liberate the written word — to turn everyone into a publisher and create the best
possible reading experience on the web and mobile platforms” (Scribd.com, 2009). In keeping with those objectives,
Scribd’s positioning should be focused on their attributes and benefits.

Appealing to consumers’ emotions is even more important than ever. From their article on emotional product
positioning, Vijay Mahajan and Yoram (Jerry) Wind explain this is the following way:
      Given product proliferation, information overload, a focus on customer relationships, and consumers’ increased
      use of Web-based search engines and decision tools, companies need to do more than appeal to the head in
      positioning products. They must also appeal more than ever to the heart. (Mahajan & Wind, 2002)

And according to Mahajan and Wind, because Scribd is a service, this is especially true. “Service comes from the
heart,” say the authors, “Affect fuses together a wide range of features and benefits that are not, or cannot be, clearly
articulated” (Mahajan & Wind, 2002). In other word, products are easily classified, however services are a complex
grouping of less tangible elements, and an emotional appeal can help customers relate to the services offered, thus
gaining mind share or brand awareness. Scribd’s vision and generous relationships with their partners, as well as
excellent customer service are important to the emotional aspect of positioning.


Desired Market Position
As previously described in this paper, Scribd is competing with both large e-book retailers or smaller online publishers
who seek to fill the needs of selected vertical markets. With regard to both types of competitors, Scribd needs to
differentiate itself.

Against larger retail competitors, Scribd needs to be positioned as the company that cares the most about the
creation of value for its customers and is most customer-centric in products and services developed, corporate
culture and marketing strategy. Against smaller vertical niche competitors, like Docstoc, Scribd need to position
itself as providing more and better services, a wider variety of printed works from individual creators to established
publishers such as Simon and Schuster.

Scribd’s positioning can be both cognitive and affective by being focused on solutions and benefits sought by
consumers, and in conjunction, appealing to those consumers who share their values of supporting creators and
writers by publishing all works, sharing the results with a wide-reaching audience, and therefore proliferating the
written word. Both cognition and affect are important, but the “battlefield of positioning is shifting to affect” (Mahajan
and Wind, 2002). Further, customer intimacy positioning can be achieved if Scribd’s marketing strategy stays linked
to key value drivers for their audience, and evolving as those value drivers change by developing knowledge-based
relationships with its customers.

A Customer Intimacy Leadership position involves:




                                                       58
      (Source: Robert Harmon lecture slides, 2009)

The desired positioning for Scribd, then, is derived from affective cognitive and customer-intimacy leadership
positioning. Ideally, Scribd must be more customer-centric than any of its competitors, with customer value driving its
strategy moving forward.

Key Value Drivers
For Scribd, the value drivers that rated highest for the proposed target market are unique needs are met, a high level
of product availability, a positive purchasing experience, shared values with the company, source credibility, sense of
community, delivered initial cost, flexible price structure, works on multiple operating platforms, and easy accessibility
of the product (downloading), and a reading experience that most closely matches a printed book. These are covered
in greater depth in Section 4, Market Analysis. The key value drivers listed here rated at a value of higher than five in
relative importance to the consumer. This information is taken from Section 4, the Market Analysis section.

A comparison of the key value drivers of the selected target market, the alternative online consumer, and those value
driver ratings for Scribd competitors is shown in the following table. The value drivers are listed in order of importance
to the Alternative Online Consumer segment.




         Table 7-8 Key Value Drivers Relative to the Competition
         Source: Section 4, Market Analysis, of this paper.

On all of the value drivers listed above, with the exception of credible source, Scribd ranks higher than both Amazon
and Docstoc for the alternative online consumer. Amazon is considered a more credible source based on its brand
awareness and equity, and longevity in the marketplace.


Branding Strategy
As described by Leonard L. Berry in his article about services brands;
      Service companies build strong brands through branding distinctiveness and message consistency, by
      performing their core services well, from reaching customers emotionally, and by associating their brands with
      trust. (Berry, 2000)

The strongest service brands “reveal a conscious effort to be different, a conscious effort to carve out a distinct brand
personality”. The goal of branding, proffers Berry, is to “reinforce a demonstrably different service experience with a
demonstrably different brand position”. (Berry, 2000)

As a service, Scribd needs a brand and branding strategy that transcends product features and benefits, and makes
an emotional connection with the audience. To do that, Scribd’s brand identity must reflect customers’ core values.


                                                          59
In this way, Scribd can differentiate from competitors by promoting feelings of trust, loyalty and affection. And service
brands strengthen brand equity by focusing on under served market needs (Berry, 2000)

Brand is built from the customer’s entire experience with the company, its products, and its services (Dunn & Davis,
2003). Brand strategy for Scribd will include integration of branding, messaging, service and the corporate vision to all
internal and external touch points. “Brand touch points are all the different ways that an organization’s brand interacts
with and makes an impression on customers, employees, and other stakeholders” (Dunn & Davis, 2003)

Scribd’s brand strategy will need to start from the top down with a demonstrated commitment from top executives,
alignment with business strategy, and a consistent personality. It must work with the affective cognitive, customer-
intimacy positioning proposed, and center around a unique and easily recognizable personality as that of the online
social publisher who cares about the creation and sharing of a uniquely diverse inventory of written works, sharing the
written word and making their resources available to all.


Value Proposition
Scribd’s new value proposition is:

      Scribd is the premier innovative global publications resource
       that fosters and inspires a culture where all writers and publishers thrive,
      thereby expanding its customer base and creating profitability.

Brand Identity Recommendations


            - logo should be more descriptive and emotionally evocative
            - logo should have more personality and stand out from competitors



            Worldly
            Customer value driven
            Supportive
            Thoughtful
            Intelligent
            Innovative


            A writer’s dream, a reader’s paradise.

Following is a brand story from the Alternative Online Consumer’s perspective.

Brand Story
      My name is Austin and upon my first visit with Scribd on my recently purchased Macbook Pro, I was
      immediately impressed with the ease and convenience of navigating through the Scribd website. Without
      cluttered margins filled with advertisements and products, this page clearly indicates that this is an online
      publishing site where I can upload and download published work. The variety in offerings is outstanding, and
      best of all most of it is free. I can never gage how great a book is from just reading the back cover, and I love
      that when I click on a book, Scribd actually gives me a sample reading of the first chapter. It makes me feels
      good to know that I’m paying for a quality reading experience. The look and feel of this website is very easy on
      the eyes and I’m enjoying going through and exploring the different magazines, cooking recipes, and sample
      resumes available. I usually get frustrated when I’m trying to check out and purchase on an online site, but
      Scribd has made this one step sign up and payment so easy. I was in and out within minutes.

      After my last experience I couldn’t wait to revisit Scribd. This next time I was back on the publishing end. I had
      taken a creative writing class and came away with some really great friends that I still share short stories with
      every now and then. I told them about Scribd and how it makes it so easy for me to publish my short stories to
      share with my friends. The iPaper technology is great and publishing has never been easier, no wonder Scribd
      has such a huge following. I noticed that I made some grammatical errors on one of my published pieces. It



                                                       60
     was amazing how quickly I could go in and make changes to my document. I even have been able to meet
     several people who share the same passion for writing short stories. I’ve created a network of people that
     specifically just share this one common interest. It really is a nice feeling knowing that Scribd has created an
     environment that dedicates itself to sustaining the written word, and I can’t believe they let their publishers set
     their own prices and give them 80% of each sale. I can now see why the fourth largest publishing company
     in the world has decided to create an alliance with Scribd, and I can’t wait to see the new offerings that will be
     available in the years to come.

     My friend Rob has a blog where he shares his favorite literature, and often I’ll find that he has embedded Scribd
     documents onto his blog. It’s great how convenient and easy it is to go through the Scribd document even on
     other websites — you don’t even have to leave the page and you can read through the whole piece, and even
     link back to Scribd if you want to. The best part is that it displays as great as if you’d gotten the publication
     straight from the Scribd website.

     Every time I’ve got some time to kill and I’m surfing the web, Scribd is in my favorites and one of the top five
     sites I go to when surfing the net. I do wish they had an iPhone application so I could load up some documents
     to read before I’m about to board a plane or get into a car for a long ride. I would definitely download that
     application as soon as it became available.

     Every time I had questions or concerns Scribd support desk was very helpful. With most of my questions

     submitted a report request, and I had a message in my inbox the very next day with step by step instructions
     telling me exactly how to embed a document onto a website. The best part is that they have clearly created
     a visible email preferences section that allows me to block any unwanted material from coming into my email
     account. This really made me feel like Scribd was trying to enhance the quality of my life by making things
     easier, and not shoving advertisements down my throat and filling up my inbox with annoying reminders.

     Scribd possesses all of the attributes that I look for in an e-book publisher and seller. With a clean uncluttered
     approach in presentation, ease and convenience from check in to check out, and place where I can affordably
     learn and share, this is as customer-centric as it can get. Scribd is a company that is keeping reading alive by
     sustaining the reader/writer relationship and I am proud to be a part of that.

Transition to 4 Ps




                                                              Product      Customer
                  Knowledge             Innovation           Leadership    Intimacy              Time
                       (.15)               (.32)                (.15)        (.30)               (.25)



                                                                                                            Figure 77 4-P
     Figure 7-9 Transition Map
     (Source: Jaclyn Tienneman, adapted from Harmon lecture slides)




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Product
Product is the most prevalent out of the 4-p’s in our strategy transition map. This is because it is the main source
of our revenue, as well as gateway to customer intimacy. Product innovation and product leadership is the key to
competitive advantage in this technology field. Scribd currently leads the field in innovative technology with their
iPaper, the strength of this product is what currently drives Scribd’s market share.

Promotion
Promotion ties for second place in our strategy transition map. Promotion is especially important to Scribd because
they are a startup and a relatively new entrant to the market. Scribd needs to concentrate promoting brand
awareness to increase their unique visits, and translate those visits into sales.

Placement
Placement or distribution ties for second in our strategy transition map as well, it is important to our marketing
strategy because the consumer needs to be able to access the site easily and in a timely matter. It is important for
Scribd to boost their search engine optimization to find the site, as well as within the site, so the consumer can easily
navigate the page.

Price
Price held the lowest score in our strategy transition map. This is because Scribd currently uses a skimming pricing
method, since the product has a high perceived value. Although price scored the lowest we do feel that it is
necessary for Scribd to begin using aspects of a penetration pricing plan to compete with giants such as Amazon.

Conclusion
In our 4-p’s strategy transition map we find that our products scored the highest. Next were promotion and
placement, closely followed by price. Scribd’s marketing strategy will need to focus on creating brand awareness
through out all four P’s. We also found that in this industry is eager for customer intimacy and innovation. Time
scored relatively high as well, we assume this is because it is an internet-based company, and consumers are
constantly looking for the quicker more convenient services.

Product Plan
An extensive product plan including the product line strategy and the product platform strategy will now be provided.
A product line strategy is a time-phased conditional plan for the sequence of developing product offerings from
a common platform with each product offering targeting a specific market segment (McGrath, 2000.) The key
considerations while creating the product plan for Scribd are the key market segments and the offerings appropriate
for the targeted segments.

Product objectives
Scribd’s product objective is to become the most used digital publication site on the Internet for the Alternative Online
Consumer and other profitable consumer segments. Including enhancing their current industry position of the most
innovative technology platform and easy-to-use website.

Product life cycle, market life cycle, technology life cycle
The following is an overview of the product, market, and technology life cycles for Scribd, including market
development, market growth, market maturity, re-differentiated market, and market decline. Since Scribd’s product
offerings are provided through a service, their offerings life cycle could last indefinitely. As long as the world has
writers, Scribd will have a product to offer. The Technology life cycle, as stated in the technology assessment is nearly
non existent. Since the needs of customers are filled through a continually updated and modified system, customer
disposition behavior is limited. A Flash player update can be downloaded to a users computer, providing them with
the needed requirements to view their purchases. While the online document sharing life cycle is still in its growth
stages, there is opportunity for Scribd to cement themselves within the key market segments provided in the market
analysis. The market life cycle has moved out of development and into the growth stages. As our Competitive Analysis
has highlighted, they are large businesses and smaller market entrants that are trying to capture a share of this
growing market.

Product Strategy
Our product strategy is to increase site traffic and market penetration into the Alternative Online Consumer market
segment, as early adopters continue to understand the benefits Scribd has to offer, while the early majority catches on


                                                      62
to the sites iPaper technology functions and capabilities. To promote this strategy Scribd needs to enhance customers
accessibility and availability to document offerings. At the same time increasing Flash Player technology, allowing for
user editing and citing capabilities. Introducing audio and visual features will add value and attractiveness for the
segmented market. Using a time-phased plan for the development of different products from a common platform
(McGrath, 2001), will help management focus on key growth decisions. Developed in the table below, is Scribd’s
product strategy which focuses on five key performance indicators (KPI) (Harmon, 2007) used to track the growth
progress. Included in the KPI’s variables are Revenue Drivers/Sales, R&D/Product Platform Technology Innovation,
Inventory, Usability, and Packaging. The Revenue Drivers/Sales will be measured by Scribd’s amount of available
documents that customers have access to. By increasing customer access abilities and offerings Scribd hopes to
increase profits, market share, site traffic, and market penetration. R&D/Product Platform Technology Innovation will
be monitored by the publication format distribution capabilities. Providing abilities to edit and cite, along with audio
and visual features will improve Scribd’s technological assets. One of the aspects of Revenue Drivers/Sales includes
the Inventory variable. This will be measured with Scribd’s publication partnership growth. Expanding publication
contracts and uploader activity, Scribd will increase profit potential and share potential. With more offerings site
traffic will grow, benefiting market penetration. The Usability variable will be measured by Scribd’s ability to provide a
mobile reader through a partnership with Sony and Apple. Sony’s partnership will include the Sony E Reader, while
an application will be available on Apple’s iPhone and iPod. Providing mobile devices that have additional attributes
like editing and visual functions will improve profits, market share and penetration, along with Scribd’s technology
innovation functions. The last KPI variable, Packaging, will be measured through Scribd’s ability to integrate customer
relationship management (CRM) software and viewing benefits, to improve the customer experience. A more one to
one marketing approach will drive customer satisfaction, improving site traffic, potential for profits and share.




        Table 7-10 KPI Variables Growth Strategy Plan Objectives

       Product Portfolio
Scribd being a service provider, the product portfolio currently consists of writer and publisher offerings available to
customers for download from the Scribd site. These currently include a wide range of materials from best selling
books to resume examples and poetry. Any virtual form of written material is a viable product form which Scribd is
able to offer. In the future reading applications and a mobile reading device will be added to this portfolio.

      Product Platform family
As seen in Product Platform Figure, Scribd’s base and only current platform consists of the iPaper platform with
Adobe Flash technology. This is the main component to Scribd’s platform family, the reason they are in business,
and the parent to future portable reading devices. The next platform will consist of Apple applications and the Sony


                                                         63
E Reader. This platform will allow Scribd to increase reach and add value for both their customers and publishers.
Using the technology from the base platform, Scribd will be able to take their competitive advantage mobile. The next
platform will be comprised of Scribd’s innovative mobile document reader. This platform will include advancements to
audio and visual, and editing and citing capabilities. Each platform will have the format conversion and embedding
capabilities. The attributes these platforms provide will benefit our target segments differently but each will help Scribd
in becoming the most used digital publication site in the industry.

      Product development
As seen in the Product Platform Strategy Figure (7.2.1) through the remainder of 2009 and the first three quarters
of 2010, Scribd will stay focused on providing value to their customers through benefits of their iPaper Technology.
Working with Sony and Apple, during this period, Scribd looks to launch a Sony E Reader portable reading device,
along with new Apple applications for the iPhone and iPod during the last quarter of 2010. With this release date,
Scribd looks to reach the U.S. holiday shoppers market.




    Figure 7-11 Product and Platform Strategy
    (Source: Kinero Tan, 2009)

       Packaging
Packaging needs to be strategically implemented based on Scribd’s value offerings. Though the service is provided
on a virtual network, the website needs to add value to Scribd’s customers. As stated earlier in the plan, the site
needs to be highly functional and easily navigational. As Scribd continues to improve upon their CRM functions, this
will benefit the website and design. A more one to one marketing approach can be accomplished, allowing each
package to match the needs and wants of each unique customer’s.

      Services
With Scribd’s innovative technology they are able to run on any operating system and can distribute formats desired
by customers to multiple viewing devices. With their current business model and Internet delivery Scribd does not
need to work with channel partners. In the future the introduction of a mobile reading device will need an Internet
provider partnership to allow customers to purchase products directly from their device.

Uploading, downloading, copyright, CRM, Scribd support 24/7.

       Warranty
Since our product is the service provided by a distribution platform which allows users to view multiple formats of
published writings, there will be no need for a warranty for our current product offering. A warranty program will be
established for the mobile reader products Scribd provides in the future.




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Product cost model




Table 7-12 Product Costs
Source: Kurt McDonald




       Exhibit 7-13 Cost of Data Transfer and Storage
       (Source: Jason Rippy and Liam Flaherty, 2009)


The total product costs currently for Scribd, includes the website domain and bandwidth, along with the salaries of
the 23 employed and R&D costs. As seen in our product cost model figure 7.2.2 the average upload expenditure
is $1,728 a year. This is based on 18 million file uploads at a 10 cent cost per gigabit. Their storage expenditure
based on a 15 cent per gigabit, per year increases yearly from $2,592 in year one, to $5,184 in year two, and
$7,776 in the third year. Downloads have the greatest cost at 17 cents per gigabit downloaded. With an average of
1,000 downloads per file and an .08 gigabits needed to download a single file, we have assumed an expenditure of
$244,800 per year for Scribd’s cost to download. Yearly costs as seen in table 7.2.2 would amount to $249,120 in
year one, $251,712 in year two, and $254,304 in year three. Total data costs incurred for the three years would be
$755,136. Future cost models will need to be analyzed when a tangible mobile reading device becomes available to
consumers.

Product launch issues and timeline
Scribd is already up and running and the introduction of the Scribd Store in May 2009 is fully functional.
Communication with the software and production teams for future innovations, including the development of the
mobile reading device will be crucial for success. The Apple applications and Sony E Reader introduction are set
for a 2010 fourth quarter roll out. While the Scribd portable reader hopes to be introduced third quarter 2011.
Scribd engineers, product development teams, and marketing staff will need to work diligently in producing a set of
objectives and goals to meet throughout this development process.

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Sales and Distribution Plan
Sales and Distribution Objectives
Scribd has five main objectives for sales and distribution. The following objectives are designed to decrease
distribution time and increase sales for Scribd within the next three years.

1.   Decrease search time for a book to three minutes or less.
2.   Expand Scribd’s bookstore offerings to increase sales of books by 70 percent by the end of three years.
3.   Create a portable reading device in order to decrease distribution time.
4.   Offer multiple pricing models to secure and increase sales.
5.   Provide promotional incentives that will increase sales by 10 percent.

The first objective is aimed at decreasing distribution time. Scribd is focused on reducing the time it takes for a
customer to get a book on their computer. This process includes a user who has a book in mind and searches for it,
finds it, and clicks to download. The downloading time will vary depending on the customer’s computer. The process
for searching for a book needs to be simple for the buyer to reduce time spent on finding a book.

The second objective is focused on increasing sales. Scribd is relatively new to the e-book industry and has the
opportunity to gain more customers through increasing their inventory. Scribd should continue to focus on building
relationships with suppliers (publishers and educational facilities), to expand product offerings for the reader. The
company should also contact colleges and universities for potential suppliers. If Scribd can provide more books to
read, especially those from mainstream authors, their sales will increase dramatically as the years progress.

The third objective is focused on decreasing distribution time as well. According to Amazon, the Kindle can download
any book on the device within 60 seconds or less (Amazon.com, 2009). This reduces their distribution time as it is
clear the reader receives a book in a much shorter time period. With Scribd, the download time could vary drastically
depending on the computer the customer is using and the size of the book. Also, with Kindle, the product is mobile
with a built in wireless connection, allowing them to have downloading capabilities from anywhere. To decrease the
time it takes for a customer to receive a book, Scribd should focus on the technology aspect to design a product
similar to Kindle.

The fourth objective is focused on providing multiple pricing models for the consumer in order to increase sales.
Scribd should focus on integrating subscription services for magazines and newspapers available on Scribd. For
example, if a consumer reads People magazine once a week, it would make sense to offer a pricing model that allows
the consumer to prepay for a subscription (SubSCRIBDtion) that will run for a month or up to a year. By integrating this
pricing option, Scribd secures future sales and makes the buying process easier for the reader.

The fifth objective is focused on increasing sales through promotional offers. Scribd can utilize contracts with
publishers and reading devices that will encourage readers to download and buy more books. For example, Scribd
could encourage downloads by offering a free book for every five books purchased from the same author or genre.
This would encourage customers to buy more books with the goal of receiving a free one. Other promotional offers
that could drive sales would be to offer a discount on the future portable reading device with the purchase of one
book. This offer would encourage customers to buy the device as well as more books.


Sales Strategy
The sales strategy consists of two sales teams that are designed to target publishing firms and colleges. The
strategies for these two teams are to grow suppliers, which will ultimately lead to an increase in sales because of a
larger product variety.

The sales strategy will involve hiring sales employees who specifically excel in building partnerships. Scribd has not
taken full advantage of partnerships with large publishing firms. If Scribd can partner with other large publishing firms,
they can provide their customers with a larger inventory of publications, which will promise a greater increase of sales.
Scribd needs to expand their sales department and create a strategic plan for how they will go about partnerships
with other publishing firms.

Besides creating a sales team designed exclusively for publishing firms, Scribd should also create a sales team that
will target the educational segment. More specifically, the team should make proposals to colleges around the nation.
These proposals will target professors who have educational materials they would like to sell to students such as



                                                       66
textbooks or class lectures. If the sales team can attract professors, students will follow which will ultimately increase
revenues. Both sales teams will be responsible for setting pricing options and building partnerships with magazines to
accomplish the fourth objective.

The following chart shows a layout of the different sales teams and their tasks. These teams are designed to
accomplish the second objective.




       Exhibit 7-14 Current Organizational Chart


To accomplish the first and third objective, two technology teams will be assigned to tasks that simplify the website for
book search and the production process for the portable device. Currently, Scribd has a Chief Technology Officer who
will be in charge of the two teams accomplishing these tasks. If Scribd feels they cannot create a device similar to
Kindle internally, they should seek outsourcing or partnership options. Ultimately, the group recommends Scribd build
the device internally co-branding with the Sony E Reader team.

Scribd has successfully created a website that is more user friendly than not; however, they need to work on their
search engine in order to decrease the time it takes a reader to find and buy a book online. Scribd has millions of
written works uploaded, so it would be beneficial for them to create a more robust search engine. For example,
readers currently have the ability to narrow their search down to the type of material (book, magazine, newspaper,
etc), but they can’t distinguish writings that are already copyrighted from those that are not. If the user can decrease
purchasing time, Scribd may increase sales as they learn this is a crucial function to have in order to maintain and
grow their customer base.

The following chart shows a layout of the different technological teams and their tasks. These teams are designed to
accomplish the first and third objective.




       Exhibit 7-15 Proposed Organizational Chart

Channel strategy
Scribd will continue to maintain a direct channel for getting the books to the reader. Authors and publishers can
directly upload publications on the website which allows the direct channel to be possible. Customers simply go onto
the website, search for a book, and buy it directly from Scribd. Scribd does not need to utilize intermediaries as this is
an e-commerce business.




                                                       67
By utilizing a direct channel strategy, Scribd is able to keep 20 percent of revenues and give 80 percent to authors
(Scribd.com, 2009). The direct channel gives Scribd the ability to return a large amount of revenue to suppliers, which
builds strong relationships. If Scribd were to utilize an indirect channel, an assumption can be made that both Scribd
and authors would not see nearly as much return on revenue.

The following table represents how customers receive the product.




                               Exhibit 7-16 Scribd Distribution Channel

The table shows Scribd uses a direct channel to get products to their customers. Channel management is strong
even though the steps to get the product to the customer are minimal. To manage this channel, the sales teams need
to ensure their suppliers are downloading books in a timely fashion, and are uploading the books that are contracted
with Scribd. In terms of supplier qualifications and certifications, these vary depending on who the supplier is. If Scribd
is targeting publishing firms, the firms must have qualifications and certifications for copyrighting as well as permission
from their authors to sell the book on the site. If they do not have permission, this could turn into a major legal issue
because it is considered plagiarism as authors are not collecting revenue from their work. Individual authors do not
need to have any qualifications or certifications to upload their works on the site.

In terms of managing iPaper application, the Chief Technology Officer (CTO) needs to continuously maintain the
site so it stays user friendly and can handle the amount of daily downloads. Scribd needs to have an enhanced
scanning system for any plagiarized work to maintain credibility for the site, improving their set of best practices
(Scribd.com, 2009).

The Director of Communications should oversee a CRM database program to collect data regarding the customer’s
purchase experience, and any other customer feedback that could improve the channel.

Information on Scribd’s CRM was unavailable. It is unknown whether or not Scribd uses a CRM system to divide
up their market; however, it can be assumed they have the technology and tools to heavily utilize a CRM system. If
Scribd does not use CRM, they should begin to create a database for online customers to learn more about their
demographics, psychographics, geographics, and behavioristics. Scribd can use the information collected about
customers to further divide up the market and target the types of books specific people enjoy reading. The company
can then use this information to build inventories for certain subjects of writings.

Scribd has recently begun to experiment with an indirect channel to sell books. The company is allowing customers to
buy chapters from Scribd, via publishing websites. The publishing companies are collecting payments for the books,
and are then supplying the customers with a link to Scribd. This indirect channeling has not been utilized much,
which is why the paper will focus on their direct channel. It can be assumed Scribd will maintain a direct channel for
customers to buy books, as it drives traffic to their site.


Promotion Plan
                                                                                                and marketing
The promotion plan for Scribd targets the Alternative Online Consumer. The primary goals of the promotion plan
communications for Scribd are to build brand awareness, increase visitors to site, convert visitors to customers, and
differentiate from large commercial online e-book retailers.

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To do this the proposed plan uses a combination of online web advertising, increased SEO/SEM, online social media
tactics, targeted print and web advertising, public relations, and event presence and sponsorship guerilla tactics in a
small number of major cities such as wild postings at in selected locations and events.

Promotion Plan Objectives

Brand Awareness
Increasing brand awareness is the primary objective of the Promotion Plan. During the initial launch phase of the
plan more marketing communications dollars will be spent on print and web advertising in magazines and websites
that appeal to our target market, the Alternative Online Consumer. Another important goal of the brand awareness
campaign is the recruitment and nurturing of a targeted, dependable group of influencers/ambassadors, including
influential authors, popular alternative bloggers and literary celebrities to reach out through blogs, interviews, and other
forms of endorsements. Other elements to increase brand awareness include social media tactics and continued
public relations, and solicitation of journalist reviews and articles.

The goal is to increase brand awareness among the targeted market by 60% in the first 6 months, and 90% by the
end of the first year. (Bianca, please check these numbers).

Increase Number of Visitors to the Website
A second objective of the Promotion Plan is to increase the number of new visitors to the website. This will be
achieved as a result of the brand awareness campaign, including social media and public relations effort. The goal is
to increase new visitors to the site by 15% in the first 6 months, and 25% by the end of the first year.

Second and third year goals will be influenced by new market opportunities, including global penetration, and will be
larger and those numbers will be based on further development of new market penetration strategies.

Conversion of Visitors to Consumers
Another key objective of the Promotion plan is to increase the download and purchases of books and publications via
conversion of site visitors to customers. The goal is to convert 2% of the current average number unique visitors to
the site per month, currently around 50 to 60 million, to downloaders and purchasers of digital publications in the first
6 months. This conversion would generate approximately one million new customers per month, and 6 million over
the six-month period. Conversion efforts will continue throughout the proposed 3-year plan, however tactics will be
modified as needed.

To achieve this goal, in addition to advertising and other external communications, we would offer special promotions
and discounts for the first book or other publications purchased from the sight.

Increase Revenues from Purchases
Increasing revenues from purchases of books, publications and subscriptions are a key objective of the Promotion
Plan. To be profitable, Scribd must shift the balance of revenues from advertising placement to sales from the Scribd
store. Marketing communications efforts will lead potential customers to the website by promoting customer value
related benefits. The goal is to increase revenues from purchases by 20% in the first year, 50% the second year and
75% the third year.

Develop Loyal Online Social Community
Objectives of the promotion plan includes the development of community of followers who fit the characteristics
and traits of the Alternative Online Consumer and support Scribd’s unique vision. This will be achieved through the
development of a stronger Community section on the website, and will be promoted on the site, through public
relations efforts and social media efforts including blogs, further development of the Scribd Twitter and Facebook
pages. The goal is to increase brand loyalty, which will be observing activity on the Scribd community page,
monitoring Scribd mentions and commentary on blogs and other means of Internet communication.

The following table shows the goals and metrics for each of the promotion plan objectives.




                                                       69
    Table 7-l7 Marketing Objectives Scorecard
    (Source: Stacy Butchart, 2009)


Promotion theme
To appeal to the Alternative Online Consumer, the promotion theme needs to be authentic and to the point. Customer
value drivers of particular importance to this segment need to be taken into consideration, with an emphasis on
having unique needs met, excellent product availability, a positive purchasing experience, shared values with the
company, and a sense of community.

The theme needs to appeal to the independent thinker persona, emphasizing that unique needs are met including
their interest in non-mainstream resources. Since the primary goal is to get people to go to the site and consider
purchase the theme should entice them to take a look.

The promotion theme is:

Explore a digital world of books and publications that matter to you.

Promotion strategy
The alternative online consumer is easily accessed through the Internet. Author David Meerman Scott, states “The
Web has opened a tremendous opportunity to reach niche buyers directly with target messages that cost a fraction
of what big-budget advertising costs” (Scott, 2007). Scribd is a start-up with limited revenue and a modest amount of
investor funds, therefore along with a limited number of traditional marketing communications tactics, the majority of
our promotion efforts will be focused around a multi-tiered web campaign.

Internet/Web
        Thought-leadership Blog or Mini-site
The Online Alternative Consumer will be attracted to and influenced by thought-leadership, including blogs and
articles from company leaders, writers, publishers and literary experts or celebrities. Thought-leadership can be
developed on a blog page within the existing Scribd site, or a mini-site that is built to support and build a community
of followers.

      Community Landing Page
The existing Community landing page needs a stronger, more useful, more content rich landing page. The page
would exhibit thought-leadership and encourage community. It could have a blog or a forum to allow customers and
potential customers to discuss topics such as how Scribd can better serve their needs, types of publications they
would like to see added, and community building discussions relevant to this groups customer values. This page
could also evolve into a mini-site.

      Links on Relevant Sites
Links will be placed on a variety of sites, where feasible, that are already attracting the Alternative Online Consumer.




                                                       70
       Social Network Sites
The popularity of social networking sites is a phenomenon of the information economy. Those participating in social
networking are adverse to commercial information. Instead, to get the best use of their Facebook and Twitter pages
Scribd needs a format and content that is interesting or entertaining. The creation of a story line, competition, or
Scribd character can attract an audience that may become a distributor of that information, thereby expanding
Scribd’s following. It is highly recommended that Scribd hire a social networking blogger/monitor to keep any blogs or
social networking efforts current and engaging.

       SEO/SEM
Search engine optimization will be boosted by enhancing content on the Scribd website, creating a blog page or
mini-site, creating a content rich Community landing page, where content is derived from customer value drivers. In
addition, search terms will analyzed and put into place for best optimization results. In addition, SEM tactics would
include pay per click purchased listing that generally live in a column to the right of the natural listings on general
search engines such as Google and Yahoo! as well as search engines tailored to the common interests of the
Alternative Online Consumer.

Advertising
Advertising, in this early phase of the promotion plan, will be limited to print advertisements in alternative magazines,
and a web advertising campaign consisting of banner ads and SEM measures including links from the sites the
alternative online consumer would most likely go to based on shared interests and other psychographics.

      Print Advertising
Types of publications will include alternative attitude publications, such as Utne Reader magazine, alternative lifestyle
publications, such as Green Living, outdoor lifestyle publications such as Mountain Biking Magazine, and news
publications, such as The Economist. (Bianca please fill in correct names.)

Initially a series of three ads will be developed, and will rotate on a schedule using a pulsing method to ensure
frequency without risking overexposure. After six months of run time, another series will be developed and placed into
the rotation.

       Web Advertising
Whenever possible, we will secure space in the online version of the publication as well as the printed publication. If
print placement is cost prohibitive for any of our selected publications we will place ads on the online versions of the
magazines only.

Public relations and social media
Public relations will have a significant role in developing brand awareness. Relationships with influential bloggers,
writers, literary celebrities, and will be developed on a one on one basis, and that group will be encouraged to
become ambassadors for Scribd, by blogging, tweeting, and other forms of social media endorsement. In addition,
new media relationship will be pursued and existing media relationships will be strengthened, and an aggressive
schedule for press releases, announcing new partnerships, new innovations or company news will be put into place.

Event Sponsorship and Participation
Rather than exhibiting at trade shows to target the alternative online consumer, promotion plan dollars will be put
toward sponsoring and/or participating at lifestyle types of events, such as large music festivals or urban art and
literary festivals. Guerilla tactics will be used at those events, including wild postings or promotional giveaways. An
example of a promotional giveaway would encourage use of the Scribd website, such as a promotional code that,
when entered into the site, is redeemable for $25.00 to $50.00 worth of digital publications.

Promotions
Online promotions will be used to convert site visitors to customers including an offer to first time buyers that
discounts the first publication purchased by 20%.

Campaign Plan
After analyzing the company’s current marketing tactics, it has become aware that Scribd needs integrate more media
in their strategy to increase brand awareness and market share. Scribd’s current marketing plan was not available to
the public, so the group has to assume the different types of marketing Scribd is doing at this moment.




                                                       71
Current Media Plan
Scribd has recently hired Tammy Nam who is Vice President of Content & Marketing (Scribd.com) to boost their
marketing program. What the group has observed is Scribd does very little marketing and relies on word of mouth
to increase brand awareness. The company relies on public releases to inform consumers about recent product
changes, partners, and other company related information. Scribd also markets themselves by placing their logo
on documents. This way, if a document is embedded onto another website, Scribd’s logo will be seen by multiple
markets regardless if they are reading the material on Scribd’s website. Other than public releases and branding,
Scribd has done little marketing. The group has yet to learn about advertising on television, internet, outdoor,
newspapers, or magazines.

Media Plan
As an online social publisher, and an e-tailer Scribd wouldn’t be served best by a traditional media plan. Instead, most
media dollars will go to online efforts, with a smaller budget spent on placement in selected print publications.

Schedule and Timeline
Following are media schedules for 2010, 2011 and 2012. 2010 is split into 6 month sections.

For 2010, the advertising schedule will be he heaviest because Scribd is introducing itself for the first time through
various media. Scribd will utilize a pulsing advertising schedule and will advertise heavily during the launch of Scribd,
and the introduction of the three advertising campaigns.




Table 7-l8: Media Schedule 2010
(Source: Bianca Shedd, 2009)




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For 2011, Scribd will offer the same promotions and advertising in the same publications, however, it wil decrease
the number of ads run in each. Scribd will still run heavy advertising in the beginning, middle, and end of the year to
coincide with advertisement rotations.




Table 7-19: Media Schedule for 2011
(Source: Bianca Shedd, 2009)

For the third year, Scribd will neither increase nor decrease advertising from the previous year. Scribd wants to
maintain this amount as they will still continue to introduce new products and advertise upgrades to current products
and services.




Table 7-20: Media Schedule for 2012
(Source: Bianca Shedd, 2009)




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Pricing Plan
Pricing Objectives
The table below establishes the pricing dynamic of Scribd in their market by identifying key performance indicators. This
table will help determine the pricing plan objectives, as well as select a pricing method.




                 Table 7-21 Pricing Dynamics
                 (Source: Robert Harmon Lecture Slides, 2009)


Level of Desire for the Product/Service
Cloud computing and social publishing networks have become very competitive markets, and many people are looking for a
place to store and publish their work. Scribd has the worlds largest readership for a social publishing networks with around
60 million readers each month. (Scribd.com, 2009)

Distinctiveness from Competitive Offerings
Scribd’s innovative technology is distinctive from its competitors, but their offerings are similar to many of their competitors.
This is why Scribd fits under both categories of substitutes and distinctive. Although Scribd has industry leading technology,
it is easy for competitors to convert their software to compete. Scribd has been named in the top fifty best technology
startups by Business Week and YouNoodle; due to their distinctive publisher partnerships and rapid growth (Ricadela, 2009).

Importance of Price in the Value Equation
Being a web-based company means that the consumers have Scribd’s competitors prices at their fingertips. Amazon
in particular has extremely competitive prices on e-books. Although Scribd may not be the low price leader, they are
helping writers and publishers cash in. Many displaced authors or journalists are turning to make profit is Scribed, which
“invites journalists to publish their work, reach new audiences and potentially profit from stories that cash-strapped news
organizations might not have the resources to publish”. (Tenor, 2009)

Ease of Duplicating the Competitive Advantage
New and improved technology is constantly being innovated. Advanced technology such as iPaper, and enhanced
embedding capabilities is what currently gives Scribd a competitive advantage. The competitive advantage which will be
hard for competitors to duplicate is Scribd’s unique partnerships with publishers. Simon and Schuster will offer 5,000 e-titles
through Scribd (Rothman, 2009).

Speed of return on Investment
Scribd is able to profit from both publication sales and marketing, and receives payment upon each purchase. Scribd is also
able to outperform their competitors by sending the sellers of publications emails and up to date sales reports every time
they sell a product, unlike their competitor which often produce reports every 6 weeks. (Savikas, 2009)

Importance of Innovation
To keep their competitive advantage, Scribd must constantly have industry leading technology. Scribd is constantly looking
for ways to solve consumer problems through continuous innovation. One way they do this is ensuring protection to writers
by sending all salable content though a copyright verification system. (Slattery, 2009) Scribd believes in liberating the written
word though technology “At Scribd, we built a technology that’s broken barriers to traditional publishing and in the process
also built one of the largest readerships in the world”. (Scribd.com, 2009)

                                                           74
Importance of Personal Selling
Scribd is a social publishing network, which is what differentiates them from many of their large competitors. Scribd truly
believes in making their service a personal experience, they have created a place where everyone can be a part of the
publishing experience. Scribd is constantly updating their website interface to ensure ease of use and quality. “These are the
first of many improvements that are designed to make it easier for Scribd users to create communities around works they
love and to communicate to their readers and friends.” (Scribd.com 2009)

The key pricing indicators (KPI’s) help evaluate the market situation, and evaluate the best pricing strategy. They have
showed Scribd’s differentiation in the market as well the importance of innovation, personal selling, and price. The KPI’s
above show that the pricing dynamic leans towards skim pricing.

Pricing Strategy

Value-Based Pricing Model
Due to the importance of customer intimacy in Scribd’s business structure, we thought a value-based pricing structure is
recommended for Scribd. The value-based pricing structure is based on the customers perceived value of the product or
service .This pricing structure facilitates building CRM with the consumer, as well as the lifetime value of the customer.

Perceived Value
Perceived value is part of a value-based pricing, in which the value the exchange for it or payment. (Harmon, 2009)
Currently Scribd is charging a premium price for some of the publications, this is because they let the author choose the
price, and give the copyright owner 80 percent of the selling price. This pricing freedom has caused many writers and
publisher to charge more for the materials, compared to Amazon. Scribd also offers a second option for pricing called
automatic pricing. With automatic pricing the author can use Scribd’s algorithm program to determine the “best price” for
the document. With either offer the minimum charge is one dollar. (Scribd.com, 2009)

Skimming
Skim pricing is part of a market-based pricing strategy. In order to have market-based pricing strategy, a business must
focus on competitors as well as customers. (Best, 2009) This includes a broad understanding of the customer’s needs, and
the ability to produce a product that meets those needs especially the needs not being meet by competitors.

Value-Based – Hybrid Pricing
Hybrid is a combination of both skim and penetration pricing, where the goal is to gain a margin above recovering the
total cost. Another important aspect of a hybrid plan is that there is a concentration of second market discounting, which
maintains a premium price or skim the gained market, while discounting for new entrants. To successfully gain market share
In this competitive industry, Scribd has to find a way to reach out to new users. This pricing structure is customer centric
based, as well and financial goal oriented.

There are several ways for Scribd to adjust their pricing plan to offer incentives to new users. One example is promotions,
such as discounts for initial purchases or for a trial period. We also propose that Scribd should offer a membership
programs for schools, businesses, and individuals. These pricing strategies can help Scribd obtain higher sales, as well
as bridge the competitive gap with Amazon. Scribd needs to find creative ways to differentiate their pricing strategy from
competitors in order to gain market share, while still maintaining their core values.

The table below illustrates the correspondence between perceived value and potential price levels. This table helps explain
the current pricing strategy, and plan for future pricing strategies.




                                                         75
                          Key
                          A      Strong premium price
                          B      Premium Price
                          C      Price Equal to the competition
                          D      Moderate discount necessary
                          E      Deep discount needed


             Table 7-22 Perceived Value
             (Harmon, 2009)


Customer Reactions
Scribd seems to be getting a good reaction from customers, although they don’t generally compete with Amazon, when
it comes to best-seller prices, scribd often is viewed as generally inexpensive. Customer are happy with the content and
reading experience which gives Scribd a high perceived value, which in return translates in the a higher willingness of the
consumer to purchase.

Competitor Reactions
competitor reactions from Scribd’s main competitors is relatively low. Amazon is a large enough company that they are not
extremely concerned with startups such as scribed. Amazon deals in volume, and has enough market share that they can
price accordingly. Amazon is able to take a small hit on best-sellers, to promote their low-cost price structure.

Break Even Analysis




Table 7-1 Break Even Analysis
(Source: Liam Flaherty, 2009)




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SECTION 8
IMPLEMENTATION

    Scribd’s implementation plan coincides with the marketing strategy described the previous section, Marketing
    Strategy. The plan provides a road map to assist in the achievement of all the objectives Scribd must meet increase
    profits and value, and remain the innovation leader in the online publishing and e-book sales industry. This section
    includes financial information, including the overall marketing budget, and recommendations for staffing and
    resources.

    The financials include a three-year pro forma profit and loss statement, and a capital budget. Each of those are
    expanded upon. The financial analysis is a tool for Scribd to help manage and control the marketing plan in gaining
    market share and launching of the Scribd reader device in late 2011. The section concludes with the organizational
    requirements need to implement our plan, including Scribd’s new organizational structure and required new head
    count.


    Financials
    The financial will show what the impact to the company will be over the next three years. They will be analyzed
    using the pro-forma P&L (Profit and Loss) statement. The P&L will be broken-down monthly for the first year and
    then quarterly for year two and three. This will be the format for the marketing budget marketing communications
    budgets, and capital budgets

    Three-Year Pro Forma P&L
    The forecasted three year profit and loss potential of Scribd is presented by using a standard profit and loss (P&L)
    model. To complete the model Scribd’s sales and cost of goods sold (COGS) were first calculated to find out the
    company’s gross profits over the next three year. The next step that needed to be completed is the calculation of
    the company’s operating expenses which included (SGA) sales, general and administrative, and (R&D) research and
    development expenditures. The third step is to subtract the total operational costs from the gross profits to determine
    total income from operations otherwise known as EBIT. The fourth and final step is to deduct taxes, which are
    discounted at the standard rate of 35%. Once all calculations are completed the model flushes out Scribd’s net profits
    for each year. This is done on a monthly basis for the first year and quarterly for years two and three.

    Gross Sales and Revenue
    Gross sales and revenue are based on sales forecasted from the Marketing Opportunity Analysis the forecasting
    model states that Scribd will capture 15-19% of the total e-book by the end of three years including the release of the
    Scribd e-reader. Analysis of the TAM shows that Scribd’s e-book market will reach 140 million people by the end of
    2011. With a 15-19% of market share, Scribd should sell around 67 million e-book over the three years. With Scribd’s
    user based pricing structure the average gross profit will be an estimated $483 Million over three years. The P&L
    charts are on pages 78 and 79.

    COGS (Costs of Goods Sold)
    Costs of Goods Sold are the direct costs attributable to the production of the goods sold by a company. This amount
    includes the cost of the materials used in creating the good along with the direct labor costs used to produce the
    good. It excludes indirect expenses such as distribution costs and sales force costs. COGS appear on the income
    statement and can be deducted from revenue to calculate a company’s gross margin (Answer.com 2009). For
    Scribd, the COGS takes into account the 80/20 split that it gives to the publishers. It also includes a 1% cost for
    the downloading, uploading and storage of the document. This number must be averaged due to the fact that each
    document is priced individually by the publisher. Over the next three years the estimated COGS has been forecast to
    increase from 81% to 81.5% in year two and 82% in year three.

    Research and Development
    Research And Development (R&D) is the investigative activities that a business chooses to conduct with the
    intention of making a discovery that can either lead to the development of new products or procedures, or to
    improvement of existing products or procedures(Investopedia.com, 2009). Scribd R&D costs over the next three years
    are estimated to be 10%, 12%, and 20% per year based on gross sales for the month or quarter, depending on year
    one, or year two and three. R&D over the three years is estimated to be $56,320,237. R&D must be constantly on the
    rise for Scribd to take a leadership position in the industry.


                                                         77
Taxes
Taxes for Scribd are estimated at the industry standard of 35% of income from operations.




Table 8-1 2009 P&L




Table 8-2 2010 P&L Projections




                                                    78
Table 8-3 Totals 2009-2011 P&L



Marketing Budget
The marketing budget is one of the more difficult parts of the marketing planning process. Specifying the budget
does not need to be a precise process but allocations must represent a logical connection with the strategy and
performance objectives. (Best, 2009)For Scribd this really rings true with the user of the service setting prices it is fairly
hard to estimate the forecasted yearly sales.

Scribd’s marketing budget is formulated using the projected sales approach. The is a method where the marketing
budget is based off of projected sales and using past marketing information as a percentage of sales. The total
marketing budgets are listed in the following table moving from the three year total and then working from year though
to the third year.




Table 8-4 Total Marketing Communication Budget


Scribd’s SGA budget starts out at 7% for year one and increases to 10% as the company hires more employees and

for the launch of Scribd e-reader.




                                                        79
The marketing budgets below show how the marketing budget was broken down over the three years. This was
a substantial part of the overall marketing budget. This is due to the fact that Scribd is trying to brand awareness,
increase number of visitors to the website, conversion of visitors to consumers, increase revenues from purchases,
develop loyal online social community.




         Table 8-5 Totals SGA 2009




         Table 8-6 Marketing Budget 2010




         Table 8-7 Marketing Budget 2011




                                                      80
Controlling the Marketing Plan
Scribd’s intent is to run an integrated marketing campaign. “Integrated marketing communication is an aggressive
marketing plan that captures and uses an extensive amount of customer information in setting and tracking marketing
strategy” (entarga.com, 2009). This will insure that consumers will be provided with consistent messaging and
branding throughout the marketing campaign. All branding and other marketing communications will need approvals
from content and brand managers.

Internet:

The majority of the communications budget will be dedicated to website expansion, SEO/SEM, blogging and mini-
sites, and the development of a strong and influential ambassador program aimed at writers, publishers, literary
celebrities and celebrity bloggers.

Advertising and Marketing Communications
The advertising will continue thought 2010-2011 concentrating on the Internet media and social media tactics,
including a strong thought-leadership campaign and a community-based mini-site. There will be a limited print
advertising campaign as well. In 2012 there will an additional campaign to launch the new e-reader. This will include
the same tactics as the primary campaign.

Promotions and Sponsorships
Promotional dollar spent will be 3% of the marketing budget. Promotions will include 25% and 50% e-coupons that
will be redeemable on the next purchase. This will continue through 2011. In 2012 promotions will be geared towards
sales and adoption of the e-reader.

A separate sponsorship budget will be set aside for special events, schedule to be determined.

Capital Budget
Scribd’s capital expenditures are minimal at this time. The company rents their office space and the servers. As the
company grows and begins ramping up to produce the e-reader the company will began to purchase a substantial
amount of capital items.

Initial Rate of Return/Return on Investment
Initial Rate of return (IRR) is a very important number. IRR is used by many people in the business as a standard
to judge a company’s profitability of an investment project. The internal rate of return on an investment or potential
investment is the annualized effective compounded return rate that can be earned on the invested capital.

In more familiar terms, the IRR of an investment is the interest rate at which the costs of the investment lead to the
benefits of the investment. This means that all gains from the investment are inherent to the time value of money and
that the investment has a zero net present value at this interest rate. (Feibel, 2003)

After the investment and the project go live the ratio used to evaluate the products is the Return on Investment ratio.
Performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of
different investments. To calculate ROI, the benefit (return) of an investment is divided by the cost of the investment;
the result is expressed as a percentage or a ratio. (Investopedia.com, 2009) For Scribd the ROI and IRR are:

IRR: 7.79%

ROI: 113%

Based on all this information it is recommended that Scribd continues to grow their market share in the E-book
market and in 2011 release its own readers which will compete with Amazons Kindle and the Sony e-reader.

Controlling the Marketing Plan
A level of control needs to be maintained to ensure that Scribd’s marketing plan stays on track and is implements
both properly and in a timely manner. This will be managed with a pre-launch timeline, which will deal with logistics,
product development and marketing items. The post-launch timeline will focus more on metrics to measure the
success of the marketing plan.




                                                      81
Time Line – Launch
The pre-launch activities for the Scribd e-book reader started in August 2011 and fall into two very distinct categories.
The first being the product timeline which consists of product development, product packaging, product testing,
manual development, manufacturing ramp and finally, product in stores. The second category is Marketing Timeline
which involves announcing the reader, marketing strategy development, marcom plan, advertising plan, website
plan and SEM/SEO plan. In the last five weeks of this timeline, from the fourth week in November until the end of
December 2011, the product and promotional materials are rolled out into the retail setting. The Scribd reader will
officially be available at that point and should be a rousing success. Table 8-8 displays the timeline for all the pre-
launch activities.




Table 8-8 iPhone Pre-launch Timeline


Tracking & Monitoring
Once the pre-launch activities are complete and the product is launched and in the marketplace, the focus switches
to monitoring the effectiveness of the marketing plan implementation. Chart 8-9 below shows only the first 6 months
of the monitoring of the marketing plan.




Table 8-9 iPhone Post-launch Timeline


In an effort to properly monitor the marketing plan via the post-launch timeline (Table 8-9), there are a number of
metrics that will be reviewed to ensure satisfactory performance.

Marketing Metrics

Market Research: Market research will help to figure out where Scribd is in the market in terms of penetration and
growth in new markets.




                                                      82
Competitive Analysis: This will track how well Scribd is doing relative to their competitors in terms of service and
products.
Brand Awareness Survey: This survey will track the overall awareness of Scribd as a brand. By July 2010, Scribd
hopes that brand recognition is increased by 75%.
Customer Satisfaction survey: Customer satisfaction regarding the e reader product/service will be measured one
month after launch and every month after that.
Advertising Effectiveness: This will be evident based on the results of the brand awareness surveys.
Product Availability: Availability will be tracked indefinitely after launching the product. This will ensure that supply
meets demand and will limit the missed sales.
Financial Metrics

Marketing Budget: Marketing budget will be compared to the net profit that is in the pro forma plan for 2009, 2010,
and 2011.
Sales Revenue: Sales revenue will be compared to the net profit that is in the pro forma plan for 2009, 2010, and
2011.
Gross Margin: The margin for the e book reader will be 50% of sales. Tracking this will ensure that any potential
pricing issues are flushed out before they are a major problem.
Net Profit: Net profit will be compared to the net profit that is in the pro forma plan for 2009, 2010, and 2011.
Reporting
In order to keep Scribd running optimally, the founders and managers will need to keep track of their valuable metrics
that will alert them if there is a potential problem coming or if they are in the middle of one. Table 8-10 below is what a
theoretical dashboard could look like for Scribd’s monitoring efforts for 6 months after launch.




Table 8-10 Theoretical Marketing Plan Control Dashboard

Using the above dashboard to keep track of many different aspects of the marketing plan is essential for success.
This dashboard will enable Scribd to react nimbly whenever an issue is raised.


Organizational Requirement
This section of the paper is a summary of objectives, space information and systems requirements that are need to
implement and maximize Scribd’s planned attack on e-book and e-reader competitors. Without a well thought out
plan, Scribd will not be able to adapt to the rapidly changing environment. An analysis needs to be made to determine
where Scribd sits within the market in terms of its basic approach, competitive advantage, targeted segments,
customer focus, integrated marketing, use of information, integration, brand strategy and promotion strategy.

The method used to analyze the all of these factors was adapted from Robert Harmon’s Level 5 Market Leadership
Model. The model is organized on ten market leadership factors. Each factor is given a level 1 rating for naive planning
to level 5 rating for fully integrated planning (Harmon, 2009).



                                                          83
This will be further discussed and presented in the next few pages, comparing and contrasting where Scribd’s
organizations is, with recommendations as to how to get to a Level 5 organization.

Objectives
The objectives for Scribd are as follows:
1.   Create a market leadership by leveraging Scribd’s technological advantages while building a customer
     relationship which involves them in the value created by using the services that Scribd Provides. This will move
     Scribd from a level 4 company to a level five.
2.   Create a command structure that encourages integrated marketing planning.
3.   Hire the best people to insure that the company grows as rapidly as their market share. This will include staffing
     for the proposed e-reader launch in 2011.




         Table 8-11 Organization Level




                                                      84
Organization Plan:
Scribd currently has a Level 4 organizational structure. The marketing organization is shown in the chart below. All
marketing employees report to Tammy H. Nam, Vice President of Content and Marketing. All Vice Presidents report
to Scribd’s President George Consagra, who reports to Trip Adler the CEO and co-founder of Scribd. All engineers
report to the CTO Jared Friedman. The Senior Director, Jack Leidlei, Finance Accountant, and In-House Recruiter all
report to Mike McGuinness, Vice President, Business Development . In all there are 23 total employees at Scribd.




Exhibit 8-12 Organization Plan

Space, Information, and Systems Requirements
In order to successfully launch and support the e-book reader, an for general growth, Scribd will need to expand their
office space for for a minimum of 23 total employees. This will require at least 3,000 square feet of office space, which
includes offices and conference rooms. The Scribd e-book reader SBU will use the current engineers for Scribd to
assist with any overflow work that needs to be completed.

The Scribd e-book reader SBU will join with the Scribd SBU in the future to help Scribd move closer to a Level
5 organization. With the eventual merger, there will be no rise in number of employees due to the highly efficient
advanced nature of a Level 5 organization.


Conclusion
In this section, financials were covered with a three-year pro P&L and marketing budget, pre- and post-launch
timelines, and organizational requirements. From this an implementation plan was created.

The results from this section show that Scribd has a strong financial future. Even with a relatively large R&D budget,
Scribd still maintains strong financial growth. The e-book space is going to get even more competitive, and
Scribd would be at a great advantage if able to dedicate a considerable amount of funds to developing an e-book
reading device. The metrics created will help Scribd keep going in the right direction and assist in a healthy, strong
implementation of the marketing plan.


                                                      85
SECTION 9
PLAN CONCLUSIONS

    In determining the investment opportunities and viability of this company, it can be concluded that the potential for
    success far outweighs the risks. After thorough research of the industry, and the analysis of the frame in which Scribd
    operates within, the company’s opportunity maximization was presented. The results formulated are not just merely
    numbers and words on a page, yet they are backed by factual evidence, a massive following in-tune with what Scribd
    has to offer, big-time publishing companies who already have an invested stake, and venture capitalists that have
    stuck by the culture and philosophy developed by the founders from the beginning. Even after unraveling the veil with
    all of the potential weaknesses and threats, there is no doubt that Scribd can overcome these obstacles. They have
    designed a marketing strategy with the intended audience in mind, and constructed objectives that are measurable,
    achievable, and focused on building value.

    Scribd continues to attract tens of million of followers, and July 2009 was no different topping the charts with 55
    million new unique users. The TAM is 53.8 million individuals that have a buying power equaling $1.3 billion and
    a SAM (Alternative Online Consumer) of 23.3 million individuals with a buying power of over $550 million. The
    immediate revenue for the SAM will near $25 million, and the overall revenue for the first year is estimated to reach
    $28 million. The market potential and opportunity for revenue growth will enable sustainable business operations and
    provide a healthy ROI (Return on Investment) of 141%, and an IRR (Initial Rate of Return) equaling 7.79%.

    The growth strategy is geared towards forward moving innovative product progression and building value among
    the target markets. All segments will benefit from enhanced audio features and video embedding capabilities. The
    platform strategy is aligned with the growth of service and product offerings, enabling expansion of mobile platforms
    including the iPhone, iPod and Sony E Reader. Scribd demonstrates responsible thinking, allocating enough time to
    gain a larger share of the market before transitioning into the co-branded portable reading device. This overall model
    adopted many theories from Kim and Maugborgne’s Blue Ocean Strategy, illustrating the ability to drive down costs
    and increase value. This company’s overall strategy truly has the capabilities to alter the parameters that the industry
    currently operates within and change how the world read’s altogether.

    Scribd’s vision, generous partnership, and excellent attention to customer service help to position them as the online
    publisher and book seller who cares. While this company is up against giants in the industry, they will take on an
    approach that allows them to operate on a different field. The uniqueness of their service enables them to set their
    own benchmarks and establish goals driven by the wants and needs of the consumer. Both cognitive and affective
    positioning also works for Scribd, as they provide the most diverse offerings to their customers, and a vision and set
    of values that appeal to the target market. In the first two years of this young company they were able to illustrate the
    ability to build a service with the customer in mind. This demonstrates that customer intimacy leadership has always
    been a core competency, and this approach will be built on moving forward, as they continue to facilitate the co-
    creation of ideas in building value for the people who actually are using the service.

    Scribd’s brand strategy will concentrate on transcending product features and benefits that make emotional
    connections with their consumers. The focal point of their brand personality will be surrounded by themes including
    intelligence, innovation, thoughtfulness, and customer-first. All of these traits resonate with the Alternative Online
    Consumer.

    With a direct sales and distribution method, Scribd is able to cut out intermediaries and lower overall costs. Scribd will
    focus on a hybrid value-based pricing structure, which includes both skimming and penetration. Penetration pricing
    will help Scribd bring in new users with special promotional offers. Scribd will continue to skim their current customer
    base, and adapt new hybrid pricing options. With the introduction of annual newspaper and magazine subscriptions,
    along with a Preferred Customer Plan, loyal Scribd users will continue to see increased value in the service, and new
    entrants will get a chance to experience Scribd at a reduced cost during their trial period. Scribd will be able to realize
    a margin of 19%, in tune with sustaining the flexible pricing structure while maintaining a healthy return.

    This marketing plan has identified a feasible and profitable opportunity for investment. A thorough understanding of
    the framework surrounding this company indicates all the signs for success in implementation. With a service that is
    capable of altering an entire industry, a massive following in support of a sustainable culture, and the ability to change
    how the world will read altogether, Scribd has nowhere else to go, but forward.




                                                           86
SECTION 10
BIBLIOGRAPHY

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                                                      89
SECTION 12
LISTS OF FIGURES

    Figure 2.5 Scribd Value Curve – Scribd vs. Amazon ...................................................................................10
    Figure 2.6 Scribd’s New Value Curve – Present vs. Future .........................................................................12
    Figure 4-2 Segment Profile Curve...............................................................................................................25
    Figure 4-3 Segment Attractiveness based on Weighted Averages .............................................................26
    Figure 5-7 Competitive Factors Comparison ..............................................................................................38
    Figure 7-1 Marketing Objectives Dashboard...............................................................................................52
    Figure 7-2 Scribd’s Ansoff Matrix................................................................................................................53
    Figure 7-3 Scribd Growth Strategy Options................................................................................................54
    Figure 7-5 Scribd’s Three-Year Growth Strategy into a Blue Ocean ............................................................56
    Figure 7-6 Scribd Product Platform ............................................................................................................56
    Figure 7-7 Scribd Radar Chart ...................................................................................................................57
    Figure 7-9 Transition Map...........................................................................................................................61
    Figure 7-11 Product and Platform Strategy ................................................................................................64

SECTION 13
LISTS OF TABLES

    Table 2.3 Feature Advantage Benefit Requirements for Readers and Consumers .........................................9
    Table 2.4 Feature Advantage Benefit Requirements for Writers and Publishers ...........................................10
    Table 3-3 Scribd Comparative Assessment and FAB Analysis ....................................................................18
    Table 4-1 Segments and Summary of Criteria Used to Analyze Each Segment .........................................25
    Table 4-5 Segment Potential ......................................................................................................................27
    Table 5-5 Competitive Factors — Customer perspective ............................................................................37
    Table 5-6 Competitive Factors Weighted Averages — Customer perspective .............................................38
    Table 5-7 Company Strategy, Brand Position, Growth Strategy, and Market Strategy by Competitors ........41
    Table 5-8 Best in Class Rating ...................................................................................................................42
    Table 6.2 Risk Factors – Scribd ..................................................................................................................48
    Table 6-3 Success Factors — Scribd .........................................................................................................49
    Table 7-8 Key Value Drivers Relative to the Competition .............................................................................59
    Table 7-10 KPI Variables Growth Strategy Plan Objectives .........................................................................63
    Table 7-12 Product Costs ..........................................................................................................................65
    Table 7-l7 Marketing Objectives Scorecard.................................................................................................70
    Table 7-l8: Media Schedule 2010 ...............................................................................................................72
    Table 7-19: Media Schedule for 2011.........................................................................................................73
    Table 7-20: Media Schedule for 2012.........................................................................................................73
    Table 7-21 Pricing Dynamics ......................................................................................................................74
    Table 7-22 Perceived Value .......................................................................................................................76

SECTION 14
LISTS OF EXHIBITS


                                                                             90
    Exhibit 2.1 Simon and Schuster Featured on Scribd Store ...........................................................................7
    Exhibit 2.2 Scribd Relationship Graph ..........................................................................................................8
    Exhibit 3-1 Example of Scribd.com’s file download/upload flow ................................................................16
    Exhibit 3-2 Side-by-side comparison of Scribd’s and Amazon’s user download flow ..................................17
    Exhibit 5-1 Scribd First Year Porter’s Five Forces Model .............................................................................29
    Exhibit 5-2 Scribd Second Year Porter’s Five Forces Model........................................................................32
    Exhibit 5-3 Scribd Third Year Porter’s Five Forces Model ............................................................................32
    Exhibit 5-4 The Scribd Business Ecosystem ..............................................................................................35
    Exhibit 6-1 SWOT Analysis Table................................................................................................................45
    Exhibit 7-4 Image of Co-Branded Scribd/Sony Reader ..............................................................................55
    Exhibit 7-13 Cost of Data Transfer and Storage..........................................................................................65
    Exhibit 7-14 Current Organizational Chart ..................................................................................................67
    Exhibit 7-15 Proposed Organizational Chart ...............................................................................................67
    Exhibit 7-16 Scribd Distribution Channel ....................................................................................................68




SECTION 15
APPENDICES



                                                                           91
                           Project Proposal Template
                               State the Business Case

                       Course Title:              Mktg.464: Market-based
                                                       Management
                       Team Number:                      Team 2


Instructions: Use this form to submit you marketing plan proposal. Fill in
the expandable boxes on the right. You should expect the final document
to be 3-5 pages in length.


     1. Project title:                 Scribd: A 3-year Marketing Plan Targeting Consumers
                                       and Partners

                                       The business opportunities for Scribd are multi-dimensional.
     2. Describe the business          For a three-year plan we would want to focus on some key
        opportunity.                   opportunities that are most relevant to profitability and gain
        ! Include TAM/SAM              in market share, focusing on those market segments that are
                                       best matches with the current Scribd offering, based on their
          estimates.
                                       unique platform, the iPage document sharing innovation.
                                       These include the following goals and objectives:
                                            1) Gain partnerships with the major publishers of
                                                 books and textbooks, nationally and internationally.
                                            2) Gain mindshare of educators and administrators at
                                                 major colleges and universities.
                                            3) Gain mindshare of consumers of published works in
                                                 multiple categories, and specifically in the areas of
                                                 business, education and entertainment.
                                            4) Add additional services available to the authors and
                                                 publishers to maintain competitiveness.
                                            5) Take advantage of advertising opportunities on
                                                 scribd.com as another source of revenue.
                                            6) Proactively expand platform applications to ensure
                                                 their position as the most flexible, and accessible
                                                 platform for digital reading.
                                            Total Market Available is difficult to estimate at this
                                       point due to the large numbers of readers nationally and
                                       internationally. We can look into competitors’ market
                                       numbers and specifically to the Amazon Media division of
                                       Amazon, who, according to 2008 figures, is considered the
                                       largest “book seller.” Amazon Media had $5.35 billion in
                                       national sales, and $5.73 billion internationally (Rosenthal,
                                       2009).
                                           According to Scribd.com we know that they have more
                                       than 60 million readers every month, and there are
                                       publications on their site in 90 different languages.
                                          We would also estimate SAM by defining the total
                                       number of students attending national and international




Robert Harmon © 2008                          1                                  All Right Reserved
                                 colleges and universities and average dollars per year spent.
                                      Rosenthal, Morris (2009). North american book market.
                                 Retrieved June 28, 2009, from Foner books Web site:
                                 http://www.fonerbooks.com/booksale.htm


                                 Scribd’s potential consumer segments to be targeted include:
     3. Describe the potential   consumers, business, education, government and special
        segments to be           organizations.
        targeted.
                                 Consumer:
        ! Who is the
                                 The consumer segment is a very broad it will include
           customer?             everyone that download/reads printed material for the
                                 following (personal) reasons:
                                      ! Recreation
                                      ! Education
                                      ! Self-betterment

                                 Business:
                                 The business market is inclusive of all businesses who stand
                                 to benefit from Scribd for the following reasons:
                                      ! Research (sharing and obtaining)
                                      ! Embedding articles and other printed resources into
                                          company website

                                 Education:
                                 Upper education schools stand to benefit from using Scribd
                                 for the following reasons:
                                      ! Research (sharing and obtaining)
                                      ! Textbooks and other printed educational materials
                                      ! Public Information

                                 Government:
                                 Consumers within the government segment stand to benefit
                                 from using Scribd for the following reasons:
                                     ! Research (sharing and obtaining)
                                     ! Public Information
                                     ! Embedding articles and other printed resources

                                 Special Organizations:
                                 Consumers within special organizations stand to benefit from
                                 using Scribd for the following reasons:
                                     ! Research (sharing and obtaining)
                                     ! Public Information
                                     ! Embedding articles and other printed resources


                                 Scribd is a social publishing company who offers the service
     4. Describe the product     of giving individuals and businesses a place to quickly and
        and its platform         efficiently publish their written documents and who’s
                                 product are those published works.
                                 !!!!!!!!Scribd’s technology is a unique platform for publishing
                                 and viewing written works called iPaper. The iPaper
                                 document reader transforms files like PDF, Word or


Robert Harmon © 2008                    2                                   All Right Reserved
                                 PowerPoint into web documents that contain all the
                                 formatting and graphics of the original file. Another key
                                 feature of the iPaper document reader is the flexibility of the
                                 platform, which can be embedded as well as viewed in
                                 several environments.


                                 Scribd provides value to consumers, writers, and publishers,
     5. What is your value       those in the consumer market who use social and/or
        proposition?             ecommerce websites, upper education and business markets.
                                           For consumers, Scribd provides an easy-to-use
                                 social online and ecommerce website, with a wide ever-
                                 expanding, diverse inventory of published works for sharing
                                 or purchase, and multiple platform use ability so that they
                                 may have more choices of national and international books
                                 and other printed materials and resources, free or at a lower
                                 cost, easier document sharing, and a more pleasurable digital
                                 reading experience.
                                          For writers, Scribd provides an environment to
                                 express opinions and an avenue to publish work through a
                                 successful social online website, an easy-to-use uploading
                                 and sharing format, and an innovative platform that provides
                                 increased reach, quicker final edit to delivery, lower
                                 production costs, and higher volume views so that they share
                                 their work more quickly and efficiently, and significantly
                                 increase their audience and/or potential customers.
                                           For publishers, Scribd provides higher volume
                                 views, increased reach, more price control, and easy to use
                                 distribution channel that provides national and international
                                 exposure to reviewers and potential customers, increased
                                 sales, and greater profit margins for products sold.


                                 Scribd is a social publishing startup business that was
     6. Business description:    founded in March 2007 by John Adler, Jared Friedman, and
        ! Is this a startup or   Tikhon Bernstam. They have received funding of $12.8MM
          an SBU?                since 3/07 and they have over 55 million unique visitors per
                                 month to their website.
        ! If SBU, name the
          parent company.

                                 The technology is the driving force behind Scribd’s business
     7. Describe the             success. Scribd provides a technology that allows any person
                                 with an Internet connection to publish, share, and view
        technology and its       documents. Internet capabilities allow for greater reach and a
        importance:              higher volume of potential customers. This benefits
                                 consumers and Scribd’s partners including publishers,
                                 authors, writers, and poets, etc. Consumers have a resource
                                 with a vast amount of offerings at their fingertips, while the
                                 sellers now have global reach without any lag time. Writers
                                 can now get their thought to print more efficiently. The
                                 digital process also allows for more flexibility within the
                                 market, through offering consumers the option to purchase



Robert Harmon © 2008                    3                                  All Right Reserved
                                only what they really want.
                                      The iPaper file reader is a disruptive technology in the
                                file sharing industry. This new technology allows users to
                                seamlessly view content from multiple formats without any
                                delay or exporting difficulties. Similar to YouTube, it plays
                                any file source upload in Flash. This allows users to take
                                their books or journals with them wherever they go. The can
                                read the first two chapters on the home computer and the
                                next few off their phone on the train ride downtown.
                                Embedded in the offering is a specific code that allows for
                                easy sharing and searching. This gives Scribd an advantage
                                over their competition and provides more value to their
                                consumer segment.
                                     Software is available that is able to scan a users folder
                                and upload documents directly to their Scribd account.
                                Another feature involves the Greasemonkey script that
                                searches the web for documents linked to Scribd, once found
                                documents are embed automatically below the link. These
                                are also very important to the process because they promote
                                ease and increase channels.


                                Scribd is entering the extremely competitive world of
                                ecommerce. Some of the most difficult obstacles that
     8. Describe the            businesses such as Scribd must deal with are that the
        competitors in the      consumer has immediate access to their direct competitors at
        industry that you are   their fingertips. Another difficulty is how to convert viewers
                                and users to customers to make a substantial revenue stream
        targeting:              from product sales, so that Scribd is not solely surviving on
                                advertising sales and the monetization of papers. The
                                competitors can be split up into three main categories;
                                     1) Established retail websites
                                               a. Amazon.com
                                               b. Half.com
                                               c. Barnesandnoble.com
                                     2) Similar start up companies
                                               a. Huddle.com
                                               b. ISUU.com
                                               c. Officeclip.com
                                     3) Social network sites
                                               a. Myspace.com
                                               b. Facebook.com
                                               c. Twitter.com
                                     These three categories will help us understand similar
                                markets, how these companies are making their revenue
                                stream, and how they are using advertising to support their
                                sites. To properly market Scribed, it is important to
                                understand what makes them stand out from the rest, what
                                makes their technology superior, and how the company can
                                be profitable
                                and grow.




Robert Harmon © 2008                   4                                 All Right Reserved
                               Scribd is an exciting and evolving start-up online publisher,
     9. What is the            merely two plus years old, and already attracting more than
                               60 million readers per month. The vision for this young and
        significance of this   growing company, according to Scribd.com, is “to liberate
        project?               the written word — to turn everyone into a publisher and
        ! Why should you do    create the best possible reading experience on the web and
           this?               mobile platforms.” It may be time to expand that vision
        ! What other options   statement, as in March of this year they landed a contract
                               with Simon & Schuster, one of the four largest English
           did you consider?   language publishers, to sell over 5,000 of their books online,
                               and in May announced the beta launch of Scribd Store.
                               Further, Scribd’s innovative platform, the iPaper document
                               reader, is unique in its flexibility and extendibility, and the
                               Scribd team has yet to take advantage of all the applications
                               for this technology.

                                     Our team is excited about working on a project in the
                               social media and digital online space, supporting publishers
                               of all types and sizes, and providing such inclusive reading
                               material and learning opportunities to masses of consumers.
                               We were immediately enthused about this company, and in
                               agreement that we wanted to choose Scribd for our project.



                               Bibliography:
     10. Bibliography
         ! List 5 sources
         ! Annotate                1. Ante, S. (2009, June 22). An E-Book Upstart With
         ! Use IEEE or APA                  Unlikely Fans. BusinessWeek, Retrieved June 23,
                                            2009, from Military & Government Collection
            style
                                            database.
                                   2.       Inside Track. (2008, September). PC Magazine,
                                            Retrieved June 23, 2009, from Business Source
                                            Premier database.
                                   3.       Online Library Adds Books. (2009, March 19).
                                            Wall Street Journal(Eastern Edition),
                                            p. D.4. Retrieved June 23, 2009, from
                                            Wall Street Journal database. (Document ID:
                                            1663658841).
                                   4.       Scott, K. (2009, May 18). Scribbling for Scribd.
                                            Publishers Weekly, 256(20), 58-58. Retrieved June
                                            23, 2009, from Business Source Premier database.
                                   5.       (2009). June 23, 2009. from
                                            http://www.crunchbase.com/company/scribd
                                   6.       (2009). June 23, 2009, from Scribd Web site:
                                            http://www.scribd.com/




Robert Harmon © 2008                    5                                 All Right Reserved
Robert Harmon © 2008




           Customer-Value Driver
               Assessment
       Project Title   Scribd
       Course Name:    Marketing Strategy & Management
       Team Number:    2
       Team Members:   Stacy Butchart
                       Kinero Tan
                       Jason Rippy
                       Bianca Shedd
                       Liam Flaherty
                       Kurt McDonald
                       Jaclyn Teidemann




                           Copyright © 2008
                           All Rights Reserved
                        For Classroom Use Only
   Robert Harmon © 2008




              ANALYZING YOUR VALUE DRIVERS
                 STEP 1: SPECIFY MAJOR MARKET SEGMENTS
                              Key Descriptors

A. Define the major market segments (potential target markets) served.

Consumer:
The consumer segment is a very broad it will include everyone that download/reads printed
material for the following (personal) reasons:

   !   Recreation
   !   Education
   !   Self-betterment


Business:
The business market is inclusive of all businesses who stand to benefit from Scribd for the following
reasons:
   ! Research (sharing and obtaining)
   ! Embedding articles and other printed resources into company website


Education:
Upper education schools stand to benefit from using Scribd for the following reasons:

   !   Research (sharing and obtaining)
   !   Textbooks and other printed educational materials
   !   Public Information


Government:
Consumers within the government segment stand to benefit from using Scribd for the following
reasons:

   !    Research (sharing and obtaining)
   !    Public Information
   !    Embedding articles and other printed resources


Special Organizations:
Consumers within special organizations stand to benefit from using Scribd for the following
reasons:

   !   Research (sharing and obtaining)
   !   Public Information


                                      Customer Value Drivers                                            2
   Robert Harmon © 2008



   !   Embedding articles and other printed resources




B.1. Provide estimate of the TAM/SAM for each segment above.
B.2. What criteria will you use to analyze the segments?

Consumer:
HHs Using - Internet:     81,033,777
HHs Buying - Online Books 10,639,652
HHs Buying - Books        58,309,542


Business:
Book Publishers- United States    41,608
Companies- World Wide       50,000,000


Education:
Enrolled Public College    2,269,990
Enrolled Private College   4,538,478


Government Agencies
Federal: 447
State: 8,684
Local: 30


Special Organizations:
Charitable Organizations 165,628




C. Describe the profile of the primary customer for each segment.



                                    Customer Value Drivers          3
   Robert Harmon © 2008



Consumer: Downloader

   !   Meet Jill, a twenty-nine year old college graduate, who has been working for the
       same company for two years. Jill is not married and has no children. One of Jill's favorite
       hobbies is to read, however with her busy schedule she feels that she has no time to buy a
       new book. She spends an average of eight hours on the Internet. She is early to adopter new
       technologies. She was the first person in her office to have an iPhone and was blogging and
       Twittering before it hit mainstream. She makes around $65,000 a year.

Consumer: Uploader

   !   Meet Alex, A twenty–seven year old self-proclaimed environmental reporter. Alex has started
       an online magazine. He has his own blog and Twitter. Alex uses Scribd to get his magazine
       electronic distributed. With Scribd Alex can set up a group so that his followers can keep up
       to date with his newest edition. Alex is also writing a book that that will accompany his
       magazine. Alex is hoping to get a book deal from a major book publisher.

Business: Downloader

   !   Meet Steve, he is a thirty-year-old marketing manager at U.S. based car manufacturing
       company. Steve has found that he can use Scribed to share big files with his out side
       marketing agency. Steve and his agency have set up a privet account so that the files that
       are uploaded by the agency will be secure.

Business: Uploader

   !   Meet Julie, she is a 46-year-old marketing manager for a major hotel. She has started use
       Scribd to post special magazine ads that have already ran. Scribd gives her the ability to
       share her ideas.

Government: Uploader

   !   Meet President Obama, the President has use Scribd to help win the 2008 presidential
       campaign. The President used Scribd as a resource for documents related to policy, along
       with official statements.

Education: Uploader

   !   Meet Professor Dees, the Professor has decided to take all his years and knowledge and
       write a textbook for all of his classes. Professor Dees has started to use Scribd to allow his
       students a place to download the many articles that he has already written.

Education: Downloader

   !   Meet Steve, he is a 23 year owls senior at a major university. Steve has many group projects
       to work on. Steve has found that with a site like Scribd he can set up a work group to allow
       the group to read articles that he has found on

Special Organizations: Uploader



                                      Customer Value Drivers                                            4
   Robert Harmon © 2008



   !   Meet Kendra she is the founder of a charitable organization She has started to use Scribd to
       post information about the causes that her organization is fight for.

Special Organizations: Downloader

   !   Meet Mark he is part of a non-profit group. Mark gets news from the non-profit using Scribd.
       People from the Non-profit post new paper articles and product reviews for their members to
       see.




                                     Customer Value Drivers                                           5
   Robert Harmon © 2008




                               STEP 2: PRODUCT DEFINITION
                                       Key Attributes
                                                FEATURES
                  Your Product                                   Reference Product (Identify)

Service:                                              Service: (DocStoc)

Education, Business, and Entertainment -              Education, Business, and Entertainment -

Online social network, iPaper capabilities (multi-    Online social network, iPaper capabilities (multi-
platform upload/download formats/viewers), files      platform upload/download formats/viewers), files
storage, embedding and indexing potential             storage, embedding potential


Product:                                              Product: (Kindle; 2, DX)

Education, Business, and Entertainment -              Education, Business, and Entertainment -

Scribd store: Channel for publishers, authors,        Electronic paper display
writers, poets, and others to sell their work         Small and large display screens
around the world in multiple languages and            Partnership with three textbook companies for
formats                                               education and three major newspaper companies




                                              ADVANTAGES

Service:                                              Service:

Education - Indexing and embedding potential,         Education - Greater focus on segment, easy
iPaper ADI, original multi-format viewing             vertical navigation, organization, search

Business - Indexing and embedding potential ,         Business - Legal and business focus,
iPaper ADI, original multi-format viewing             promotional networking capabilities, easy vertical
                                                      navigation, organization, search
Entertainment - Indexing and
embedding potential, greater user volume and          Entertainment -
reach, iPaper ADI
                                                      Product:

                                                      Education - Mobile unit, greater offerings
Product:

Education - iPaper ADI, pricing flexibility, multi-   Business - Mobile unit
language copy
                                                      Entertainment - large and small screen display
Business - iPaper ADI, pricing flexibility, multi-    units available, book devise interface for users,

                                        Customer Value Drivers                                             6
   Robert Harmon © 2008



language copy                                        iPhone application, library storage, read to me
                                                     function, 300,000 books plus magazines,
Entertainment - iPaper ADI, pricing flexibility,     newspapers, and blogs available, full image
multi-language copy, Scribd Partner Program          zoom, bookmarks and annotations, no glare,
                                                     adjustable text size, personal document viewer
                                                     capabilities, wireless access to Wikipedia, easy
                                                     in book, library, or Kindle store search functions,
                                                     audio book capable for books, radio, magazines
                                                     and newspapers, music, and podcasts. Available
                                                     accessories from covers to stands.




                                                BENEFITS
                  Your Product                                      Reference Product

Service:                                             Service: (Docstoc)

Education - Quick and free global access to          Education - Quick and free global access to
journals and research articles, easy sharing and     journals and research articles, easy sharing and
search amongst colleagues and students,              search amongst colleagues and students, multi-
original multi-format viewing, privacy and           format viewing, previews to purchase
copyright protection, previews to purchase
                                                     Business - Quick and free global access to
Business - Quick and free global access to           business journals, internal and external file
business journals, internal and external file        sharing, storage, privacy and copyright
sharing, storage, privacy and copyright              protection, legal documents and professional
protection, previews to purchase                     opinions, networking and legal business
                                                     marketing, Increased reach and buyer potential
Entertainment -                                      for published articles, previews to purchase

Publishers - Free, iPaper capabilities, file         Entertainment -
conversion, original file view, upload from multi-
platforms, increased reach with 60MM plus            Consumers - Free, ADI File conversion, upload
online viewers (Scribd), network offers free         from multi-platforms, increased reach 4.8MM
impressions, promoted word of mouth                  monthly online viewers (Venture Beats), network
                                                     offers free impressions, promoted word of mouth,
Consumers - Free, iPaper capabilities, file          upload/download ease to multi-platforms, file
conversion, original file view, upload/download      storage and sharing, organizational tools,
ease to multi-platforms, unlimited file storage      indexed documents for search and sharing
and sharing, organizational tools, personal
public/private sharing decisions, access to user
feedback, indexed documents for search and
sharing, embedding capabilities linked access        Product: (Kindle; 2, DX)
that increases reach, 80 percent revenue share,
copyright management systems protecting              Education - Newspaper and educational
unauthorized downloads, Scribd Partner               partnerships


                                       Customer Value Drivers                                              7
   Robert Harmon © 2008



Program allows branding on publishers Scribd
pages to enhance recognition (SSD), previews             Business - Newspaper partnerships
to purchase
                                                         Entertainment - Download ease to platforms,
                                                         lower costs for written work, large and small
                                                         screen display units available, book devise
Product:                                                 interface for users, iPhone application, library
                                                         storage, read to me function, 300,000 books plus
Education - Increased reach and buyer potential          magazines, newspapers, and blogs available, full
for published articles, price control flexibility with   image zoom, bookmarks and annotations, no
80 percent revenue share (NYT)                           glare, adjustable text size, personal document
                                                         viewer capabilities, wireless access to Wikipedia,
Business - Increased reach and buyer potential           easy in book, library, or Kindle store search
for published articles, price control flexibility with   functions, audio book capable for books, radio,
80 percent revenue share (NYT)                           magazines and newspapers, music, and
                                                         podcasts. Available accessories from covers to
Entertainment -                                          stands.

Publishers - Price control, 60MM+ market
segment, world wide distribution with low costs,
Multi language copy, 80 percent revenue share
(NYT), pricing model flexibility, instant another
distribution point, immediate analytics, (Scribd)

Consumers - 5,000 plus available published
offerings, iPaper capabilities, file conversion,
original file view, upload/download ease to multi-
platforms, indexed documents for search




                                          Customer Value Drivers                                              8
Robert Harmon © 2008




                  STEP 3: CUSTOMER VALUE DRIVER IDENTIFICATION
                                     a. Economic Value

 !    Refer to Harmon and Laird (1997) and lecture slides. List and describe the
      key economic value drivers for the firm and its major products and services.
 !    Do the same for the reference product.

                Your Product                                   Reference Product

Service - Scribd                                  Service - Docstoc
(Online Social Publishing Website)                (Online Social Publishing Website)

Delivered initial cost:                           Delivered initial cost:
All documents published and shared on the         All documents can be searched, previewed,
portion sharing of the site can be searched,      downloaded and embedded for free.
previewed, downloaded and embedded for
free. The iPaper document reader allows the       Costs of ownership and disposal:
user to view or embed digital document in         There are no tangible costs to ownership and
multiple environments, thus there are no          disposal.
associated hardware or other costs. All
documents can be searched, previewed and          Price sensitivity:
downloaded or for free.                           Because there is no monetary exchange, there
                                                  is no perceived value relative to price.
Costs of ownership and disposal:
There are no tangible costs to ownership and      User revenue:
disposal.                                         Docstoc is now offering individual document
                                                  publishers an opportunity to share 50% of the
Price sensitivity:                                advertising revenue gained through the ad
Because there is no monetary exchange, there      placements on their documents.
is no perceived value relative to price for
Scribd's service offering.                        Environmental costs:
                                                  Environmental costs for DocStoc are identical to
User revenue:                                     those of Scribd.
There are no opportunities for publisher's to
earn revenue with documents published for         Note: Regarding environmental costs of paper
sharing and not purchase.                         waste and disposal and toner waste and
                                                  disposal, there could be a greater perceived
Environmental costs:                              cost based on a greater chance users may print
There are no environmental costs directly         documents more readily as digital readability is
associated with Scribd service of publishing      not as good as the iPaper document.
and sharing documents. This is a customer-
value driver relative to non-digital or printed   Search costs:
documents and books, but not relative to other    Searching is free and easy to use on the
similar digital only delivery services.           DocStoc site.

Note: Consumers of digital documents create       Switching costs:
environmental costs in terms of paper waste       There are no monetary costs relative to
and disposal and toner waste and disposal,        switching, however time and energy costs can


                                  Customer Value Drivers                                             9
Robert Harmon © 2008



however, the iPaper document sharing benefit          be perceived as extremely important dependent
to consumers is the ease and pleasure of              on the volume of published works stored.
reading on screen.                                    DocStoc is a smaller, less known company than
                                                      Scribd, with less financing. Ultimately, this could
Search costs:                                         create a lesser-perceived value for DocStoc.
Searching is free and easy to use on the Scribd
site.
                                                      Product — Amazon
Switching costs:                                      Kindle and the e-Books and Published Works
There are no monetary costs relative to               Available for the Kindle
switching, however time and energy costs can
be perceived as extremely important                   Delivered initial cost:
dependent on the volume of published works            The e-Books from Amazon Kindle require the
stored with Scribd. If it is perceived that Scribd    purchase of their hardware product, the Kindle.
is a solid company, in for the long haul, risks of    Delivered initial costs include the price each of
publishing and storing documents with this            the three available models, currently priced at
company are minimized. For a start-up, Scribd         $359.00 and $489.00. Delivered cost could
has a positive reputation and is the leader in        include shipping and handling, but Amazon is
social online publishing.                             offering free shipping with regular delivery. An
                                                      extended 2-year warranty is offered at $65.00.

Product — Scribd                                      Cost of ownership:
e-Books and Published Works Available for             The cost of ownership includes not only the cost
Purchase through the Scribd Store                     of the retail published works, but also the cost of
                                                      the hardware, the Kindle reader. The current
Delivered initial cost:                               price for the available Kindle models run from
Delivered initial cost includes purchase price of     $359.00 to $489.00. Shipping and handling is
e-Book or other published product, and cost of        included in the price for standard delivery.
shipping and handling. There are no shipping          Amazon offers a two-year extended warranty for
and handling costs associated with delivery of        $65.00.
iPaper documents.
                                                      Cost of maintenance and repair:
Cost of ownership:                                    Amazon offers a one-year extended warranty
The only cost of ownership would be interest          included in purchase price or 2-year for an
on any credit cards used to purchase.                 additional cost of $65.00. Cost of failure after
                                                      the warranty expires is the current day purchase
Cost of maintenance and repair:                       price and shipping and handling, if applicable.
There are no costs.

Price sensitivity:                                    Price sensitivity:
Scribd allows their publisher partners to set         Amazon has an aggressive pricing strategy, and
their own prices, and keeps 20% of the retail         does not allow publishers to set prices. The
price, with 80% going to the publisher. Because       publisher determines the percentage of revenue
of this pricing strategy Scribd prices range and      they receive. Publishers may find the low price
are not discounted. However, because                  strategy as a reason to look to other online
publishers receive such a high percentage of          retailers.
revenue they find Scribd a more attractive
partner than competitors. For Scribd customers        Environmental costs:
this could mean greater variety and quality of        Environmental costs use of natural resources
product. Further, there are other factors that        and environmental effects in shipping, and in the
influence price sensitivity with regard to Internet   creation and disposal of the Kindle reader.

                                    Customer Value Drivers                                                10
Robert Harmon © 2008



retailers, such as search cost and
disappointment cost, and may lower price
sensitivity, such as reputation, trust, familiarity
and pleasure (Kim & Xu, 2007).

Environmental costs:
There are no environmental costs directly
associated with Scribd products.



Kim, H.W., & Xu, Y. (2007). Drivers of price
premium in e-markets. Communications of the
ACD, Vol. 50, No.11, 91-95.




                                     Customer Value Drivers   11
  Robert Harmon © 2008




                      CUSTOMER VALUE DRIVERS (CONT’D)
                            b. Performance Value

    !    List and describe the performance value drivers for the firm and its major
         products and services.
    !    Do the same for the reference product.

                 Your Product                                     Reference Product

Service - Scribd                                      Service - Docstoc

Best reliability                                      Best reliability
Uses Amazon S3 for file serving/storage. S3           Uses Amazon S3 for file serving/storage. S3
has 99.9% uptime resulting in extremely               has 99.9% uptime resulting in extremely
available content.                                    available content.

Best feature set                                      Best feature set
iPaper online reading interface for all of their      DocStoc reader for all of their documents.
documents.
                                                      Outperforms competition
Outperforms competition                               4+ million visitors monthly.
60 million visitors monthly Has deals with
many large publishing companies.                      On-time delivery
                                                      Documents are available for immediate
On-time delivery                                      reading via their DocStoc reader.
Documents are available for immediate
reading via their iPaper reading interface.           Best technical solution
                                                      DocStoc's reader translates documents such
Best technical solution                               as PDF, PowerPointt, DOC files pixel for pixel
iPaper reading interface translates documents         to provide a seamless online viewing
such as PDF, PowerPoint, and DOC files pixel          experience.
for pixel to provide a seamless online viewing
experience.                                           Faster installation
                                                      DocStoc's reader is built in Flash, so as long
Faster installation                                   as a flash-enabled browser is used,
iPaper reading interface is built in Flash, so as     installation time is non-existent.
long as a flash-enabled browser is used,
installation time is non-existent.                    Ease of training
                                                      the DocStoc reader interface is very well
Ease of training                                      designed and makes it very apparent that
the iPaper interface is very well designed and        navigation is done with arrows. Training is
makes it very apparent that navigation is done        supplemented by their FAQ link provided on
with arrows. Training is supplemented by their        the website.
'Getting Started' link provided on the website.
                                                      Innovative solution
Innovative solution                                   Docstoc's reader offers inline viewing of
iPaper reading interface is one of the first of its   supported document types and accurately
kind that allows for versatile document support       displays the information. Also, downloading

                                       Customer Value Drivers                                          12
  Robert Harmon © 2008



as well as accurate display of all information.     of the documents is supported.

Integrate systems                                   Integrate systems
iPaper is embedded within Scribd's website          DocStoc's reader is embedded within
(as well as any other site that chooses to          DocStoc's website (as well as any other site
embed the iPaper reader within their pages).        that chooses to embed the DocStoc reader
All of Scribd's content is available inline.        within their pages). All of DocStoc's content is
                                                    available inline.
Complies with standards
iPaper offers support for 17+ different file        Complies with standards
formats and converts them all flawlessly for        DocStoc offers support for 9 of the most
reading in their iPaper reader. (scribd.com)        common file types for upload to their site and
                                                    viewing in their DocStoc reader.
Best customer service/support
Scribd has many pages on their website that         Best customer service/support
offer answers for any service/support               DocStoc has a FAQ page as well as a
questions. Also, Scribd has a dedicated e-mail      dedicated e-mail address for support
address for support.                                inquiries.

Best reliability
Uses Amazon S3 for file serving/storage. S3         Best reliability
has 99.9% uptime resulting in extremely             Uses Amazon S3 for file serving/storage. S3
available content.                                  has 99.9% uptime resulting in extremely
                                                    available content.

Product - electronic documents from Scribd
                                                    Product - Kindle
Best reliability
Uses Amazon S3 for file serving/storage. S3         Best quality
has 99.9% uptime resulting in extremely             Kindle is just thicker than a 1/3rd of an inch
available content.                                  and is 10.2 ounces.

Best feature set                                    Best feature set
iPaper online reading interface for all of their    Kindle has 'Over 300,000 books plus U.S.
documents.                                          and international newspapers, magazines,
                                                    and blogs available' (amazon.com)
Outperforms competition
60 million visitors monthly Has deals with          Outperforms Competition
many large publishing companies.                    Kindle has the largest e-book selection
                                                    compared to any of its competitors.
On-time delivery
Documents are available after purchase for          Easier Installation
immediate download or immediate viewing on          Any of the books are delivered electronically
Scribd.                                             in under 60 seconds via the Kindle's 3G
                                                    wireless connection.
Faster installation
Electronic matter bought through the store can      On-time delivery
be either read on Scribd (no installation), as a    Any of the books are delivered electronically
PDF (no installation, as most systems support       in under 60 seconds via the Kindle's 3G
PDF), or as a protected PDF (which requires         wireless connection.
installation of a specific Adobe PDF reader).

                                       Customer Value Drivers                                          13
  Robert Harmon © 2008



                                                    Ease of training
Ease of training                                    Each Kindle has a quick-start guide included
Scribd has a 'Sellers Guide', an extensive          and also gives a tutorial upon initial startup of
FAQ page, and Sellers Tutorial Videos all to        the device.
insure an informed selling experience.
                                                    Best Technical Solution
Innovative solution                                 Does not require a computer to operate
Scribd offers an 80/20 revenue sharing              which eliminates concern about cross-OS
mechanism that hopes to, and has already,           compatibility
get top talent to upload their works for sale.
This helps to establish that Scribd's store         Integrate systems
offerings are of superior quality. Scribd also      Setup and purchasing are all done from the
offers three levels of protection for their store   Kindle itself. No outside systems are needed
offering (view on Scribd, download PDF,             for use.
download PDF to be read in protected, copy-
proof reader)                                       Innovative solution
                                                    E-ink display results in long battery life and
Integrate systems                                   increased on-screen visibility. Has text-to-
iPaper is embedded within Scribd's website          speech feature so that the Kindle can ready
(as well as any other site that chooses to          any of its items to you (unless disabled by the
embed the iPaper reader within their pages).        publisher)
All of Scribd's content is available inline.
                                                    Best customer service
Best customer service/support                       Amazon has an extensive online knowledge
Scribd has many pages on their website that         base that is tailored exclusively to the
offer answers for any service/support               different Kindle models.
questions. Also, Scribd has a dedicated e-mail
address for support. In addition, Scribd has a
'Sellers Guide’, which helps the potential
sellers to better understand the process.




                                       Customer Value Drivers                                           14
Robert Harmon © 2008




                     CUSTOMER VALUE DRIVERS (CONT’D)
                            c. Supplier Value

 !    List and describe the perceptions your customers have about your company
      that may affect their beliefs about the value delivered by your company and its
      major products and services.
 !    Do the same for the reference company and its offerings.

             Your Company                                   Reference Company

Scribd is commonly being coined as a             Docstoc provides similar services as Scribd, it
YouTube for eBooks, which has both positive      is considered to be a more professional
and negative feedback from the consumer.         document-sharing site when compared to
Users are enjoying an ease of Scribd and the     Scribd. Consumers enjoy the convenience of
shared value t of sharing their work with the    Docstoc’s one click embedding. Consumers
world. Scribd has become a premier               also think the company has a strong business
innovative problem solver for many people        model due to its backing by Amazon. Much
due its ability to convert any file format and   like Scribd consumers are concerned about
embedding functionality. Consumers also like     copyright infringement, consumers are scared
the ease of having one site for both document    to put their work out there. Many consumer
sharing and eBook purchasing. Scribd has         blogs show that consumers see Scribd is a
found a way to meet specific needs of the        stronger site and lead the industry now, but
consumer by creating a realistic reading         being in the technology industry that leads
experience for eBooks. The negative side to      could diminish at any point in time with new
being compared to YouTube is the                 advancements.
consumers concern for copyright violations.
Some other concerns about Scribd include
the long-term commitment to the market;          Kindle provides a product for consumers who
consumers are concerned that the business        are looking for an easy way to read electronic
structure may not be strong enough.              books. Kindle has produced several versions
Consumers are also concerned that they may       of a device that stores and views eBooks.
be making a mistake by investing their time      Consumers who own the device feel that it is
and work into a company with extensively         getting closer to the actual experience of
competitive industry. The key to this industry   reading a paper book. Consumers are happy
is keeping a competitive advantage by            with the functionality of the product, such as its
continuing innovating new technology to meet     antiglare screen and font capabilities.
the consumer’s need.                             Consumer concerns include the upfront cost of
                                                 the device, and content pricing. There are
                                                 other concerns about the longevity of the
                                                 company, and their ability to keep the books on
                                                 file and return to them at a later time. Some
                                                 other downfalls the consumers are seeing to
                                                 the device is that it is limited to black and
                                                 white. The black and white text is functional for
                                                 books, but is disappointing for periodicals and



                                 Customer Value Drivers                                               15
  Robert Harmon © 2008



                                                   internet content.



                     CUSTOMER VALUE DRIVERS CONT’D)
                       d. Buyer’s Motivations & Goals

    !    Identify and list your buyer’s primary motivations and goals concerning the
         decision to purchase products and services of the type you provide.
    !    Do the same for the buyers of your reference competitor’s products.

               Your Buyers                            Reference Competitor’s Buyers

Motivation to Purchase — Readers:                AMAZON KINDLE
   1. Scribd.com offers a lower price for        Motivation to Purchase- Readers:
       books compared to competitors                 1. Save time purchasing a book
   2. Interactive experience                         2. Interactive experience
   3. Environmentally friendly if book is only       3. Environmentally friendly
       read digitally                                4. Reduce amount of weight and space
   4. Convenient and less time consuming                compared to a printed book
       to purchase                                   5. Portable reading
   5. Exposed to all writings and not just           6. Track notes throughout readings
       those that are published by a large       Motivation to Purchase —
       publishing firm                           Authors/Publishers:
Motivation to Purchase —                             1. Makes the book more interactive for
Authors/Publishers:                                     readers
   1. Free service                                   2. Drive e-book sales (Snyder, 2009)
   2. Ideal platform to create relationship          3. Large readership for Amazon Kindle
       with other readers (Kuo, 2002)                4. Ideal platform to create relationship
   3. Given the ability to publish their                with readers (Kuo, 2002)
       writings themselves                       Goals Concerning Purchase — Readers:
   4. Large profit received from sales               1. Become more innovative
   5. Freedom to set price                           2. Create an interactive and exciting
   6. User friendly platforms                           experience
   7. Potential increase readership because      Goals Concerning Purchase —
       of the 50 million viewers/month           Authors/Publishers:
   8. Less time needed to publish writings       Drive print and e-book sales (Snyder, 2009)
   9. Boost print and e-book sales (Snyder,          1. Gain a larger market share and
       2009)                                            awareness
   10. Opportunity to share their thoughts           2. Stay competitive in the industry by
       freely                                           offering both a print and digital platform
Goals Concerning Purchase — Readers:                    to read books
   1. Spend the lowest amount of money
       for a book                                DOCSTOC
   2. Create an exciting and different           Motivation to Purchase — Buyers:
       reading experience                           1. Free to read any books
   3. Become more aware of writings                 2. Ability to read professional documents
       besides mainstream                              on a digital platform
Goals Concerning Purchase —                         3. Environmentally friendly if book is only


                                    Customer Value Drivers                                           16
  Robert Harmon © 2008



Authors/publishers:                                    read digitally
   1. Earn the highest profit on books              4. Interactive experience
   2. Drive print sales and e-book sales            5. Exposed to all writings and not just
      (Snyder, 2009)                                   those that are published by a large
   3. Publish their work                               publishing firm
   4. Gain a larger market share and                6. Increase knowledge in business,
      awareness                                        technology, and legal
   5. Eventually sell books in retail outlets       7. Convenient and less time consuming
                                                       to purchase
                                                 Motivation to Purchase —
                                                 Authors/Publishers:
                                                    1. Free service
                                                    2. Ideal platform to create relationship
                                                       with other readers (Kuo, 2002)
                                                    3. Given the ability to publish their
                                                       writings themselves
                                                    4. User friendly platforms
                                                    5. Potential increase in readership
                                                    6. Convenient to share files with other
                                                       coworkers or business partners
                                                    7. Opportunity to share thoughts freely
                                                 Goals Concerning Purchase — Readers:
                                                    1. Save money
                                                    2. Create an exciting and interactive
                                                       reading experience
                                                    3. Increase knowledge
                                                    4. Become more aware of writings
                                                       besides mainstream

                                                 Goals Concerning Purchase —
                                                 Authors/Publishers:
                                                    1. Drive print sales (Snyder, 2009)
                                                    2. Publish their work
                                                    3. Gain larger market share and
                                                       awareness
                                                    4. Decrease time to publish work

                                                 Kuo, Y. (2004). Integrating Kano’s Model into
                                                 Web-Community Service Quality. Total Quality
                                                 Management, 15, 925-939.

                                                 Snyder, C. (2009). Major Publishers Partner
                                                 with Scribd for Viral E-Book Marketing.
                                                 Retrieved July 2, 2009, from
                                                 http://www.wired.com/epicenter/2009/03/publi
                                                 shers-part/




                                     Customer Value Drivers                                      17
Robert Harmon © 2008




                    CUSTOMER VALUE DRIVERS CONT’D)
                         e. The Buying Situation

 !   Identify and list the elements of the buying situation that impact customers’
     perceptions of the value provided by your firm and its major products and
     services and their willingness and ability to buy.
 !   Do the same for the reference product.

               Your Product                                 Reference Product

  Simplicity, ease, and convenience in           Amazon KINDEL- Amazon presents Kindle
  buying situations are distinct                 at the forefront of their website. A 2-minute
  characteristics that set Scribd apart from     video that clearly demonstrates the
  competitors. Getting to the actual site        capabilities of the product leads into
  and navigation through Scribd.com is           ensuring quality in purchase. Suggestive
  flawless in transitions from search to final   selling techniques along with customer
  purchasing transactions. From start to         testimonial are present to aid purchasing a
  finish consumers are guided through            product that cost over $300. Characteristics
  without confusion of where they are in the     such as long run savings, practicality,
  buying process. A sample portion of the        quality and ease are also used leading up to
  actual piece you are purchasing is             purchase.
  presented before final transaction to
  ensure the end product is exactly what         Amazon's checkout feature prompts
  the buyer intended to get. Cost is             consumers to purchase add on accessories
  desirable compared to competitors.             as you move towards final purchase. Add
                                                 to cart feature provides simplicity in
  Willingness to buy is heightened               checkout and wish list options are available
  according to Best, in Market-                  enabling reminders and future purchases.
  based Management. Best explains "If the
  decision to buy a product or service can       Ability to choose from the most available
  be made without the agreement or input         options in books, journals, magazines, etc.
  of several people, market growth will          ensures consumers are getting the most
  develop more rapidly. An individual            defined end product according customer
  decision maker can act quickly, without        wants and needs.
  first needing the approval of others.
   Scribd price points in correlation with       Docstoc- Clean and defined viewing.
  ease of purchase allow for less need to        Docstoc is focused in on education and
  confront others about purchase decision        business and clearly outlines search options
  compared to the Kindle product.                to get to where consumers need to be.
                                                  Suggestive alternative readings available
  Scribd account sign up and purchase are        once user has selected a reading.
  all done with simple steps on the same
  page, instead of a two-step process.           Docstoc documents are previewed,
   This ensures for faster purchasing            downloaded and embedded for

                                  Customer Value Drivers                                         18
Robert Harmon © 2008



  capability.                                  free. Willingness in use of the service
                                               becomes extremely high considering there
  Cleanliness and look of each page allows     is no risk for the reward.
  for an uncluttered buying experience.
   This site sells the written word and
  nothing else this is a key element in the
  simplicity factor.

  Suggestive selling techniques target in on
  the possible needs and wants of the
  consumer. In the entertainment segment
  this is especially helpful to consumers
  that are simply browsing for something to
  read before they board a plane. Fast,
  easy, and convenient are characteristics
  that breathe within the Scribd
  consumers.




                                 Customer Value Drivers                                   19
Marketing Strategy & Management
Summer 2009




SCRIBD MOA

Presented by:
      Stacy Butchart
      Liam Flaherty
      Jason Rippy
      Bianca Shedd
      Kinero Tan
      Jaclyn Tiedemann




                                  1
EXECUTIVE SUMMARY — SCRIBD MOA



Market Opportunity

Scribd is an online social publishing company. This is a relatively new industry. There are minor
players in the market, such as Docstoc, and major players such as Amazon. Additionally, this
arena is particularly attractive to start-ups. Still, Scribd has established itself as a true player and
continues to thrive, in part, at least, by remaining true to a vision that makes them a remarkable
service provider. To date, Scribd has been able to continuously create awareness, gaining new
potential customers (visitors to their site), and establishing beneficial partnerships at a rapid pace.

There are numerous attractive market segments on which Scribd could focus their marketing
efforts. The big competitors can cover the gambit, but creating a culture and a niche that gives
them valuable points of parity with their chosen market.

Scribd has, thus far, existed off of Google Adsense revenue and the funding of investors. With
their innovative technology and partnerships with both writers and publishers, Scribd has the tools
to successfully penetrate this market, and continue to have a competitive advantage.

Scribd’s vision is to liberate the written word, allowing all writers the opportunity to publish and
readers a wealth of high quality, digital books and publications. They offer a service that is co-
created with their customers and partners, and a positive and beneficial experience for their entire
audience. By carving out a niche as the company that cares Scribd will have a competitive
advantage that is unique. It is the experience that sells the product. Culture and community are
significant to their brand position. The big idea for Scribd, is to capitalize on all of this. Creating
the writer’s dream, and the reader’s paradise.

Upon reviewing our research and data using the market sizing and forecasting model provided in
class, (Harmon, 2009) we have come to the conclusion that the Internet-savvy College Student
segment represents the highest market potential for Scribd with $1.3 billion in potential revenue.


Competitive Advantage

Scribd maintains a competitive advantage in three major areas: price, technology, and flexibility
for suppliers. Scribd has been able to maintain low price points for books because they offer
authors 80 percent of revenues in return for them using their website to publish books. Because
Scribd offers such a high return on profits, authors are given an incentive to price low because
they still earn more on profits than any other retailer does.

The second competitive advantage Scribd maintains is their technology used to upload and
download books. iPaper has allowed Scribd to stand out among competitors in terms of speed for
downloading books and user friendliness. Current suppliers of e-books have yet to master a
downloading technology that creates convenience for both the author and the reader.

The last competitive advantage Scribd maintains is their ability to open their service to all authors
who want to publish their work regardless of whether or not they have formally gone through a
professional publishing firm. This gives Scribd a huge advantage because the suppliers are
limitless in terms of the type of work that can be uploaded. People are attracted to this website
because they have the largest variety of reading material available with just a click of a button.

Competitive Assessment



                                                   2
Scribd’s two main competitors are Amazon Kindle and Docstoc.com. Amazon stands to be a
strong competitor due to their handheld reading device (Kindle), which makes the reading
experience more interactive. They also have an already established readership, which creates a
challenge for Scribd to convert customers. Docstoc is a strong competitor because they offer a
very similar service that allows all authors to upload books and all readers to purchase books
online.

Analyzing Scribd’s strength and weaknesses based on competitive factors, Scribd needs to invest
more energy in innovative technology. Currently Scribd is following behind Amazon Kindle but is
ahead of Docstoc. As Docstoc improves their technology to iPaper’s capabilities, it is crucial
Scribd be one step ahead. Scribd needs to co-create value with customers that can surpass the
value created through Amazon Kindle. Scribd needs to enhance the reading experience in order
to become the number one leader in e-books.


Net Assessment

After reviewing and analyzing Scribd’s competitiveness within their market, we feel as though
Scribd has a viable reason to move forward. Scribd is the provider of the most advanced social
documentation distribution platform, still, this is an important time for Scribd to gain as much
market share and awareness as possible. Their core competency will at some point become an
industry-shared technology, so Scribd must create a large consumer base while focusing on
adaptive and innovative ways to increase their current value offerings. As their consumer volume
grows Scribd must follow their vision to promote their culture and enlarge create a loyal following.
Their vision is clearly key to their big idea. The big idea was formed from their overall vision and
represents the culture they serve. Scribd needs to stay true to this vision in order for them to
benefit from a following of consumers that believe Scribd to be the best channel representing
their desires and needs.




BUSINESS OVERVIEW



The Business Opportunity — Scribd’s Big Idea

From the beginning, Scribd founders had a vision. With their company and it’s website, they
wanted to “liberate the written word”. This vision honors the authors of written works, and benefits
the reader by attracting works of all kinds. They want to make it simple to publish and make your
work visible and available to the masses. With the addition of the Scribd store, Scribd has created
a revenue stream that takes them from being a social online publishing site, to a potentially very
profitable enterprise. It will be a challenge for them to compete strictly in terms of e-commerce, as
they are challenged by the behemoths of the industry.

Scribd’s biggest business opportunity then is to commit to the vision, staying advocates of writers
and authors, continuing to offer the most innovative and popular platform so that readers can truly
enjoy the reading experience. Their niche, if you will, is in the quality service they offer, and the
pairing of what writer’s need and want, and what readers desire.

Scribd’s Big Idea


                             A writer’s dream, a reader’s paradise.



                                                 3
Company Overview

Scribd was founded in 2007, and is currently the world’s largest social network publishing site.
The company offers a variety of services that include; free storage place for personal or
professional documents, quick and efficient publishing, and a place for publisher to sell to
consumers. Scribd’s innovative technology creates a unique platform for businesses, educators,
students, and both leisure and professional writers to store and view written documents.
Scribd has created a superior viewing and publishing experience through their technology called
iPaper. iPaper has made it convenient for users to transform their current PDF, Word,
PowerPoint files, or various other formats, into the universal iPaper format, for easy viewing and
storing. Scribd’s primary business functions are to provide services on a website that give
consumers, publisher and writers with a place to connect and share.
Consumers are provided with an easy-to-use one stop website and social online network.
Scribd’s inventory currently consists of millions of article with around 60 million plus readers.
Scribd provides the customers with easy document sharing, improved imbedding functionalities
and an incomparable digital reading experience
Scribd provides writers with a unique atmosphere and opportunity to express their opinions and
publish their new ideas and past work. Scribd technology provides enhanced editing, an easy-to-
use platform, and industry leading formatting and viewing; which creates a easy low cost avenue
for writers to publish and share their written works. The strategic partnership that Scribd has
formed and continues to form with many publishers also makes it profitable for writers to reach
their existing customer base and, at the same time, the potential to grow their customer.
Authors and publishers are being provided a profitable revenue source from Scribd, derived from
increased consumer reach, better price control, lowered cost of distribution, and higher volume of
general traffic who may convert to customers upon previewing that writer’s work. The gained
exposure, in turn, helps the publisher to reach more readers and find new writers.
The social publishing network market has vast competition, with several startup companies, and
many venture backed competitors. The introduction of EBooks created a new playing field for
startup companies, and existing retail websites. While key competitors concentrated on
profitability from sales and advertising, Scribd has primarily concentrated on innovating new
technologies and building strong associations with publishers. The launch of the iPaper positively
positioned Scribd in the market. Scribd’s strategic partnership with publishing companies gives
them competitive advantage, due to the constant evolution of new technology.
Scribd’s strengths include their ability to meet specific needs of the customers through their
iPaper technology, which include convenient formatting, embedding functionalities, and advanced
viewing experience. Another strength of the company is lower costs for the writer and reader. It is
free for the consumer to store, and view purchased material, and free to upload and publish.
Unlike Amazon, where you have to purchase a device to view their digital publications, there are
no costs of entry. Weaknesses include the constant consumer concern of copyright issues, along
with consumer concerns about the longevity of the company ands its commitment to the market.
Scribd’s vision is to “liberate the written word”. Their goal is to give everyone a chance to publish
their work, and to create a superior viewing experience for everyone. This vision has created the
largest social publishing website which is constantly gaining a larger audience.



Products and Services

Product Description
Scribd is an online document-sharing website enabling customers to upload and download
documents in a variety of formats using its newly developed iPaper technology. iPaper is built
with Adobe Flash and fully equipped to work with Windows, MacOS, and Linux, converting
millions of PDF’s, PostScript files, Excel spreadsheets, and PowerPoint presentations into the

                                                  4
best viewing experience on the web. Scribd users can take advantage of the embedding
capabilities enabling bloggers and websites to instantly embed iPaper documents into their work.

Scribd currently has adopted an online store that features Simon and Schuster, the 4th largest
publishing company in the United States, at the forefront of the Scribd store. Yet, the beauty of
Scribd’s service is that anyone can upload and share with the world. With over 60 million unique
hits every month, 5 million iPaper embeds, and millions of documents being shared, Scribd
attracts users ranging from college students and publishing companies to the World Bank, and
including President Barack Obama.


                  Feature                            Advantage                                      Benefit
 iPaper Multi-Platform              Ability to upload and download, from           Converts documents into iPaper format
                                    several different platforms                    allowing users to upload and download
 Uploads/Downloads                                                                 without incurring switching costs.
 Easy to Use Website                Ability for easy search, navigation, and       Clean, convenient, and simple website
                                    purchasing within the site.                    allows flawless navigation and search.
                                                                                   Quick and easy purchasing experience.
                                                                                   Also displays sample of writing before
                                                                                   actual purchase.

 Reading Experience                 Scribd uses iPaper built with Adobe flash.     Ability to display document regardless
                                                                                   of if you are using Linux, Windows, or
                                                                                   MacOS
 Embedding Capabilities             Allows users to embed Scribd documents         5 million embeds currently exist allowing
                                    within users own personal work or              users to view embeds on any
                                    documents.                                     documents without the need for links
                                                                                   and ability to view the embeds exactly
                                                                                   how they appear on Scribd

Figure 2-1 Feature Advantage Benefit Requirements for Readers/Consumers


The Scribd search and suggest feature is clear and concise — guiding users to the exact written
documents they need. With broad categories that are split into “Books,” “Business,” and
“Academics” it is easy to split up users looking for business or entertainment. The ease and
convenience of the one step sign up and payment ensures users are not wasting time to get the
documents they need. All of these elements add up, creating an easy-to-use website. A display
of part of the actual document is shown before purchase to ensure confidence that readers are
getting exactly what they signed up for. Embedding capabilities allows users to easily use Scribd
documents without creating a link to the site, and iPaper embeds are viewed without leaving the
owners website or blog. Scribd users upload and download on the platform of their choice,
creating a low cost environment for publishers and readers alike to share the written word.

             Feature                              Advantage                                        Benefit
 80%/20% Revenue Split            Gives publishers 80% of revenue of             Allows publisher to receive greater
                                  product sold with remaining 20% going to       profits in comparison publishing with
                                  Scribd.                                        Scribd competitors.
 Multi-Platform Distribution      Published work available on e-reader           Allows for efficient distribution to
                                  devices as well as most future mobile          potential consumers of publishers.
                                  devices.
 Flexible Pricing & Preview       Real-time changes to pricing, preview and      Allows publishers to quickly make
                                  download options.                              changes to published pieces.
 Built in Viral Marketing         All sales items are capable of being           Publishers are instantly increasing the #
                                  shared with Scribd’s 60 million monthly        potential buyers when publishing with
                                  visitors.                                      Scribd.

Figure 2 Feature Advantage Benefit Requirements for Writers and Publishers


Scribd offers a service that is a publishers dream with pricing structure that is all about the
publisher first. With a generous 80/20 split and the capability to set your own prices lures many
publishers in. They are empowered with the ability to make changes to their documents around
the clock. Publishers are also able to take advantage of the millions of hits that Scribd receives
every month in increasing potential sales.
Value Proposition


                                                     5
                                                                  Scribd is an innovative global resource
                                                                   where writers and publishers thrive,
                                                                   and readers share, learn and enjoy.


                                                                                                                                    Value Proposition
 ("                                                                                                                                 as a Download Service
 '"
                                                                                                                                    While Amazon displays
 &"                                                                                                                                 over 300,000 books, the
 %"                                                                                                                                 range in offering doesn’t
 $"                                                                                                                                 begin to compare to variety
                                                                                                                                    of literature that Scribd
 #"                                                                                                                                 users have at their
 !"                                                                                                                       )*+,-."   fingertips. With work
                                                                                                                                    ranging from resumes and
                                -./%*$%*0%(




                                                                                       4#$0%(


                                                                                                6$<$&"8(1=;%#$%*0%(
                                              1"2%(.3(4,#05"2%(
       !"#$%&'()*(+$&%#"&,#%(




                                                                     6.7*8."9(:;%%9(


                                                                                                                          /01234"
                                                                                                                                    textbooks, all the way
                                                                                                                                    to newspapers and even
                                                                                                                                    cooking recipes the
                                                                                                                                    possibilities are endless.

                                                                          The comparison to
                                                                          Amazon in “dedication to
                                                                          the written word” category
                                                                          is exposed in convenience
and ease of purchase. On the way to check out while Amazon clutters the margins with credit
card offers, advertising banners, and wish lists, Scribd is there with a clean and easy checkout
and a sample section of the document to make sure your purchase needs and desires are being
met.

The majority of the shared pieces on Scribd are free and you also don’t need to buy a device that
(current cost $299) to view it. Publishers are able to make real-time changes to price points that
will ensure costs will stay competitive but never overpriced.



 ("                                                                                                                                 Value Proposition
                                                                                                                                    as a Download Service
 '"
 &"                                                                                                                                 “Profit structure” and
 %"                                                                                                                                 “pricing freedom” in
 $"                                                                                                                                 conjunction with
                                                                                                                                    “dedication to the written
 #"
                                                                                                                                    word,” are key factors in an
 !"                                                                                                                       )*+,-."   overall comparison of
                                                                                                                                    Scribd’s offerings to
                                -./%*$%*0%(




                                                                                       4#$0%(


                                                                                                6$<$&"8(1=;%#$%*0%(
                                              1"2%(.3(4,#05"2%(
       !"#$%&'()*(+$&%#"&,#%(




                                                                     6.7*8."9(:;%%9(




                                                                                                                          /01234"
                                                                                                                                    publishers and writers,
                                                                                                                                    relative to Amazon’s
                                                                                                                                    offerings. Amazon’s main
                                                                                                                                    goal is to make a profit
                                                                                                                                    from overall book sales
                                                                                                                                    and ultimately create the
                                                                                                                                    most effective strategy to
                                                                                                                                    increase revenue for the
                                                                                                                                    company. Writers and



                                                                                                                      6
publishers view Scribd as an affordable place to publish that maximizes publisher’s income. This
is all achieved at Scribd while still maintaining the integrity of the writers by having a focused
dedication in sharing the written word.




Brand Identity

The founders of Scribd have a vision. They want to “liberate the written word”, and to turn
everyone into a publisher and create the best possible reading experience on the web and mobile
platforms.” Their vision is an important part of their brand identity. They have provided an easy
and efficient way for any writer to publish, and a flexible platform that makes reading on a screen
a much more pleasurable experience than it had been before iPaper technology. At this point and
time they’re young brand equity is positive among website visitors, of which there are millions per
day, and some of the major press.

The name Scribd comes from the word Scribbled. It’s fun and catchy, memorable and feels a bit
nonsensical, much like the names Yahoo and Google.




The identity also includes Scribd’s logo and website, and both are well designed, clean, and user-
friendly. The logo mark depicts a simple icon of a document floating on a multi-colored circular
background, which feels creative with its blend of bright colors, and soft fading edges.




The website is important as it hub of Scribd’s service. It’s bright, clean and is easy to navigate.
Search functions are easy-to-find and easy-to-use and both readers and publishers can find what
they want right on the homepage. It has a professional, yet friendly look.

Scribd has a brand identity that already makes them look like a significant player and appeals to
today’s online consumers.

Strengths and Weaknesses



                                                 7
Scribd provides a service that is growing in correlation with it potential market size. As the use of
computers and Internet access continue to grow, the demand for a service that is capable of
efficiently delivering real-time documents and books is being more and more widely accepted.
With Scribd’s iPaper technology, embedding capabilities, and a captivated audience participating
in uploading and downloading, and all the buzz surrounding Scribd, 60 million viewers a day have
already been fascinated enough to at least take a peek at Scribd.com.

With a pricing structure that has a leg up on their competitors, Scribd owns a vision that is in line
with what publishers are looking for. They also have created an atmosphere where writers can
feel as if they have ownership to the way their work is displayed allowing for real time changes in
pricing and formatting.

Yet, currently Scribd has a minimal share of the market with competitive monsters including
Amazon, Docstoc, and bookstores with online retail sites, such as Barnes and Nobles. Besides
the recent launch of the Scribd bookstore, Google Adsense placed advertising in the only steady
stream of revenue to sustain growth. Technology barriers including copyright issues, staying
ahead of rapidly occurring platform innovations, and highly competitive product innovation from
competitors with big time funding.


Conclusions

With a combined $12.8 million in private funding, Scribd already has a hold of the reigns with all
the necessary resources at hand. They now need to focus in on harnessing this captivated
audience, and continuing to build on the values that they have already created in their service
offerings. iPaper technology is what allowed them the current success they hold. Yet, product
innovation and technological breakthroughs are a necessity to enable Scribd to continue to thrive.

Scribd must find ways to generate revenue while still maintaining integrity to the written word and
strong relationships with current and future consumers, writers and publishers. While pricing
structure and strong partnerships are currently a strength, as the market matures Scribd may
have to reevaluate and readjust to create the most effective business plan to ensure positive
growth. While the number of products continue to grow along with innovative technological
offerings, they must maintain the uncluttered, focused, and easy-to-use website that set them
apart from their competitors to begin with. Creating a safe environment that is easily accessible
for readers and writers alike to share with one another is what feeds in Scribd’s big idea.




TECHNOLOGY ASSESSMENT


Product Technology
To understand where Scribd’s marketing plan needs to go, it is important to understand the
differentiating technology that Scribd has to offer. iPaper is Scribd’s revolutionary flash-based
document reader that allows all of the documents uploaded to Scribd, to be read on any online
web browser. This section provides an introduction to iPaper and to Scribd.com, as the site that
created the iPaper technology. Also, this section covers competing technologies, the lifecycle of
an e-book, technology partners, cost factors and drivers, and disruptive technologies.
Scribd is an electronic document sharing site and electronic document marketplace. Scribd’s is
primarily a website where documents of almost any digital format can be uploaded and shared
across the Internet, anywhere or anytime. The uploaded documents are then accessed via
Scribd’s iPaper online, flash-based document reader. iPaper has support for over 18 electronic
document formats, including PDF, DOC, and PPT. iPaper is functional on any flash-enabled web
browser and therefore is supported in every operating system that has a GUI. iPaper allows for

                                                  8
immediate viewing and sharing of documents as well as the option for making documents
available for download, or download for a fee. iPaper is also an embeddable technology so that
any blog publisher or website owner has the option to embed their documents directly into their
websites.
To ensure that the documents that are uploaded to Scribd.com retain integrity and have adequate
redundancy, Scribd uses Amazon Simple Storage Service S3. (Bentley, 2008) Amazon S3 is a
cloud-based storage system that has advanced, customizable security features, and its buy-as-
you-go pricing policy allows for infinite scalability. (Farnsworth, 2009) These features create a
secure, robust storage system for all of Scribd’s publishers’ intellectual property.




Figure 3-1 Example of Scribd.com’s file download/upload flow
Scribd has a vision that hopes to “liberate the written word — to turn everyone into a publisher
and create the best possible reading experience on the web and mobile platforms.” (Scribd
“About Us”, n.d.) Existing as an online flash-based document reader, iPaper will help to achieve
this vision. Adobe, inventors of the Flash Player, note that the Flash player is installed on “99.0%
of Internet-enabled desktops in mature markets (US, Canada, UK, France, Germany, Japan).”
(Adobe, n.d.) This fact is integral for Scribd’s success as Flash is required for online document
viewing and is beneficial to Scribd users because there isn’t any proprietary software to install in
order to utilize Scribd’s library.


Competing Technologies

In order for Scribd to impress their offerings into the mainstream; there are several obstacles they
must first overcome. Various technologies offer an obstacle for Scribd to overcome in an effort to
impress their offerings onto the mainstream. The competitors are not only competing in product
downloads, but also in external document reading devices. The electronic document business is
a matter of providing distribution for material and Scribd’s competitors offer solutions similar to
Scribd and some solutions that Scribd can’t offer currently. This constant battle for technology
advancements makes it hard for the consumer to differentiate their advantage over competitors,
causing the consumer to lack brand loyalty.

Amazon Kindle
The Amazon Kindle is an e-book reader that uses the revolutionary e-ink display to emulate the
book reading experience in a handheld device. The Kindle can read e-books purchased from
Amazon in the proprietary Kindle document format. Amazon currently has over 300,000 books
that are available for immediate download on the Kindle. As well as the Kindle format, the Kindle
supports viewing of the world newspapers in addition to displaying content from over 5,000 blogs.
(Amazon “Kindle”, n.d.)

The Kindle utilizes Sprint’s EVDO cellular network to retrieve any content for the Kindle. This was
established in an effort to create an actual standalone device that wouldn’t need a Wifi connection
or a personal computer. (Frucci, 2007) There is no additional charge for the EVDO connection, it
is complimentary for the life of the device. The Sprint EVDO network has a maximum speed of


                                                 9
3.1mbps download and 1.8mbps, this facilitates downloading of Kindle books in 60 seconds or
less. (Frucci, 2007)




        Figure 3-2 Side-by-side comparison of Scribd’s and Amazon’s user download flow


Docstoc
Docstoc is an electronic document sharing website. They are similar to Scribd in that they allow
anyone to publish electronic documents; they offer support for 10 document formats (Docstoc,
n.d.) compared to Scribd’s 18+ compatible formats. Also, as with Scribd, Docstoc has an inline
flash-based document reader that all of their content can be viewed through. Due to the reader
being flash-based, Docstoc is compatible with any operating system with a GUI that has an
internet-connected web browser.

The e-book Life Cycle
Electronic books have been a developing technology for almost 40 years. It all started with
Project Gutenberg in 1971, which was developed at the University of Illinois. (Guardian.co.uk,
2002) It was essentially a database of public domain works available for public download. In
1999, Simon and Schuster became the first publisher to simultaneously publish books in both
electronic and print formats. (Guardian.co.uk, 2002)




                                               10
                   Figure 3-3 The e-book Life Cycle

As shown in Figure 3-3, the e-book lifestyle is in the growth stage. Despite the fact that eBooks
have been available in some form since 1971, they haven’t been available in a convenient format
until recently. Scribd was started in March 2007 and Amazon released the first generation Kindle
in November 2007. Both of these technologies provide a way for consumers to read and
purchase e-books and represent a strong growth market for e-books.
Technology Partners
Scribd started in 2007 with no major publishing partners. As of 2009 they have deals with many
major publishing houses such as Random House, Simon & Schuster, Workman Publishing Co.,
Berrett-Koehler, Thomas Nelson and Manning Publications. (Guardian.co.uk, 2002) Scribd is
utilizing these relationships to offer rich content to its users and its also used to prevent
competitors from offering similar materials.
According to a June 2009 Business Week article, Scribd is “in talks with other big publishers and
is working to make its content available on the Kindle and Apple's iPhone.” (Ante, 2009) Both of
these ideas would represent major opportunities for Scribd. There are an estimated 20 million
iPhones currently in use and an estimated 1.4 million Kindles will be in use by the end of 2009
(Arrington, 2009), this represents a huge technological opportunity for Scribd. If Scribd could use
both of these devices to distribute their material, they would be looking at 21.4 million mobile
devices that could access their library of electronic documents.




                                                11
      Fig. 3-4 Scribd Comparative Assessment and FAB Analysis


Evaluate Potential Disruptive Technologies
Scribd announced their Scribd store feature on May 18, 2009. (Claburn, 2009) Essentially, Scribd
has created a store where publishers can publish any of their own works, set their own prices,
and ultimately keep the majority of the profit, 80% to be exact. Upon launching this feature, Scribd
established an eBook marketplace unlike anything that had been launched prior. Despite larger
competitors having large budgets, Scribd released a feature that is truly disruptive.

By providing larger shares of profit and letting the publishers set their own prices, Scribd created
an extremely desirable place for publishers to upload and sell their literary wares. Along with
providing a desirable marketplace, Scribd also provides a tremendous analytics system for
publishers to track their sales. For example, when someone adds your document to their list of
"favorites", Scribd warns you via a daily e-mail digest. In addition, Scribd sends an e-mail to the
publisher when any of their documents are sold. (Savikas, 2009) These features compliment the
Scribd store and together prove to be a very disruptive technology. Its not as if features similar to
the store and the analytics mentioned above haven't existed prior, its that Scribd has made all of
them work together to create an extremely cohesive technology set.

Conclusions
Scribd is presenting an extremely interesting platform for eBooks to be read and sold upon. With
60 million unique visitiors per month (Scribd, “About Us”, n.d.) and the introduction of the Scribd
Store in 2009, Scribd is helping to revolutionize the e-book industry. If Scribd can continue their
growth rate and continue to sign new publishers to provide best quality and some exclusive
content, they could potentially be a major player in the electronic publishing field. Scribd offers a
generous portion of the revenue generated (80% to the publisher, 20% to Scribd) and any of their

                                                 12
content can be read on any web browser that is Adobe Flash-enabled. This is an alluring thought
to publishers who are looking to the future and may be deciding between the Amazon, and other
major players, and Scribd.



MARKET ANALYSIS


The purpose of this analysis is to identify the market segments with the greatest potential for
Scribd. Scribd offers both a service (publishing and sharing of publications) and a product
(publications for sale on the Scribd store). For the purposes of our marketing plan we have
chosen market segments that are most likely to purchase the products available through the
Scribd store. Revenues gained through advertising are driven by number of visitors to the site,
and the likelihood the consumers in that segment will be attracted to the products advertised. The
market segments with the most potential for Scribd product revenues are most likely also the
people who would interest many of their advertisers.


Potential Market Segments
The market segments are selected based on certain criteria; primarily strong need or desire for
published books and other resources, tendency to purchase online, use of the Internet for
networking, researching and purchasing, and primarily early adopter and early majority
characteristics.
The Scribd product, the digital publication, will appeal to some early adopters, but the larger
share of buyers will be early majority. Early adopters are attracted by high-risk, high-reward
projects, and because they envision great gains from adopting innovation, they are not very price
sensitive. The early majority is not looking for revolutionary changes, but is motivated by
evolutionary changes that bring about productivity enhancements (Slater, 2007). Change is good,
as long as it is proven.

The market segments we chose for analysis are student readers (the Internet-savvy college
student), leisure readers (the online consumer), and business readers (the career-oriented
professional).

Student Reader Segment — The Internet-savvy college student

This segment is defined as all students attending U.S. colleges and universities. There are
approximately 18,248,128 potential customers based on this criteria. Most of these students are
between the ages of 18 and 30, and are spending an average of $667 per year on textbooks. A
very high percentage of those attending colleges and universities are early adopters and early
majority consumers. The highest percentage is 25% of males in post-secondary schools consider
themselves early adopters. Based on that figure we can assume as high as 80% of upper-
education students are either early adopters or early majority consumers. This group consists of
heavy Internet users, who also participate in social networking, online entertainment and online
purchasing. About 70% of this group owns a laptop. All students are required to have access to
textbooks, and most will purchase them. This group is also more price sensitive than our other
segments, and would prefer a used textbook, if it is less expensive, than an e-book. (Allen, 2008)




                                               13
Meet Claire.
Claire is single and 21, and working on her undergraduate degree in education. Claire’s parents
are paying her tuition and board, but Claire is working part-time to cover the rest of her expenses.
And since she’s a senior and soon to graduate, Claire is also interested in putting a little money
aside to pay for her expenses after graduation. She is considering getting her graduate degree
right away, but has her feelers out to see if there are job opportunities after getting her undergrad
degree.

Claire is very bright, and for the most part, enjoys school. She likes to try new things, and
considers herself pretty progressive. She would probably consider herself an early adopter, but,
truth be told, may fit more into the early majority consumer group.

Like most of her friends, Claire is a very savvy Internet user. She has a Facebook account, gets
most of her music from iTunes, and enjoys seeing the YouTube videos her friends are constantly
posting. She also spends a great deal of time on her phone, texting friends throughout the day.

When the each term starts, Claire always has sticker shock when she realizes how much
textbooks cost. Over the last 3 years she’s spent around $2000 on books and supplies, but has
managed to save some money buying used books and sometimes selling them back to the
student bookstore. She feels she would be open to buying e-books online if the price was
comparable to used book costs, especially when she’s in graduate school, as she’ll have to work
more, have less time and can see that buying books online and getting them downloaded
immediately could be a time saver.

Segment Attractiveness
Market Growth
The forecasted growth for people entering colleges over the next four years is an average 4.6%
(Cite)

Competitive Intensity
There are several small competitors that provide similar services to Scrib’s. Only one, DocStoc,
closely matches Scribd’s service offerings, but is much smaller. For their ecommerce products,
the main competitor is Amazon, with Google looming since their announcement they will be
launching their own e-book online store.

Market Access
This consumer group is easy to access. They spend a great deal of time on the Internet and can
be targeted through social media, tribe-oriented communications, online advertising, and
SEO/SEM tactics. Further, we can access them through on-campus communication tactics as
well.

                                                 14
15
Leisure Reader Segment — The online consumer who enjoys reading.

This segment is defined as all U.S. consumers who have Internet connections. The Internet
connection criteria allows us to focus on consumers who are more comfortable with Internet
transactions, are exposed to Internet searching and possibly social networking. By narrowing the
segment in this way, we find there are more early adopters and, especially, more early majority
consumers than in the entire segment. This criteria also, then, allows us to factor in
demographics and psychographics of the Internet purchaser. As found in Mintels Online Books
“Online Distribution” 10, 639,652 consumers purchase online books. (Mintel , 2004)




Meet Jason.
Jason is 42 and an all-American type guy. He’s not a super social person, nor is he completely
confidant. He really likes his time at home with the wife and kids.

Jason is a golfer, and plays on the company softball team. But he also enjoys surfing the Internet.
He’s gotten involved in Facebook at his wife’s urging, and is getting a kick out of getting
reacquainted with old high school and college buddies. He catches up on events, and has fun by
checking out YouTube on a regular basis. He’s into his music, and buys most of it through
iTunes.

He also likes to read. He likes nonfiction and fiction, has just read the entire set of John
Grisham’s courtroom dramas, and also considers himself a bit of a history nut. Occasionally he
buys books about the sports he watches and plays, and his wife passes him the occasional self-
help book. He still enjoys reading the local paper, but gets most of his news off the Internet.
Jason probably reads about 6 books a year, and buys about 10 books a year to give to family and
friends. Jason has two children who also enjoy reading.The gift books are ordered online, but are
not yet e-books.

Segment Attractiveness

Market Growth
This market grows 13% a year.

Competitive Intensity
Competitive intensity is high for this category. Amazon is firmly established, a well-known and
well-respected brand, with universal reach and millions of customers.


                                                16
Market Access
This consumer group is most easily accessed through the web. The web campaign would have to
have greater reach than for the other groups, as this group is less defined. A traditional campaign
would be too far reaching and cost prohibitive.

Business Reader Segment — The career-oriented professional

This segment is defined as those who hold managerial and professional positions, specifically
within business services, public and private education, health services, engineering, engineering
management, social and legal services. According the Bureau of Labor and Statistics, 2010
projections of the number of jobs meeting that criteria is 82,507,000 (Hecker, 2001). Projected job
openings in 2010 requiring an associate’s degree, or bachelor’s degree and higher are estimated
to be 54,156,000. We are using 50,000,000 as the number of potential business reader
customers for segment analysis. The Business Reader segment consists of males and females
equally, ages 22 to 62. The majority of this segment lives in or near the cities they work in. The
majority have post-secondary educations, and most of them have undergraduate degrees,
graduate degrees or professional certifications. Those in the early stages of their careers are
single or married with no children, however, most successful executives who are mid- or late-
career are married with children.




Meet Angie.
Angie is doing well in her career. She’s 32, is recently married, but has no children. Angie has
always been an over-achiever. Her job as a Marketing Manager at a medium-sized and
successful manufacturer is a not the end all, but a step in the right direction. Her goals are to
learn all she can in her current position, moving up to a possible Director of Marketing position
there, and then make the move to a larger player in a related industry. Angie finds she needs to
stay current and continuously learn about her industry and her audiences. She frequently reads
books and other materials that will help her be successful as an employee, manager, and to
become more of an expert in marketing and her industry. Since she has little time, she prefers
online search and download as a means to get the information she needs quickly and with little
hassle.

Angie also has a nice home for entertaining, and likes it to be well furnished. Shopping online
works well for her for most things, even brands she has seen in the stores. She likes to shop for
price and service, and really likes the convenience of buying from her laptop.
                                                17
She and her husband travel when they can, and research their trips thoroughly before they go.
They also love their road bikes, and do a bit of touring as well. They are planning on having
children in the next few years try to dining out and going out with friends at the end of a long
week. Their social networks help them connect with people, let them know what’s going on in
their busy world and plan events with friends. They also take advantage of sites that recommend
entertainment options, home furnishings, music and other interests. Angie is very comfortable
surfing the Internet, social networking and taking recommendations from like-minded strangers.



Segment Attractiveness

Market Growth
This is a fast-growing segment. Growth projections for available jobs in this field average around
12% per year. (Hecker, 2001).

Competitive Intensity
There are several small competitors on the that provide similar services to Scrib’s. Only one,
DocStoc, closely matches Scribd’s service offerings, but is much smaller. For their ecommerce
products, the main competitor is Amazon, with Google looming since their announcement they
will be launching their own ebook online store.

Market Access
This segment is easily accessed. They spend a great deal of time searching and reading online,
and would be prime targets for online advertising, SEO/SEM research tactics, and other
campaigns. Further, they have many vertical market and industry related resources, so we could
target them both traditionally, print advertising and direct mail, and at industry specific tradeshows
and online associations.

The following table (Table 4-1) summarizes the core need, demographics, psychographics, value
drivers, and price sensitivity for each of the three segments analyzed.




                                                 18
                 Core need            Demographics                 Psychographics                    Value Drivers            Price
                                                                                                                              Sensitivity


The Internet-    Best availability    Age 18 – 30, the             Pretty savvy and into social      Delivered initial cost   Very price
savvy college    of textbooks and     average age of an            networking, busy, academic,       Price sensitivity        sensitive, would
student          other required       undergraduate is 26,         99%+ online every week,                                    prefer to
                 published            56% female, 58% of           70% own laptops, over half        Website efficiency       purchase less
The student
reader           materials at         bachelor’s degrees are       watch TV online, half work        Best publications &      expensive
                 reasonable price     earned by women,             out regularly, 15% early          publisher partners       textbooks and
                                      majority working toward      adopters, 80% buy brand                                    will purchase
                                      4-yr. degree                 items on sale, 90% pay            Quality material at      used textbooks
                                                                   attention to non-traditional,     low price                over new or e-
                                                                   word of mouth advertising,                                 books because
                                                                   heavily influenced by peers                                of price
                                                                   and like-minded strangers on
                                                                   social networks
The online      A pleasurable         Includes online              Likes to read, enjoys leisure     Delivered initial cost   Price sensitive if
leisure reader  reading               socializers, digital media   time, concerned with self         Multiple platform        prices are
The online      experience that’s     prosumers, Internet          betterment, 65% spend time        capabilities             significantly
consumer reader readily available     entertainment                on YouTube, iTunes, over                                   higher. Great
                                      enthusiasts and other        60% spend time on social          Best reading             shopping
                                      early adopter and early      networking sites, they            experience               experience
                                      majority consumers.          choose websites based over        Best publications/       online would
                                      Age varies, average age      50% on good design and            publisher partners       influence price
                                      from 25 to 45, higher        entertainment value, of all                                concerns, but
                                      percentage married than      different types of media they     Easy search and          only to a degree.
                                      single, with and without     prefer the Internet by 80%,       purchase
                                      children, high               importance of watching TV
                                      percentage are college       rates around 42%
                                      educated, varying
                                      lifestyles, income
                                      averages $60k to $84k,
                                      live in suburban single
                                      family homes
The career-      An efficient and     Age 22 – 62, male and        Career-oriented, college          Switching costs          Not as price
oriented         reliable resource,   female, single or            educated, intelligent,                                     sensitive, more
                                                                   ambitious, like and need to       Best availability of
professional     quick searching,     married, no children,        stay informed, current and up     publications             concerned with
The business     immediate            college educated,            to date, continuous learners,                              quality,
                 availability of      middle class and higher.     online savvy, online              Credibility/stability    availability and
reader                                                             purchasers, busy and in need
                 published work                                                                      Easy search              efficiency,
                                                                   of fast, efficient industry and                            understand the
                                                                   career resources, higher
                                                                   paid, willing to spend to get                              value of their
                                                                   what they need, social                                     information
                                                                   network joiners                                            resources




Table 4-1 Segments and Criteria Used to Analyze Each Segment




                                                                   19
              Figure 4-2 Segment Attractiveness Chart for Key Features, Advantages and Benefits


 Segment Attractiveness
     Factor (SAF)                        Segment A                                  Segment B                                  Segment C
                            Post-secondary student readers                       Leisure Readers                           Business Readers
Key Product Features
F1                        Easy-to-use website                       Website layout/functionality              iPaper multi-platform uploads/downloads
F2                        iPaper multi-platform uploads/downloads   Reading experience                        Embedding capability
F3                        Online social network                     iPaper multi-platform uploads/downloads   File storage and indexing


Key Product Advantages
A1                        Paper reading platform                    Paper reading platform                    Paper reading platform
A2                        iPaper multi-platform uploads/downloads   iPaper multi-platform uploads/downloads   Paper reading platform
A3                        Online social network                     Online social network                     File storage and indexing


Key Product Benefits
B1                        Quick and free global access              More pleasurable viewing/reading          Document integrity
B2                        More pleasurable viewing/reading          Multi-platform portable access            Privacy
B3                        Document integrity                        Social community                          Multi-platform portable access




                                                                         20
      Figure 4-3 Segment Attractiveness Chart for Key Customer Value Drivers




Key CVDs                            Segment A                                  Segment B                                Segment C
                              Post-secondary student
                                      readers                                Leisure Readers                          Business Readers
Economic                Price sensitivity                       Price sensitivity                       Switching costs
                        Website efficiency                      Multiple platform capabilities          Best availability of publications
Performance             Best reading experience (feature set)   Best reading experience (feature set)   Best reading experience (feature set)
                        Best vision for writers and readers     Best vision for writers and readers     Best vision for writers and readers
Supplier                Best publications/publisher partners    Best publications/publisher partners    Credibility and stability.
                        Easy to purchase                        Customer database preferences           Flexibility
Buyer Motivations &
Goals                   Quality material at low price           Best price                              Availability
                        Easy to search                          Easy to search                          Easy to search

Situational             Easy to search                          Easy to search                          Easy to search

                        Flexibility                             Easy to purchase                        Easy to purchase


      Figure 4-2 shows the potential revenue for each of Scribd’s targeted segments. This was derived
      from TAM/SAM analysis for each segment.

      Table 4-4 Segments and Criteria Used to Analyze Each Segment
      Alloy/Harris College Explorer Survey
      Mintel Online Books Online Distribition
      Intel Segmenting US Consumers by Electronic Media Consumption
      COURSE CORRECTIONS How Digital Textbooks Are Off Track, And How to Set Them Straight



                                                                  21
                   3-Year Sales Potential!




$450,000,000.00!
$337,500,000.00!
$225,000,000.00!
$112,500,000.00!
          $0.00!




                      Years!


                               SRS! COP! LRS!


            SRS 3-Year Sales Potential

                                        $450,000,000
                                                       Revenue

                                        $337,500,000
                                        $225,000,000
                                        $112,500,000
                                        $0
           1           2          3

                     Years




                             22
            LRS 3-Years Sales Potential


$337,500,000
Revenue
$225,000,000
$112,500,000
                $0


                                   Years




            COP 3-Year Sales Potential

          $337,500,000
  Revenue




          $225,000,000
          $112,500,000
                     $0
                               1      2     3

                                    Years




                          23
                              Segment Attractiveness!

       10.0000!
         8.0000!
         6.0000!
         4.0000!
         2.0000!
         0.0000!

                                      ISCS!    COP!    OCR!    Other!


Target Market

The above data has been a compilation of data from Mintel, the Diffusion Company, Alloy Media
+ Marketing, Bureau of Labor and Statistics and Simplemap. The compilation of data from these
reports gives Scribd their three segments target market numbers. The three segments above do
not account for all of the total online publishing/reading service market; however it does represent
the majority of early majority, innovators users of Scribds market.

The internet savvy college student: To find the target market for this segment we used a report
from Alloy Media + Marketing that gave us the total number of college students with in the United
States. The segmentation dividers that were used to find the target market were: college students
that used the internet, early adopter, early majority, buy book online, and eBook purchasers.

The career-oriented professional: To find the target market for this segment we used a report
from the Bureau of Labor and Statistics to get the total number of professional business people in
the United States. The segment dividers used were internet usage, early adopters, online
purchasers, and eFile purchasers.

The online consumer/leisure reader: To find the target market for this segment we used a report
from Simplemap. This report gave the total number of people using the internet in the United
States. The segment dividers used were book buyers, early majority, online book buyers, eFile
purchasers.


Maximum Opportunity

Upon reviewing our research and data using the market sizing and forecasting model provided in class,
(Harmon, 2009) we have come to the conclusion that the Internet Savvy College Student segment
represents the highest market potential for Scribd with $1.3 Billion. The next highest segment includes the
Career Oriented Professional that represents a market potential of $166MM. The Leisure Reader Segment
falls into last place among the three targeted segment markets with a $57MM market potential. To reach
these market values, our team pulled data from a variety of key sources including industry reports from
Mintel to economic data provided by government agencies. The table below represents our findings for
each segment within the U.S. market. Our total market potential represents a 25.24 percent share of the
total tax payer population in the U.S. with a $1.5 Billion market potential.




                                                    24
                                        ISCS                 COP                 OCR           Other Market Potential


Total Buyers                  14,233,540        18,151,540          5,000,636           2,000,000      39,385,716

Average Purchase Price      $92.89             $28.5               $11.41              $1.25


Segment Potential           $1,322,153,531 $166,268,106            $57,057,257         $2,500,000   $1,547,978,894



Table 4-2 Segment Potential

We used our research to find the total buyers that represent each segments total buyer numbers. We then
were able to make a reasonable estimate for each segments average purchase price by using other
resources such as Amazon.com. We took an average of 30 random educational books offered on Amazon
to get the purchase price for the Internet-savvy college student. We then took this average and multiplied it
by 8.5 to get the yearly purchase price for this segment at $667. We used 8.5 because students need to be
registered in three classes within a term based school to be a full time student. For three classes a term and
three terms in a year that would make for students having to purchase a total of nine books a year. As for
students enrolled in a semester based school, they need to be registered in four classes to be a full time
student. With two semesters students would be asked to purchase eight books per year. Using an average
of the two we arrived at 8.5.

For the career-oriented professional average purchase price we took the average of all the business
offerings from the Scribd website to come up with $28.5. We made a reasonable estimate that this segment
would buy 4.5 books a year to give them yearly expenditure of $128. For the last targeted segment the
online consumer reader we took the average of the current offerings from the Scribd website to get the
average purchase price. As for their yearly purchase frequency we made a reasonable estimate of six times
a year. This creates an average yearly purchase expenditure of $68 for this market segment. We estimated
the remaining segment to have a low average purchase price due to the fact that we believe they would be
using the site more for the free offerings and purchasing inexpensive offerings very infrequently.


Potential new markets.

As Scribd has started a new market for online document sharing that has quickly become a high
volume market they were able to attract a large number of the available market share do to their
introduction of a distributive technology with their iPaper platform. They have an opportunity to
innovate further and to branch into new markets or partner with other file sharing industry leaders
to become the one stop shop for sharing files across the internet. With global reach Scribd also
has the opportunity to compete with the likes of Amazon in developing countries and markets
where Amazon does not already have a strangle hold on the market.


Conclusions

After analyzing all of our findings we have come to the conclusion that Scribd has a very viable
market to target in online document sharing. Within this market we believe Scribd’s focus should
be on targeting the Internet-savvy college student segment which represents around 85% of the
total market potential. This $1.3 Billion market potential is key for Scribd to be able to compete in
a hyper-competitive new market with players like Amazon and Docstoc. Scribd needs to stay
focused on continuing to increase the value they offer to their customers through innovation and
partnerships within their value chain. With a focus on innovation Scribd can also increase the
market barriers for new entrants and provide them with a competitive advantage over their
competition.

Scribd needs to focus on what their target consumers feel are the key product features,
advantages, and benefits that add value to the customer. These include an easy to use website

                                                       25
that has the latest and best available uploading and downloading capabilities. The company also
has to be able to provide a document reading platform to compete with the Kindle and other
products currently available to this market segment. This would also tie into their adding value
through a more pleasurable viewing and reading experience along with more global access.
Another strategy Scribd needs to follow is to match up their offerings with the voice of the
Internet-savvy college consumer. This segment is very price sensitive, that appreciates the
companies vision for writers and readers, enjoys using a website that is efficient, and offers a
great reading experience. This segment is motivated by quality material that is available at a low
price, that involves hassle free and flexible ways of exploring this quality material.


COMPETITOR ANALYSIS


Industry Dynamics
The competitor analysis for Scribd will focus on two main competitors: Amazon Kindle and
Docstoc. Scribd and its competitors will be analyzed through Porter’s Model, competitive factors,
industry competition, and industry benchmarks. This analysis will give a snap shot of where
Scribd currently stands against competitors. It will show what areas Scribd needs to improve in as
well as what areas they are strong in.

Porter’s Model

The Porter’s Five Forces model is included in this marketing strategy for the purpose of
determining any potential threats Scribd faces within the market it currently serves. The model will
analyze Scribd’s current position in the market, as well as its current and potential competitors.
Since the introduction of Scribd, numerous businesses have adopted the idea of having digital
books available online. Increased competition, the introduction of pricing for digital books, as well
as innovative platforms to upload and download books have all provided a basis for this model.




Figure 5-1 Scribd First Year Porter’s Five Forces Model




                                                 26
Existing Industry Competition
Since the introduction of digital books, there has been an increase in the number of businesses
that are tapping into this market — providing services for authors and products for readers.
Currently, there are two main competitors Scribd faces in this industry: Amazon (Kindle) and
Docstoc. A high level of competition exists among these three businesses because they are all
attempting to gain a large market share of e-book readers.

Amazon (Kindle) has proved to be one of Scribd’s most threatening competitors. Although the
Kindle is an entirely different platform reader experience reading printed books, it perceived as a
threat to Scribd’s potential customer market. According to Amazon.com, Amazon can currently
provide over 300,000 books for their Kindle platform, and has an average of 65 million unique
visitors to the website each month. To compete, Scribd needs to introduce more products or
services that to counter Amazon’s advantage. And advantage, and disadvantage for Scribd is
their pricing structure. Currently, Scribd allows authors and publishers to set their own prices and
to receive 80% of all profits made from their book sales (Scribd). The authors can choose to set
their prices lower, given the higher percentage of the asking price, but publishers may not choose
to be as competitive. Amazon is discounting many of their books, such as those on the New York
bestseller list to under $10.00 (Amazon). The set the price paid to authors for books with only a
35% return on revenue to authors (Switch11, 2009).

The second major competitor for Scribd is Docstoc. Docstoc has a business model that closely
resembles very Scribd’s. Docstoc currently does not charge visitors to download books posted on
their website; however, they soon will. Docstoc is also creating a store much like Scribd’s, where
they will also charge readers to download books. However, Docstoc has a narrow focus with
types of books offered, which include only business and education publications. This makes
Docstoc less of a threat to Scribd. It is important to note that although Docstoc does not offer all
of the same products as Scribd, they can, and may, change their strategy and expand their
categories of books and publications, thus going after a larger share of the market.

To stay competitive within the market, companies have had to become more innovative and
provide greater depth and value of products and services. Competitors will constantly be
searching for ways to update their technical platforms to make the experience of buying and
reading e-books and e-publications a more desirable choice. All key competitors may be forced to
maintain low prices and expand their technological capabilities. For example, with the Kindle,
Amazon provides a digital platform that is not only portable, but also is audible.


Threat of Potential Entrants
E-books have recently become an alternative for readers who normally buy paperback books.
With the emergence of this new product offering, Scribd faces a large threat of potential entrants.
Scribd came out with digital books for free in 2007, and only opened their ecommerce store in
May of this year. (Snyder, 2009). In that period of time, several smaller companies have come out
with similar service offerings. It is the larger, previously established companies, with brand names
that are well known that provide the greatest threat with regard to sales of digital publications.

Sales of books and e-books online don’t have the same kind of overhead as brick-and-mortar
stores. Because of the significantly smaller start-up costs, it is easier for businesses built around
their websites to open a business, and greater potential for multiple competitors to spring up.
Also, because of the Scribd business model, which favors both authors and readers, is already
established, new potential competitors can see that starting a business in e-book publishing and
retailing is financially feasible.

Another potential threat for entrants is online book retailers of printed books. Scribd’s offering can
be identical, as publications uploaded with iPaper look just like the original book or publication,
but in digital format. The result is a reduction of market share for these online bookstores. If
market share decreases, they may be inclined to offer the same services as Scribd to maintain

                                                 27
their market share. Large online bookstores such as Barnes & Noble, Powell’s Books, and
Borders have the infrastructure to sell digital books are also a significant threat to Scribd.

Threat of Substitute Products
In addition to competition from other book retailers, Scribd faces the a real threat with substitutes.
A current threat as a substitute product is the Amazon Kindle. Currently, Scribd only offers their
books in digital format that can only be read on a computer screen or on paper if the e-book is
printed out by the reader. Amazon has introduced a platform with the Kindle, where the book, or
library, is portable, and can provide a more interactive experience with the reader. Amazon Kindle
also allows the user to download the book and take advantage of an audio feature, and listen to
the book as it is “read” to them.

Sribd could stay competitive by either creating an innovative product similar to Kindle, that
encourages the reader to continue using Scribd’s products, which seems to be contrary to their
vision, and/or they need to enhance the services they currently offer on their website, making it
more appealing reading on a screen, such as a laptop or other computer, rather to a handheld
device.

Other substitute products Scribd currently faces are books on DVDs and MP3 players.
Downloading a book in audible format has become incredibly popular. Many customers are
reverting to this substitute product because of their desire or need to multi-task. For example,
they can listen to a book and work out or drive a car. Substitutes are a threat to Scribd, and one
they need to stay aware of and evolve and innovate for.

Bargaining Power of Customers
The bargaining power for customers is very high, primarily because they have opportunities to
buy the same product from multiple stores. Scribd encourages authors to set low prices by
offering a large return on profits. If Scribd cannot beat competitors’ prices, the reader can easily
go to another source to buy the same book. However, it is important to know that Scribd has
created this bargaining power for customers. They have encouraged authors to set low prices
based on the price elasticity of the market. Therefore, with the encouragement of Scribd to
maintain low prices, customers simply support this business model because it ultimately benefits
them in the end. Again, however, larger commercial publishers may not be as willing to discount
prices, even with the generous revenue split.

Bargaining Power of Suppliers
There are two main suppliers that Scribd has leveraged to grow their business. The first supplier
is individual authors that have supplied their work without the help of a publishing firm. The
bargaining power for suppliers is very high because these suppliers are the only source that
supplies the product to the reader. Scribd has allowed the bargaining power of suppliers to be
their top priority. The authors have a lot of bargaining power because they have the ability to set
their own prices for their books and also have been given an 80 percent profit on all of their
books. They also have the choice of whether or not they would like to offer the book for free.
Scribd has given these authors a huge amount of bargaining power because they are their
biggest vendor. The site has proven to produce a large amount of hits without the charge for
books; however, Scribd has been able to see how much traffic has been drawn to this website
once they have allowed authors to charge for their books because customers are in high demand
to read mainstream pieces.

The second main supplier is publishers. Scribd has just begun to do business with major
publishing companies and has given them a large amount of bargaining power as well. They have
allowed the publishers to choose the price for their books with the same terms for individual
authors. The reason why Scribd has given major publishing firms the same amount of bargaining
power as individual authors is because these books that will be uploaded on the site will attract
an enormous amount of customers. Mainstream books will allow the website to become

                                                 28
mainstream. It will increase the market share for Scribd and will also expand the target market
segment. It is important for Scribd to give a lot of bargaining power to their two main suppliers
because they are the ones that drive traffic to the website and maintain readership.

Porter’s Five Future Forces
For the second year, the e-book industry is expected to gain more entrants that will further
competition with Scribd. ITunes and Google will have successfully implemented an online books
stores for readers. Large retailers selling printed books is going to be a huge threat for Scribd as
they figure out a way to upload their books online and make it easy for readers to download. The
market segments will remain the same for Scribd, but there is a risk they will lose market share
with these segments as competitors increase.




Figure 5-2 Scribd Second Year Porter’s Five Forces Model

For the third year, there is a possibility Docstoc will no longer be in business as they learn their
market is too segmented and business and educational readers can the same reading materials
through Scribd. At this point in time, large book retailers who sell printed books will have
successfully joined the e-book industry as they master the technology used to upload and
download books. The bargaining power will raise even more as consumers are exposed to more
choices when searching for a book online.




                                                 29
Figure 5-3 Scribd Third Year Porter’s Five Forces Model




Sources of Competitive Advantages

Price
Scribd has been able to maintain a competitive advantage due to the low price points the books
are sold at. Because authors receive a much larger percentage of profits than they normally
would if they sold the book through other retail outlets, they are willing to sell their book for a very
cheap price because they still make a large profit off sales. Amazon chooses the price the book is
sold for on Kindle, and provides little room for the customer to choose the price. Scribd has
placed itself in the perfect position because they are able to create the greatest customer value
by charging a low price but not low enough to make the customer believe the writing is not worth
reading.

iPaper
Scribd has perfected its digital platform that allows easy access to upload and download digital
documents. Unlike Kindle, where the customer first has to buy the product and wait for it to come
in the mail before they can begin reading books, iPaper allows the customer to instantly download
books. iPaper does not require users to download additional software programs in order to
digitally read books. Instead the program is a click away from receiving a book online. This
program has also allowed the process of uploading written works from authors to be very easy
and less time consuming than others. iPaper is the leading platform in the e-book industry that
creates the most user-friendly experience for both the author and the reader.

Open to the Public
Scribd has maintained a strong competitive advantage because they give everyone the
opportunity to publish their work on this website. Customers are attracted to this website because
they are not only exposed to mainstream writings, but also are exposed to writings that are not
mainstream but has the potential to be. The beauty of this website is that anyone can be

                                                  30
published not just those that go through the formal process of a publishing firm. Because Scribd
allows everyone to write, they also have a large amount of product offerings. For example, blogs,
books, lyrics, and poems can all be posted on this website for the public to see. Scribd has
gained a competitive advantage because they have opened the website to the public and have
shown their main goal is not to make profits, but to spread the excitement for reading.


Competitive Barriers

Technology
Currently Scribd has maintained competition with Amazon Kindle through the use of their new
platform iPaper. However, iPaper is not enough to keep Scribd competitive if Amazon is coming
out with a portable digital reading platform. Scribd will eventually encounter a barrier that is
caused by technology. They need to find a way that can make the reading experience more
interactive for the reader besides clicking through digital pages. Amazon Kindle has invented a
device that reads like a book and can download a book within 60 seconds. Technology will
eventually become a huge competitive barrier for Scribd as more companies adopt the same
business model and program for readers to read books digitally. Scribd is currently ahead of the
technological curve compared to Docstoc because they have created a program that is hassle
free for uploading and downloading books. However, once companies, such as Docstoc, create
programs similar to iPaper, what is the next technological move going to be for Scribd to stay
competitive?

Plagiarism
Plagiarism has come to be a competitive barrier for Scribd as users have figured out they can
upload other peoples’ works and receive profit off of those sales. Authors are becoming more
hesitant to use this program because they face the possibility of people plagiarizing their work.
For example, if a book is put in digital form for the first time, it is much easier for people to copy
and paste their work onto another website and start earning profits. Kindle has been able to
overcome this problem because the book can only be uploaded on the device which does not
have a copy and paste function. Also, they review all books uploaded so they are able to see
where the content is coming from. Currently Scribd is trying to break this competitive barrier by
encouraging readers and authors to report writings that could be plagiarized, however with over
35 million words uploaded (Scribd), Scribd is chasing a problem that is moving at a much faster
rate than they are.

Commitment to Market
The last competitive barrier Scribd faces is their commitment to the market. Scribd is brand new
to the market, and many concerns have been voiced in terms of credibility and reliability. Every
new company faces the problem of needing to build trust with the customers before they can
become successful. Right now, authors are unsure of how long Scribd is going to stay in
business, so they are hesitant to post their documents if this website is not reliable. Also, authors
are also hesitant to post their work because they do not know how credible the site is. They are
instead choosing retailers that have been around longer and can offer the safety protection for
plagiarism.

Consolidation
The potential for a Scribd merger or acquisition is moderately high. Scribd currently is seeking a
partnership with Amazon to use the Kindle as an additional platform for downloading. Acquisition
by Google might also be a possibility in the future.

Partnerships/Alliances
Scribd’s primary partnerships will be major publishers. Scribd has recently partnered with
Random House, Simon & Schuster and other major publishers (Snyder, 2009). Scribd has
                                                  31
negotiated with publishers to have selected books for free, and charge the publisher’s price for
the all other books. The free offering will drive traffic to the website, and pull the readers by, in
essence, seeding the product. The publishers will bring in a greater market share for Scribd as
they expand their current market to include mainstream readers and others. According to Chris
Snyder, “Publishers hope to boost both print and e-book sales through e-book sharing and word
of mouth” (2009).

Other major partners listed on Scribd’s website consist of the following companies:
   • Environmental Health Perspectives
   • Workman
   • World Economic Forum
   • Berrett-Koehler Publishers
   • The New York Times
   • TechCrunch
   • Baltimore Police
   • Carnegie Endowment for International Peace
   • Cato Institute (Scribd)

Value Chain
There are three steps in the value chain that Scribd completes in order to gain a competitive
advantage over others companies. With their popular website and ser-friendly platform (iPaper),
in place, Scribd first begins collecting written material from the public. They encourage anyone
who has passion for writing to upload their work. The written documents, in this case, are the
inventory or input of materials.

The second step Scribd completes to add value to the product is publishing it into a readable
format for consumers. This step can also be considered as outbound logistics as it takes the
finished product and gets that product to the customer. Marketing on the website includes
featuring books people are currently reading, featuring books for exploration, and featuring
exclusive first looks. Authors do not need to manage this section of value chain activities.

The third step in the value chain is provision of reader and author services, in example, the
system they have developed to curb plagiarism. Toward that goals, if someone other than the
author is selling a book, Scribd immediately removes it from the site. Site maintenance and
improvements and customer support are key services that add value for customers as well.

The last step Scribd completes in the value chain is marketing and sales of the product, such as
featuring publications. The site also has free book search function for readers. Scribd also has an
impressive PR history, and the numerous articles published about the company drive traffic to the
website.




                                                  32
Business Ecosystem
This table illustrates all of the customers, suppliers, competitors, and partnerships that work
together to create an ecosystem for e-books. This table summarizes the core factors that allow
the e-book industry to be successful.




Figure 5-4 The Scribd Business Ecosystem

Three main areas make up the business ecosystem that supports industry for e-books: Core
Enterprise, Extended Enterprise, and the Outer Business Ecosystem. The first, Core Enterprise,
is comprised of the direct suppliers, and channels that allow this industry to flourish. Publishers,
authors, and media companies make up the suppliers because they provide written material that
can be sold and distributed over the Internet. The distribution channel that is used allows
information to be passed is the Internet itself. The Internet encompasses the websites that
booksellers use to upload and download books for readers.

The second section of the business ecosystem is the Extended Enterprise. This section consists
of direct customers, which include Scribd’s three main market segments: leisure readers,
business readers, and student readers. They use the services offered and build traffic for the
website.

The last section that makes up the business ecosystem is the Outer Business Ecosystem. This
section includes investors, partners and stakeholders that are involved in the e-book industry.
Scribd’s partners and investors are listed in this outer portion. Also within this section are Scribd’s
current competitors. These are classified as stakeholders.

All three areas work together to make up the business ecosystem for e-books. Each factor listed
within the model has a stake in the e-book industry. If one factor changes, other factors will
change within the ecosystem as they all work off of each other to create a successful industry.



                                                  33
Competitive Factors Mapping

Key Competitive Factors — Author Perspective

Profit Structure
Authors are choosing online publishers based on pricing strategy i.e. how much profit they can
make on a sale. The benefits of having a selling a book on a website need to outweigh the costs,
which is why online booksellers are competing on price strategy with regard to writer/publisher
advantage. Whoever can provide the most profit to the author is more likely to maintain that
partnership. Amazon currently gives authors 35 percent of profits while Scribd gives the authors
80 percent (Switch11, 2009). Docstoc offers a small revenue stream for their writers and
publishers through paper monetization. The profit structure is an important factor for pulling in
authors, which ultimately pulls in readers.

Pricing
Authors want the ability to sell their book for a reasonable price and to have some say the selling
price for their publications. Competitors are attempting to undercut prices so they can gain a
competitive advantage; however, it is important to understand the value the author sees in their
work as well as the value customers see in the books. One of the great advantages Scribd has
over Amazon and Docstoc is their flexible pricing strategy, which allows writers and publishers to
set their own publication price. This creates bargaining power for the authors. The more
bargaining power they have, the more likely they are to form lasting relationships with the online
publisher.

Hits per Site
When determining which company to online publisher or retailer to partner with, traffic to the site
is should be a key consideration. Because the author’s goal is to increase e-book sales, therefore
the most attractive partner is the one with the site that gives them the greatest opportunity to
reach these potential customers.

Ease of Uploading via Digital Platform
The website needs to be user-friendly for the author. Ease of use is a key advantage. A website
that is simple, easy, and fast will ensure the best results for authors that upload their work.
Companies should be competing to find the easiest way for authors to upload their works
because they know this industry can be easily substituted by the traditional methods of printing.

Safety of Use
If a website is notorious for people gathering and plagiarizing written pieces, an author is less
likely to use that service. Also, if the website lacks safety in regards for plagiarism, the website’s
reputation may be tarnished which could lead the author to publish elsewhere. Platforms that
make it easy for readers to upload and authors to download, also make it easy for plagiarism to
occur. A website with the best security measures that monitor and react quickly to gain a huge
competitive advantage. Authors require a safe place to share their work.

Dedication to the Written Word
All of the authors are dedicated to the written word. Scribd’s vision is built on this value. The more
dedicated publisher is to writing and the creative process, the more likely they will provide a
positive experience and environment for the author. If a site is only concerned with maximum
revenue and easy sales of mainstream books and publications, and doesn’t value it’s contributors
and their contributions, they run the risk of alienating authors, who may go elsewhere.




                                                  34
Contrast Matrix
The Contrast Matrix is used to summarize the core demographics, psychographics, value drivers,
brand loyalty, product usage, price sensitivity, and market size of each market segment Scribd
currently serves.


                                                                                                             The Career-oriented
                        Internet-savvy College Student              The Online Consumer                          Professional
                               The Student Reader                     The Leisure Reader                      The Leisure Reader
  Demographics         Age 18 to 30, 56% females,            Age varies, from 25 to 45, more are      Age 22 to 62, male and female,
                       majority working toward               married than single, with and            single or married, no children,
                       bachelor’s degree, 58% are
                       single, 27% are in committed          without children, high percentage        college educated, middle class
                       partnerships, 63% have paying         are college educated, income ave.        and above.
                       jobs, 24% work more than one          $60k to $84k, live in suburbs,
                       job, 47% of jobholders work to        single family homes
                       pay some or all college &
                       personal expenses.

  Psychographics       Into social networking, 99%           Likes to read, enjoys leisure time,       Career-oriented, college
                       online each week, 70% own             concerned with self betterment,           educated, intelligent, ambitious,
                       laptops, 80% early adopter +                                                    like and need to stay informed,
                       early majority, 90% pay attention     65% spend time on YouTube,                current and up to date,
                       to non-traditional word-of-mouth      iTunes, over 60% spend time on            continuous learners, online
                       advertising, heavily influenced by    social networking sites, they             savvy, online purchasers, busy
                       peers and like-minded strangers       choose websites based over 50%            and in need of fast, efficient
                                                             on good design and entertainment          industry and career resources,
                                                                                                       higher paid, willing to spend to
                                                             value, of all different types of media    get what they need, social
                                                             they prefer the Internet by 80%,          network joiners
                                                             importance of watching TV rates
                                                             around 42%

  Value Drivers       Delivered initial cost                 Delivered initial cost                   Delivered initial cost
                      Multiple platform capabilities         Multiple platform capabilities           Multiple platform capabilities
                      Best reading experience                Best reading experience                  Best reading experience
                      Best publications/publisher            Best publications/publisher              Best publications/publisher
                      partners                               partners                                 partners
                      Easy search and purchase               Easy search and purchase                 Easy search and purchase
                      Switching costs                        Switching costs                          Switching costs
  Brand Loyalty       High for items like apparel.           Medium level of brand loyalty.       Medium level of brand loyalty.
                      Specific books are required, so        Brand loyalty here refers to website Brand loyalty here refers to
                      doesn’t apply. Shop for best price.    and company, not products.           website and company, not
                                                                                                  products.
  Product Usage       High because of requirement, 6         Medium, averaging around 5           High, averaging around 5
                      very expensive books per year.         inexpensive books per year.          moderately expensive books per
                                                                                                  year.
  Price Sensitivity   High                                   Medium                               Low
  Market Size         10,218,952                             39,355,839                               38,896,213


Figure 5-3 Scribd Third Year Porter’s Five Forces Model
(Sources: Student Demographics, Spring 2008 Results, “Profile of the American College Student”,
www.dsa.vt.edu/facultyandstaff/documents, p. 9 – 13. Bureau of Labor and Statistics [Jason?])

The table below is used to compare Scribd, Amazon (Kindle), and Docstoc in regards to how
much they offer for each competitive factor. It summarizes each competitor’s current offerings to
the customer for each factor listed. It is used to determine the weights for the Strategy Canvas
proceeding this table.


Competitive Factors   Scribd                                Amazon (Kindle)                           Docstoc
Profit Structure      Authors receive 80% of the profits    Authors receive 35% profits and           Doctstoc currently does not sell
                      and Scribd receives 20%               Amazon receives 65% (Switch11,            any products.
                      (Amazon)                              2009)




                                                                35
Pricing                Authors choose price they would       Amazon sets the price for authors         Docstoc does not offer pricing
                       like to sell products for                                                       options


Hits per Site          50 million per month (Scribd)         65 million per month (Amazon)      4 million per month
Ease of Uploading      iPaper offers support for 17+         Any book published cannot be       Requires built in flash for upload
Documents              different file formats and converts   uploaded by the author. Amazon
                       them all flawlessly for reading in    needs to approve the book and they
                       their iPaper reader. (Scribd)         will then upload it.


Safety of Use          Scribd has had problems with          Amazon approves all books that are        Docstoc allows all users to upload
                       plagiarism because people can         sold through Kindle. The only books       materials. Similar to Scribd, they
                       upload anything they want.            allowed on the site are those that        cannot track plagiarized uploads
                       Previously, people have been          have already been published. They         unless it has been reported.
                       publishing others' written work and   have a high amount of safety for the
                       then taking the profits. Scribd       author.
                       allows users to report plagiarized
                       work and Scribd immediately takes
                       it off of the website




Dedication to          Scribd allows all types of writings   Amazon's dedication to the written        Docstoc has a strong dedication to
Written Word           to be posted on this site. There      word is not as strong because they        the written word, however, it is not
                       dedication to the written word is     monitor the content that is published     as high as Scribd because they
                       very strong.                          on the site. Their goal is also to make   limit the focus in regards to the
                                                             profit off of the books instead of        type of work that should be
                                                             spreading others' writings for an         published on the site. They prefer
                                                             affordable price.                         only business and educational
                                                                                                       material and do not support other
                                                                                                       types of writings. This makes their
                                                                                                       dedication a little lower than Scribd




Table 5-5 Competitive Factors — Author perspective


The Competitive Factors table is used to score each competitor based on how much of each
competitive factor they offer. This table takes qualitative data from the table above and turns it
into meaningful numerical data that can be used to rank each competitor based on the amount of
offerings they offer to the author.

Competitive Factors                                          Scribd             Amazon                  Docstoc
Pr ofit Str uctur e                                              5                   3                       1
Pr icing Fr eedom                                                5                   1                       1
Hits per site                                                    3                  4.5                      2
Ease of uploading book                                          4.5                 4.5                      3
Safety                                                           2                   5                       2
Dedic ation to Wr itten wor d                                    5                   3                       4
Total                                                           24.5                21                      13
Weighted Aver ages                                              4.08                3.5                    2.17

Table 5-6 Competitive Factors Weighted Averages — Author perspective

This graph illustrates visually how each competitor varies in terms of competitive factors. The
Strategy Canvas shows a value curve which summarizes how each competitor is doing within
each competitive factor segment.




                                                                 36
        6




        5




        4
 Degree of Offerings




                                                                                                                 Scr
        3                                                                                                        ibd




        2




        1




        0
                                      Pricing Freedom Hits per site of uploading book
                       Profit Structure                        Ease                     Dedication to Written word
                                                                                    Safety

                                                          Competitive Factors
Figure 5-7 Competitive Factors Comparison

Analysis:

With regard to authors’ competitive factors, Scribd is the leading company in profit structure,
pricing freedom, and dedication to the written word. Scribd.com is following closely behind
Amazon.com in hits per website. Both web sites are new to e-books, but Scribd’s numbers are
very impressive given the large breadth and depth of products Amazon sells, and their brand
equity and longevity.

Currently, Scribd is unique in valuing and espousing dedication to the written word; however, they
need to continue to enhance and add more services for authors to help them enhance and sell
their publications. Scribd has the potential to maintain leadership in this section if they are
persistent in providing services to the author.


Key Competitive Factors — Consumer Perspective


Price
Price is a key factor for consumers, when deciding to make a purchase and who to purchase
from. If one company’s e-book provides a very similar reading experience and searching
experience as all the others, the deciding factor will, most likely, be price. Consumers
continuously seek a product that has high value at a low cost.




                                                             37
Digital Reading Experience
With the adoption of e-books, readers are switching over from printed books because of factors
such as convenience, portability and flexibility. Innovators and early adopters are the first to
purchase e-books, which is why it is crucial to create the best digital experience for readers to
spread the word about e-books. Most readers will adopt the digital reading alternative if they feel
they can enhance the reading experience. Companies are continually innovating over to meet this
consumer need to become the leader in digital books and publications based on reading
experience.

It is also important to provide a positive digital reading experience because if readers are
unsatisfied with the current offerings, they will return to printed books. Digital reading experience
is a key competitive factor.

Speed, Ease of Purchase and Convenience
Readers are switching over to e-books because the ease and speed of purchase and immediate
download. The Scribd site, along with Amazon’s site, is easy to use, easy to search and easy to
purchase from. Amazon can download a book to the Kindle within 60 seconds (Amazon), which
has given them a competitive advantage over other e-book suppliers. The online book ordering
process also takes little time, but delivery date is dependent on shipping and handling. Readers
can substitute the digital book for a printed book, but that requires travel time to and from the
store, shopping, and purchasing, which may involve waiting in line. Immediate gratification is
more and more an expectation of consumers in general, and e-books can satisfy that desire.

Variety of Publications
Consumers seek a retailer that can provide literature that fits within their interests. It is a
competitive advantage with the online consumer segment to have a large variety of publications.
All three competitors supply different focuses on the type of reading material they offer. Amazon
focuses on mainstream books that have been published already by large publishing firms.
Docstoc supplies reading materials that fit in with business and education. Lastly, Scribd supplies
all different types of reading materials ranging from mainstream, business, educational, or purely
entertainment.

The table below is used to compare Scribd, Amazon (Kindle), and Docstoc in regards to how
much they offer for each competitive factor. It summarizes each competitor’s current offerings to
the customer for each factor listed. It is used to determine the weights for the Strategy Canvas
proceeding this table.

Competitive Factors   Scribd                               Docstoc                            Kindle
Price                 Scribd allows their publisher        All Docstoc work is downloaded     Kindle requires the actual
                      partners to set their own prices,    free of charge. Docstoc is most    purchase of the Kindle device
                      and keeps 20% of the retail price,   favorable when looking at price    that ranges from $300 to $400.
                      with 80% going to the publisher      alone.                             Amazon sets prices of
                      (Scribd). Because of this pricing                                       publishers work and often ranks
                      strategy Scribd prices range and                                        higher in price compared to
                      are not discounted.                                                     competitors.


Digital Experience    Documents are available for          Documents are available for        Makes the book more
                      immediate reading via their iPaper   immediate reading via their        interactive for reader. Most
                      reading interface. iPaper reading    Docstoc reader. Docstoc's reader   comparable product to having
                      interface translates documents       translates documents such as       and actual hard copy reading
                      such as PDF, PowerPoint, DOC         PDF, PowerPoint, DOC files pixel   experience. Can transform
                      files pixel for pixel to provide a   for pixel to provide a seamless    reading into audio experience.
                      seamless online viewing              online viewing experience.
                      experience.




                                                           38
Speed In Download       iPaper is embedded within Scribd's           Docstoc's reader is embedded        Any of the books are delivered
                        website (as well as any other site           within Docstoc's website (as well   electronically in less than 60
                        that chooses to embed the iPaper             as any other site that chooses to   seconds via the Kindle's 3G
                        reader within their pages). All of           embed the Docstoc reader within     wireless connection.
                        Scribd's content is available online.        their pages). All of Docstoc's
                                                                     content is available online.


Purchase                Simplicity, ease, and convenience            Clean and defined viewing.          Kindle requires the actual
Experience              in buying situation are distinct             Docstoc is focused in on            purchase of the Kindle reader.
                        characteristics that set Scribd apart        education and business and          Accessories are needed along
                        from competitors. Cleanliness of             clearly outlines search options     with actual device.
                        Scribd website makes for a                   to get to where consumers
                        uncluttered buying experience.               need to be.


Convenience             Documents are available for                  Documents are available for         Kindle device is needed for
                        immediate reading via their iPaper           immediate reading via their         download. Once device is
                        reading interface.                           Docstoc reader.                     purchased writings can be
                                                                                                         downloaded within 60 seconds.


Variety In Literature   5,000 plus available published               Centralized in business and         Published work only, ability for
                        offerings. Individual literature from        education. Individual literature    300,000 books plus magazines,
                        around the world published daily.            from around the world published     newspapers, and blogs
                        Wider variety unique writing.                daily.                              available in entertainment
                                                                                                         category.



Table 5-5 Competitive Factors — The consumer’s perspective

The Competitive Factors table is used to score each competitor based on how much of each
competitive factor they offer. This table takes qualitative data from the table above and turns it into
meaningful numerical data that can be used to rank each competitor based on the amount of
offerings they offer to the author.

Competitive Factors                                   Scribd                 Amazon                Docstoc
Price                                                            4                     3                   5
Digital Experience                                               4                     5                   3
Download Speed                                                   4                     5                   2
Ease of Purchase                                                4.5                    4                   4
Convenience                                                     4.5                    3                   4.5
Variety in Literature                                           4.5                    4                   2
Totals                                                          25.5                  24                  20.5
Weighted Average                                                4.25                 4.00                 3.42

Table 5-5 Competitive Factors Weights — The consumer’s perspective

This graph illustrates visually how each competitor varies in terms of competitive factors. The
Strategy Canvas shows a value curve which summarizes how each competitor is doing within
each competitive factor segment.




                                                                       39
        6




        5




        4
 Degree of Offerings




                                                                                                         Scr
        3                                                                                                ibd




        2




        1




        0
                       Price                  Download Speed of Purchase
                               Digital Experience         Ease                   Variety in Literature
                                                                        Convenience
                                                     Competitive Factors
Table 5-5 Strategy Canvas — The consumer’s perspective


Analysis
From the customers’ perspective, Scribd has the strongest competitive advantage in terms of
weighted averages. However, they need to focus their efforts on creating a more enhancing and
interactive digital experience for the customer. They should also focus on providing a platform
that makes the purchasing process easier and more convenient. Scribd is very competitive in the
market, however, there are many areas in which the product can improve on. The customer
seems to be most interested in the technology the product has, and dominates the field in
purchasing experience as well as variety in literature. These are important aspects Scribd should
focus strongly on because the ability to substitute Scribd with other products is very high.




Competitor Profiles
Market Leader
Amazon sells millions of books, movies, music and everything down to auto parts and toys. The
company is a distribution giant, with millions of users and purchases. Amazon is known for their
competitive prices emphasized through books. Amazon offers users many different services
through their website such as document storage through Docstoc, and eBook sales and their
wireless digital reader through Kindle.


Headquarter Locations

                                                       40
Amazon.com (Kindle)
1200 12th Ave south
Ste. 1200
Seattle, WA 98144


Number of employees
Amazon currently employs 20,700 employees; of which 1,000 preside at headquarters.
Employment has increased about 22% from December 2007 to December 2008
(Crunchbase.com 2009)


Growth Strategy

Docstoc
Docstoc’s growth strategy is to expand their document database and user database, both new
and continuing users. Docstoc also is in the process of innovating new technology to improve
their viewing, formatting and embedding functions to differentiate their site from competitors.
These technology advancements make their site a more desirable space to view and store
professional documents.

Docstoc not only is utilizing technology to improve their platform for growth, but they are also
adding a bookstore similar to Scribd’s. Docstoc will now allow authors to charge for their books
and will keep a percentage of profits. This addition is made to grow the company financially.

Amazon
The main growth strategy includes constant device updates to improve the reading experience
and break the barrier between reading a digital book and a traditional book. They improve their
technology continually to enhance the reading experience and maintain a competitive advantage.
Amazon continues to provide more services to the reader with each device update in order to
attract more customers to grow the company.


Market Position, Reach and Marketing Objective

Docstoc
Docstoc has geared their market position towards being the professionally lead document storage
website. The company’s objectives include continuing technology innovation to support the
needs of educators and business professionals, along with improving readership. Docstoc’s
market reach includes business professionals, educators, students, and some leisure readers.

Amazon
Amazon is the current technology leader in wireless reading devices. They have continually
improved their product to create a better digital reading experience. The company strategically
positions themselves to have a continually expanding library through Amazon.com. Amazon’s
market reach is global and universal.




                                                41
                Company Strategy                Brand Position                 Growth Strategy                  Market Strategy
 Scribd    Create profitability through   To create a place for every    Continually innovate new         To gain readership through
           sales continually grow         writer to be able to publish   technology to make better        improved technology, and
           library, user base and         their work, and for every      writing and reading              publisher partnership
           readership                     reader to enjoy their          experience. To continue
                                          reading experience             growing partnerships with
                                                                         publishing companies
 Docstoc   Gain readership of business    To be the professional         To continually grow              To differentiate themselves
           professionals and gain         publishing website that        relationships with               as the more trusted
           document accessibility         consumers know and trust       professional and business’s.     professional document
                                                                         Improve their technology to      storage site.
                                                                         enhance the web-based
                                                                         experience.
 Kindle    To make kindle units the       To create the most             Continually grow with            Provide customers with the
           universal digital reading      realistic and convenient       Amazon to expand their           entertainment and
           device for every household,    digital reading experience     library, and continually be in   convenience of being able
           and continually expand their                                  the forefront of innovative      to read anytime anywhere
           library and e-book sales                                      reading technology
           through Amazon

Table 5-5 Company Strategy, Brand Position, Growth Strategy, and Market Strategy by Competitors

This table represents the different strategies of Kindle, Docstoc, and Scribd. It shows the
different company cultures, and how they position their brand around them. The table shows the
differentiation of the market, and the specific strategies each company is using to gain a
competitive advantage.

Technology and Innovation

Docstoc has improved their technology to have better embedding functionality. The company is
constantly improving their platform to compete with iPaper. They also supply technology
advancements through API and widgets. API and widgets help set up new users, update, search,
also makes it possible to set up ads, and also make it possible for document to be read by other
users on different web sites

Kindle has reinvented the reading experience through their wireless reading device. Although
they are not the only company to produce this type of device, Kindle is leading the industry with
their newest device called Kindle DX. The new device is thinner and lighter than their old device,
and has advanced antiglare screen, along with page turning abilities to make for a more
traditional reading experience.

Financial Position

Amazon had operating revenue in 2008 of $19,166,000 which was up from their 2007 operating
revenue of $14,835,000. The company also has a positive cash flow of $985,000. Docstoc is a
venture-backed company with current funding around $4,000,000. Most of their funding is through
Rustic Canyon Partners. (Crunchbase.com 2009)

Pricing and Cost Structure

Docstoc is currently a free space to store your documents and published work. Kindle on the
other hand has a high startup cost for the consumer. The least expensive Kindle device starts at
$299 and the most expensive device sits at $489 through Amazon.com. Amazon currently sets
the price of their eBooks at $9.99, taking a several dollar loss on many books from the publishers.
(Rich, 2009)

Partnerships and Alliances and Industry Expertise
                                                             42
Both Docstoc and Kindle have a strong alliance in Amazon.com, along with Amazon’s continuous
stream of partnerships. Docstoc is a partner of Amazon, while Kindle is a division of Amazon.
Amazon’s other alliances include Netscape, Yahoo, Prodigy, AltaVista, and many more. This
partnership strongly benefits Kindle due Amazon’s vast library of e-books. The partnership with
Amazon also provides both Docstoc and Kindle with a vast amount of web-based retail and e-
commerce expertise.

Distribution

Docstoc is a self distributing site where readers can obtain others’ work, or authors can self
distributes their own. Kindle devices are distributed through Amazon, along with the e-books.
Amazon is working to continually integrate these systems to make an easier environment for the
consumer by providing a faster downloading speed and making the device portable.

Disruptive Potential

Disruptive potential to both Kindle and Docstoc is the threat of new entrants in the market. Many
companies are beginning to enter the cloud computing, and inventing new technology to view
documents through the computer and through wireless devices. The major disruptive potential is
that e-books is a relatively cheap industry to enter, new technology and integration or
consolidation can easily sway consumer’s motivations and value perceptions, along with their
buying situation.

Google has recently established their plan to enter the eBook market, Google already has made
available their 1.5 million public-domain books. Google has made these books available to read
through Kindle’s immediate competitor the Sony reader. (Rich, 2009)

Strengths and Weaknesses

Docstoc strengths include; no initial cost of ownership and disposal, no switching costs, good
embedding capability, strong professional following, and a strong alliance and backing from
Amazon. Weaknesses include consumer concerns to safety and copyright issues, and a smaller
readership than Scribd. Docstoc also has a smaller library and lacks in variety of literature
compared to Scribd.

Amazon digital books and publications strengths include innovative industry-leading technology,
an easy-to-use device, easy access to e-books through their already established large e-
commerce site, and the financial backing and infrastructure of Amazon. A weakness of Amazons
Kindle is the start up cost for the reader, which includes the cost of a Kindle in addition to the
price of eBooks. Amazon struggles to lower the cost of a Kindle device to the customer, due to
the high cost of production.

Competitive Benchmarks

Best in Class
Currently within the e-book industry, Amazon still manages to stay best in class regardless of
Scribd’s effort to take their market share. Scribd needs to be come as innovative as Amazon
Kindle in terms of products and services offered. To ensure competitiveness, Scribd needs to be
improving their current products and services and searching for innovations that can make them
best in class. Scribd is best in class in regards to reading a book on a computer; however, they
need to adopt a technique that can allow the reading experience to become portable.

Best in class companies are using the following strategies to maintain market leadership:



                                               43
    •   Continually innovating to make the reading experience more interactive and exciting
    •   Responding to changes in customer behavior by changing both products and services
        offered
    •   Simplifying the uploading and downloading process for the reader and author
    •   Leveraging assets to produce the largest return for this website
    •   Managing books uploaded to reduce plagiarism

With regard to technology, Amazon and Scribd are best in class. Amazon has been able to
produce a technology that allows the reader to read a book on a light and portable, high quality
platform and create an interactive reading experience. They have set the benchmark for
innovation and product line extension. Scribd is also leading in this category because of their
technology platform, iPaper, which has allowed the uploading and downloading process to be
much more user friendly. An e-book business has yet to compete with Scribd’s leading edge
downloading capabilities.

All of the current competitors are exceeding or improving on these best in class strategies;
however, it is a race for who can accomplish these strategies first. These best in class strategies
form the positioning of the product in the consumers’ minds. As more businesses are beginning to
adopt e-books, it is important to constantly work to maintain best in class strategies.

Competitive Gaps
Scribd has managed to maintain three competitive gaps that set them apart from others. The first
gap is their iPaper technology. This program has made it easier to download e-books than any
other e-book website currently running. This technology has eliminated the need to download
additional software programs that ultimately create inconvenience for the consumer. Consumers
are now able to read a book online through any computer with the click of a button. It has
increased the speed for downloading a book that far exceeds the speed of any competitor that
only offers their book online via a computer.

The second competitive gap Scribd maintains is their pricing strategy for books. Their flexible
approach to pricing can allow better purchase prices. Their ability to offer a high percentage of
revenue back to the authors has encouraged the authors to set lower prices than they normally
would for customers. Scribd has managed to create a competitive price gap that others are
having a hard time matching. This price reduction has lead to the increase of market share
stemming from customers leaving competitors in search of a lower price.

The last competitive gap Scribd maintains making their services open to the public. Amazon
monitors who publishes on their site, and Docstoc monitors the subject of the work published on
their website. Although both websites allow the public to download their works, Scribd maintains
an advantage because they do not have any type of restrictions for authors and readers. They
allow everyone to upload anything on the site as long as it is appropriate and not plagiarized. This
decision to allow everyone to become an author has created the a unique and very beneficial
buzz and popularity unmatched by their competitors. Their target markets are not restricted, and
in return attract people from all over to their website.

Conclusions

Currently, Scribd stands very strong among it’s competitors. There have been few major entrants
into the e-book industry which has helped Scribd maintain its competitiveness within the market.
Scribd’s ability to provide innovative technology has stabilized their competitive position within the
market. Scribd has taken advantage of the opportunities within the e-book industry by charging
readers, and opening up the site to the public for everyone to upload their written works.

Going forward, Scribd faces many factors that will affect competition. The first factor is
technology. As competitors gain better knowledge about what the reader is looking for in a
reading experience, companies who invest in leading technologies will ultimately meet their

                                                 44
needs. Right now, Scribd stands ahead of competitors’ technologies, however, they need to
continue to innovate, perhaps creating their own hardware solution such as the Kindle to stay a
top tier competitor.

Another factor Scribd also faces additional challenges, as others enter the e-book market. iTunes
and Google will soon enter into this market, which means Scribd needs to be taking proactive
steps to keep their customers from switching to industry giants. Google and iTunes have already
established a very large customer base and have successfully implemented additional services
that consumers have adopted. With the addition of companies to the e-book industry, Scribd must
find ways to provide more to the customer so they can prevent them from switching to another
competitor.

NET ASSESSMENT


SWOT Analysis
Analysis of the market for which Scribd finds itself along with potential markets available for them
to penetrate, we have come up with key issues that will need to be continually reviewed for Scribd
to become successful and have longevity.

This section provides further assessment of Scribd and their competition within the online
publishing industry. To understand each aspect of the company and the industry, a SWOT
analysis has been created. This allowed us to break down Scribd’s internal environment into
which positive assets give the company strength over their competition and which assets provide
disadvantages that need to be addressed. This exploration generates an overview of where
Scribd currently resides in the market. This analysis also provides a focus on their external
environment, which allows Scribd to understand what lies ahead in both potential opportunities
and foreseen threats to protect against. By understanding market opportunities, Scribd can
initiate penetration strategies to cash in on the financial and growth rewards new products or
service potentials may provide. This also helps to minimize risk and allows Scribd to create
strategies to deviate or eliminate them prior to becoming an important matter.

Strengths

One of Scribd’s major strengths stems from their technological innovation with the iPaper
platform. This disruptive technology allowed them to enter the document file sharing market with
an advantage over any of the big players in the industry. As a result Scribd has been able to
establish market awareness and credibility. Another benefit their technology awards them is the
ability to reach their market segment easily through worldwide distribution with multi-language
capabilities. Any individual that has access to the Internet is able to receive the benefits that
Scribd has to offer. As the Internet culture grows globally Scribd’s market potential will continue to
increase. As the market grows the culture also has migrated towards a more I want it now
mentality. This is beneficial to Scribd because it aligns with their current offerings. Scribd’s
investment capital gives them strength over companies like Docstoc and new market entries by
providing them with resources for R&D to continue to innovate. This also allows them an
opportunity to compete with the market dominant players like Amazon.

Other strengths include their ability to attract high profile publishers, which increases the value
their consumers receive. The indexing and embedding technology also provides benefits to both
their partners and customers. As the only company at the current period to have embedding
capabilities, this gives Scribd strength to increase their market share while others work on
matching their technology.

Weaknesses


                                                 45
Scribd is currently lacking an iPhone application. Though in the process of creation, the high
volume of iPhone owners is a segment Scribd needs to reach along with the fact that it provides
them with some form of reading platform to compete with Amazon’s Kindle. Though Scribd’s
innovative technology has awarded them some brand awareness, Scribd has no solid brand
equity and holds a very small percentage of the revenue-providing book selling market. Key
companies that have established a brand and multiple streams of revenue that provide them with
capital to improve their current offerings dominate this market. As Scribd attracts a greater
amount of publishers and writers they will be able to increase their revenue drivers. In their
current state they are limited in their potential to bring in substantial revenue gains without risking
turning their consumers away with too many advertisements.




                                                  46
Opportunities

Scribd’s current technology advantage and culture offer them an opportunity to attract a large
amount of publishers to help increase their revenue through purchases within their Scribd Store.
Within the current consumer culture there is a growing segment of green believing consumers.
This along with an economic push to become greener provides an opportunity for Scribd to reach
a larger market. Smaller businesses and educational institutions may try to save on print and
paper costs, while consumers move away from tangible publications to e-books and portable
reading devices. To better reach this segment Scribd has decided to pay for distribution rights on
Amazon’s Kindle devices. Scribd has an opportunity to produce a device to compete directly with
the Kindle to pull share from Amazon and reduce another revenue stream for Amazon. By
creating more value to the consumer with a mobile ability to read, Scribd would also improve
motivation for partners and writers to publish their works. Through increasing partnerships,
Scribd would have a greater opportunity to allocate revenue as well as decrease potential threats
of competitors locking in key partnerships. As the growth of the Internet moves into new markets
this would allow Scribd to have an increased number of credible resources and entertainment
offerings to attract new consumers. As our service is an intangible platform with multi-language
capabilities, the growth of the Internet is going to provide Scribd with a vast number of potential
new consumers and partners.

Threats
One of the largest issues that threaten Scribd’s future success is their ability to protect their
partners’ copyrights. If partners do not feel safe publishing their works on the site, Scribd’s
business concept may fall apart. Their culture and vision align with allowing anyone and everyone
to share their voice through print. Keeping individuals and companies secure with sharing is a
major factor in growing their culture and following their vision.

Another concern is the introduction of competitive disruptive technologies. The market Scribd
launched into is a niche market surrounded by a highly competitive larger segment. The players
in this segment have the resources for R&D to find ways to eliminate Scribd’s core competency of
platform integration or introduce new products that provide target consumers with more value
than is currently offered. They also have greater brand awareness and equity, which could be
used to lock down contracts with key sources of value creation for consumers. To stay ahead of
the cure with value driven product innovation Scribd has to increase profits and investments. If
investors feel Scribd’s potential for success is low they may limit their funding, which would drive
an increased focus on revenue, taking away from important R&D functions. This could coincide
with the downward local and global economies, which may drive consumers to squeeze their
notes and switch their buying behaviors away from the Scribd Store to free offerings. This could
lower revenue, which along with smaller investments numbers may cause Scribd to have to sell
off to an industry competitor.


Critical Factors

Scribd’s SWOT analysis shows that Scribd has room for improvement and areas where Scribd is
strong. With the SWOT analysis completed, there are some areas of great opportunities and
some areas where Scribd needs to take precautions to properly mitigate possible negative
issues. These steps are outlined in this section, first the risk factors are analyzed and suggestions
are made for mitigation. Second, the success factors will be analyzed.

Risk Factors
Upon completion of the SWOT analysis, it is clear that there are five major weaknesses/threats
that present themselves as risk factors. The table below outlines the five aforementioned risk
factors.


                                                 47
In any business, having multiple revenue drivers is important. A businesses health is usually
based on the amount/frequency of revenue that is coming into the business. A potential issue for
Scribd is that their revenue comes in the form of sales from the Scribd store. Of the revenue
generated, Scribd retains 20% of the sale of each document. To mitigate this, Scribd could create
more revenue streams (e.g. in-text advertisements & website advertisements).

With a new company, there is always a period of time where the new company has to work
furtively to establish their brand awareness and build their brand equity. This is an area where
Scribd can most definitely improve. Scribd has been established since March 2007 and has
Amazon.com as a competitor, so it’s a market where they’re competing against a household
name to be noticed. If Scribd can continue making their exclusive deals with publishers, they are
making definite strides towards increasing brand awareness and building brand equity.

With Amazon.com and Docstoc as the two major competitors, and others looming, Scribd is in a
highly competitive market. Docstoc has a website that emulates Scribd with the exception of
having a store element, as of July 2009, Docstoc has no online store selling documents.
Amazon.com offers 300,000 books, as well as a dedicated e-book reader. Scribd has an
advantage against each of these competitors, but as well could suffer from the advantages they
don’t have over the competitors. If Scribd can continue making exclusive deals with publishers
and develop their technologies, they can maintain their competitiveness in this highly competitive
market.


      Critical Risk Factor                    Description                                   Mitigation


 Low number of revenue          Scribd makes their money from               Scribd could add in-text advertisements
 drivers                        publishers who sell their documents on      as well as advertisements on their
                                the Scribd store. Scribd currently          website. This would be in an effort to
                                retains 20% of the sale price of each       increase the amount of revenue possible
                                document.                                   for Scribd.

 Minimal Market Brand           Scribd has been online since March          Scribd needs to continue signing
 Awareness & Brand Equity       2007. With a competitor like                exclusive deals with publishers and work
                                Amazon.com, it is difficult to get Scribd   to get their technology / content included
                                established as a household name.            in cross-branding efforts to expand brand
                                                                            awareness and brand equity.

 Highly Competitive Market      Due to the relatively low barriers-to-      As mentioned above, Scribd needs to
                                entry of e-book publishing and strong       continue making deals and work to further
                                existing competition, Scribd is in the      their technologies to capture and maintain
                                center of a very competitive market         as much of the market as possible.
                                space.

 Quick Product Innovations      Scribd, while established, has a            Scribd is a relatively small company and
                                relatively small company and needs to       as a result can be nimble in their
                                be concerned about potential & current      movements and evolve as the industry
                                competitors developing superior             develops.
                                products.

 iPaper and Core Competencies   Docstoc, Scribd’s most similar              Scribd is taking steps, the first being
 Duplicated                     competitor, has technology that is          launching the Scribd store, in making
                                almost exactly the same as what             duplication of their core competencies
                                Scribd offers.                              more difficult. Also, by adding value as
                                                                            they have, duplication of iPaper
                                                                            technology becomes less of a concern.



Table X-X Risk Factors – Scribd




                                                          48
Success Factors
This growing company is in a prime state to strengthen their current value drivers and tap into the
potential opportunities within the industry. With over $12 million in private funding the revenue
streams are beginning to open up with the release of the Scribd store and signing of major
publishers. (Crunchbase, Companies n.d.) The resources that are needed for success are
present; Scribd must now find the most effective strategy to suit the needs of their customers and
this growing industry.

Ipaper technology currently leads the way in this industry with easy uploading and downloading,
documents are converted to iPaper without having to change fonts, layout, or artwork. This
feature intertwined with millions of people with the ability to freely go onto Scribd, and upload their
own unique piece of work is what creates one of their biggest strengths, and truly sets them apart
from industry leaders. The convenience element and quality in displaying the integrity of Scribd
writers can be used as leverage against big time players such as Amazon.

Ipaper in conjunction with embedding capabilities enables users to incorporate “iPaper document
viewer” on their websites or blogs. This feature allows individuals to go onto websites with Scribd
embeds and view them without having to leave the site. Viewers are able to see the documents
the exact way publishers intended them to be seen. While other competitors like Docstoc have
embedding options, the iPaper technology once again is what sets Scribd embeds apart from
those that have similar features. The difference in embedding capabilities will be realized by both
readers and writers alike. Publishers will look for a company that provides them the most
effective way to display the integrity of their writing. Readers will enjoy the convenience of not
having to leave a site to read embeds and the originality of the work can be seen through the
iPaper technology.

Another strength Scribd has over its current competitors is the pricing structure, and relationship
with their publishers. With an 80/20 split in favor of the writers, and allowing for publishers to set
their own price points and make real time changes, there are no other companies that compares
with Scribd. (Scribd, “About us” n.d.) The company has a dedicated vision of sharing literature
with the world with quality and convenience as the underlying themes. This is a vision that can
be recognized by any publisher that encounters Scribd. This is also recognized when comparing
sites with Amazon who often clutters the pages with product on top of product with an unfocused
alignment in the needs and wants of a writer.

To ensure future success and sustainable growth Scribd must take the necessary action to
protect their iPaper and embedding capabilities. They must continue to stay technologically
innovative branching out to all downloading platforms including the iPhone. The iPhone
application will bring them one step closer in piloting a product that is similar to Amazon’s Kindle
reader. This will enable them to decide if further research and development should be spent
towards creating a Kindle like product. They must also take much more precaution in protecting
the rights of their writers surrounding plagiarism and copyright issues. While new products,
publishers, technology, and users expand in numbers, Scribd must maintain the easy-to-use
website, clutter free atmosphere, and stay true to their belief in “A writer’s dream, a reader’s
paradise.”

Growth in publishing companies is inevitable, yet Scribd must find a healthy balance in
maintaining good relations with current publishers while increasing brand equity and awareness
by signing on the new. Scribd has everything it needs to create new revenue streams. With the
ability to create alliances with newspapers, more publishers, businesses, and educational
facilities revenue can be generated in establishing contracts and partnerships with all of these
categories around the world. With 50 million unique hits every month, Scribd is just beginning to
scratch the surfaces of their followings potential purchasing power. (Scribd, “About us” n.d.)




                                                  49
       Critical Success Factors                             Description                                    Mitigation

Generate alternative revenue streams         To enable sustainable growth                 Newspapers, businesses, and
                                             partnerships and alliances will create new   educational facilities are ready for Scribd
                                             revenue streams.                             to come knocking creating alternative
                                                                                          outlets for readers that is fast,
                                                                                          convenient, and affordable.
Establish relationships with more big time   Big time publisher growth is imperative in   Advertising pricing structure, ability for
publishers.                                  generating revenue and establishing new      real-time changes, and the integrity in
                                             customers.                                   displaying publishing will attract more
                                                                                          publishers.
Continue to be technology leaders in the      iPaper technology and embedding             With the making of an iPhone application,
industry                                     capabilities combined is what                Scribd will better understand how their
                                             differentiates Scribd from their             product compares with Amazon’s Kindle
                                             competitors.                                 reader. Advancements in iPaper
                                                                                          technology and embedding capabilities
                                                                                          will continue to set Scribd apart from the
                                                                                          pack.
Growth in brand equity and awareness         Brand equity and awareness attract           Continuous growth in brand image can be
                                             readers and writers alike.                   achieved through strong communication
                                                                                          of the service offerings and growth in
                                                                                          more established authors.
Maintain focus surrounding the “big idea”    With new technology, product offerings,      By maintaining an easy-to-use website,
during growth period                         and published work, Scribd needs to          and keeping clean and professional look
                                             channel in the direction of the company      with uncluttered pages, Scribd will display
                                             towards it vision of “A writers dream, a     their dedication to the written word.
                                             readers paradise.”

Table 6-2 Success Factors — Scribd


Conclusions
After reviewing and analyzing Scribd’s competitiveness within their market, we feel as though
Scribd has a viable reason to move forward. Scribd is the provider of the most advanced social
documentation distribution platform, still, this is an important time for Scribd to gain as much
market share and awareness as possible. Their core competency will at some point become an
industry-shared technology, so Scribd must create a large consumer base while focusing on
adaptive and innovative ways to increase their current value offerings. As their consumer volume
grows Scribd must follow their vision to promote their culture and enlarge create a loyal following.
Their vision is clearly key to their big idea. The big idea was formed from their overall vision and
represents the culture they serve. Scribd needs to stay true to this vision in order for them to
benefit from a following of consumers that believe Scribd to be the best channel representing
their desires and needs.

Scribd has entered a market that represents a large number of potential consumers. Many new
entrants and larger companies are trying to capture market share. The advancement of new
technologies and a focus on their target markets key value drivers will keep Scribd ahead of
these potential competitors.

Scribd has built a presence over the Internet as a place where readers can buy books for a low
price and where authors can upload their written works to share with the public. The marketing
plan should move forward as Scribd has set the foundation for an already established customer
base. This customer base is expanding rapidly as more people learn of the type of service Scribd
offers. The expanding customer base shows that Scribd will be a reliable business for authors
and readers. More companies will be inclined to work with Scribd as they become aware of the
fact that number of hits the website receives daily is growing each month.

Scribd should move forward because they offer a service that no other e-Book retailer can offer: a
public website where anyone can upload written work. Scribd has caught the eye of all authors

                                                                50
Robert Harmon © 2008




     Create Your Company's Value Proposition
!   Describe the unique value combinations of features, advantages, benefits, and price
    that are desired by your customers.
!   Identify how the customer perceives the value of your offering vs. the value offered by
    key competitors.
!   Considering your company’s products and services, and the preceding value driver
    discussion, develop a statement to describe your company’s customer value
    proposition.

             Our Unique Value                                Key Competitor Value

Features for the Scribd products and              For DocStoc key features include an easy-
services include an easy-to-access and use        to-access and use website, and a
website, and the iPaper reader technology,        technology platform through various APIs
which provides multi-platform                     and Widgets that help in the sharing and
upload/download formats and viewers.              promotion of documents.

The iPaper technology provides a unique           Neither their website nor their technology
advantage over key competitors.                   provide benefits that equal Scribd's.

The benefits of these features include an         The benefits of their features are similar, but
simple publishing, searching, downloading         to a lesser degree.
and embedding of materials and faster
purchasing. Another key benefit is the            For Amazon, a key feature is the portable
viewing experience the Scribd technology          and well-designed hardware solution, the
provides, which is equal to or better than        Kindle. Benefits unique to the Kindle are the
those of key competitors.                         read-to-me function and portable storage or
                                                  library. Additionally, the Kindle provides a
In addition, pricing strategy and revenue         display that more closely simulates reading
model for publishers selling through the          paper books than other technologies
Scribd store is can be perceived as a feature     currently offered.
which benefits both publishers and
consumers, as it improves access to more          The Amazon pricing strategy also benefits
available works. It is also unique to Scribd,     consumers, as product prices will most likely
and therefore an advantage over key               be lower than Scribd's. However, they may,
competitors.                                      in the long run, lose publishers to Scribd and
                                                  others who provide a higher share in
Consumers will value the simplicity and           revenue. Volume sold will weigh heavily in
lesser cost of ordering from Scribd initially,    this determination, as Amazon has the
as there are no hardware costs or shipping        advantage of being well known and trusted.
and handling costs.
                                                  The Amazon products are only available for
                                                  use with their hardware solution, the Kindle.
                                                  Higher perceived price could inhibit
                                                  consumers from using Amazon as their


                                    Customer Value Drivers                                          20
Robert Harmon © 2008



                                           resource for buying digital written works.


                            Our Value Proposition



       An innovative global resource where writers and publishers thrive,
                      and readers share, learn and enjoy.

                                       -or-

                      Where writers and publishers thrive,
                      and readers share, learn and enjoy.




                             Customer Value Drivers                                     21
                                                The alternative
                             Internet-Savvy                     Career-Oriented
                                                    online                            Other         Market Potential
                            College Student                      Professional
                                                  consumer
Total Buyers                       2,554,738        23,337,728          9,838,960     18,136,080         53,867,506
Average Purchase Price                   $78                $24              $14              $24
Number of Units
Purchased per Year                          9                14               10                2
Scribd's 80/20 Split                     $16                 $5               $3              $5
Segment Potential               $200,470,291      $563,606,131      $135,285,700    $435,265,926     $1,334,628,048
Total % of TAM                            5%               43%               18%             34%              100%


*Growth Rate is 46% per Year for The alternative online consumer
*Growth Rate is 1.38% per Year for the Internet-Savvy College Student
*Growth Rate is 15% per Year for the Career-Oriented Professional
                       Assumptions                                                                                Baseline                              Forecast
                                                                                                                             Y0                 Y1                 Y2               Y3
           TAM ASSESSMENT: Total Product Market
                  1 Internet Savvy College Students(Total USA TAM Potential-Units)                                  2,554,738
                  2 Growth Rate in Ebook Users                                                                            12%
                  3 Total Ebook Users (Potential per year)                                                                               2,861,307         3,204,663         3,589,223
                  4 Current Average User Expenditure on Ebook (Estimate)                                      $            78
                  5 Annual Growth Rate in Users Spending on Ebook (% Price Change)                                     12.40%
                  6 Forecast Average User Expenditure on Ebook (Price x 1 - 0.15)                                             $                 88 $              99 $             111
                  7 Total USA Users Spending on Ebook (Total USA TAM in dollars)                              $   199,269,564 $        250,856,469 $     315,798,191 $     397,552,027
           Market Share Assumptions for Scribds
                  8 Share of market estimate (Y0 initial share for Ebooks)                                                 2%
                  9 Annual change in market share [Change in share as f(new entries in market)]                        -0.01%                1.99%             1.98%             1.97%

                          Fourt & Woodlock Diffusion Equation



                     Qt = rq(1-r) t-1

           Qt        Increment in cumulative sales (ie. Sales at time "t") as fraction of potential sales
           r         Rate of penetration of untapped potential (a constant)                                                                   55%
           q         Total potential sales as a fraction of all buyers                                                                          5%
           t         Time period

                                     Forecast Model
                                                                                                                      Internet Savvy College Students
                                   Annual SAM Estimates
                                                                                                                 Scribd            Total Internet
                                                                                         Scribd Users                                                  Scribd Share      Scribd Sales
            Time Period      Incremental Sales             Cumulative Sales                                   Spending Per         Savvy College
                                                                                          Adoption                                                       Potential        Forecast
                                                                                                                  User            Spending ($ mil)
           Qt         1                      2.75%                           2.75%                   78,686   $              88   $      6,898,553             1.99% $         137,281
           Qt         2                      1.24%                           3.99%                  127,786   $              99   $     12,592,453             1.98% $         249,331
           Qt         3                      0.56%                           4.54%                  163,108   $          111      $     18,066,255             1.97% $         355,905




File: Jason New Forcasting Model.xlsx - Internet-Savvy College Student
                        Assumptions                                                                               Baseline                                  Forecast
                                                                                                                             Y0                  Y1                    Y2                      Y3
           TAM ASSESSMENT: Total Product Market
                  1 Alternative Online Consumer (Total USA TAM Potential-Units)                                    23,337,728
                  2 Growth Rate in Ebook Users                                                                            30%
                  3 Total Ebook Users (Potential per year)                                                                              30,339,046           39,440,760             51,272,988
                  4 Current Average User Expenditure on Ebook (Estimate)                                      $            14
                  5 Annual Growth Rate in Users Spending on Ebook (% Price Change)                                      2.00%
                  6 Forecast Average User Expenditure on Ebook (Price x 1 - 0.15)                                                 $             14    $              14     $               15
                  7 Total USA Users Spending on Ebook (Total USA TAM in dollars)                              $   320,893,760     $    425,505,126    $     564,219,797     $      748,155,451
           Market Share Assumptions for Scribds
                  8 Share of market estimate (Y 0 initial share for Ebooks)                                               25%
                  9 Annual change in market share [Change in share as f(new entries in market)]                        -0.01%               24.99%               24.98%                 24.97%

                           Fourt & Woodlock Diffusion Equation



                     Qt = rq(1-r) t-1

           Qt        Increment in cumulative sales (ie. Sales at time "t") as fraction of potential sales
           r         Rate of penetration of untapped potential (a constant)                                                                    55%
           q         Total potential sales as a fraction of all buyers                                                                         43%
           t         Time period

                                     Forecast Model
                                                                                                                        Alternative Online Consumer
                                   Annual SAM Estimates
                                                                                                                 Scribd           Total Alternative
                                                                                         Scribd Users                                                     Scribd Share          Scribd Sales
            Time Period      Incremental Sales             Cumulative Sales                                   Spending Per        Online Consumer
                                                                                          Adoption                                                          Potential            Forecast
                                                                                                                  User            Spending ($ mil)
           Qt          1                    23.65%                         23.65%                 7,175,184   $              14   $    100,631,962               24.99% $           25,147,927
           Qt          2                    10.64%                         34.29%                13,525,223   $              14   $    193,485,074               24.98% $           48,332,571
           Qt          3                     4.79%                         39.08%                20,038,317   $              15   $    292,391,308               24.97% $           73,010,110




File: Jason New Forcasting Model.xlsx - Conscientious Alternative
                       Assumptions                                                                                Baseline                              Forecast
                                                                                                                             Y0                 Y1                 Y2               Y3
           TAM ASSESSMENT: Total Product Market
                  1 Career-Oriented Professional (Total USA TAM Potential-Units)                                    9,838,960
                  2 Growth Rate in Ebook Users                                                                            15%
                  3 Total Ebook Users (Potential per year)                                                                              11,314,804        13,012,025        14,963,828
                  4 Current Average User Expenditure on Ebook (Estimate)                                      $            24
                  5 Annual Growth Rate in Users Spending on Ebook (% Price Change)                                      2.00%
                  6 Forecast Average User Expenditure on Ebook (Price x 1 - 0.15)                                             $                 25 $              25 $              26
                  7 Total USA Users Spending on Ebook (Total USA TAM in dollars)                              $   237,610,884 $        278,717,567 $     326,935,706 $     383,495,583
           Market Share Assumptions for Scribds
                  8 Share of market estimate (Y0 initial share for Ebooks)                                                10%
                  9 Annual change in market share [Change in share as f(new entries in market)]                        -0.01%                9.99%             9.98%             9.97%

                          Fourt & Woodlock Diffusion Equation



                     Qt = rq(1-r) t-1                                                                         Career-Oriented

           Qt        Increment in cumulative sales (ie. Sales at time "t") as fraction of potential sales
           r         Rate of penetration of untapped potential (a constant)                                                                   55%
           q         Total potential sales as a fraction of all buyers                                                                        18%
           t         Time period

                                     Forecast Model
                                                                                                                        Career-Oriented Professional
                                   Annual SAM Estimates
                                                                                                                                   Total Career-
                                                                                                                  Scribd
                                                                                         Scribd Users                                Oriented          Scribd Share      Scribd Sales
            Time Period      Incremental Sales             Cumulative Sales                                    Spending Per
                                                                                          Adoption                                 Professional          Potential        Forecast
                                                                                                                   User
                                                                                                                                  Spending ($ mil)
           Qt         1                      9.90%                           9.90%                1,120,166   $              25   $     27,593,039             9.99% $       2,756,545
           Qt         2                      4.46%                         14.36%                 1,867,876   $              25   $     46,931,621             9.98% $       4,683,776
           Qt         3                      2.00%                         16.36%                 2,448,045   $              26   $     62,738,919             9.97% $       6,255,070




File: Jason New Forcasting Model.xlsx - Career-Oriented
                                             3 Year Forcast for Scribd
           Internet-Savvy College Student     The alternative online consumer     Career-Oriented Professional



                                                                                                    $73,010,110



                                                       $48,332,571

           $25,147,927

                                                                                                                  $6,255,070




                                                                     $4,683,776




                         $2,756,545




                                            $249,331                                    $355,905
$137,281


              2009                                        2010                                         2011
                                  Segment Attractiveness




         10

          9

          8

          7

          6
Rating




                                                                Student Reader

          5                                                     Online Consumer
                                                                Business Reader
          4

          3

          2

          1

          0
              F1   F2   F3   A1   A2    A3     B1    B2    B3




                                        SAFs
      Segment Attractiveness Factor (SAF)                Segment A                                Segment B                                Segment C
                                            Post-secondary student readers          Leisure Readers                           Business Readers
Key Product Features
F1                                          Easy-to-use website                     Website layout/functionality              iPaper multi-platform uploads/downloads
F2                                          iPaper multi-platform uploads/downloads Reading experience                        Embedding capability
F3                                          Online social network                   iPaper multi-platform uploads/downloads   File storage and indexing

Key Product Advantages
A1                                          Paper reading platform                  Paper reading platform                    Paper reading platform
A2                                          iPaper multi-platform uploads/downloads iPaper multi-platform uploads/downloads   Paper reading platform
A3                                          Online social network                   Online social network                     File storage and indexing

Key Product Benefits
B1                                          Quick and free global access            More pleasurable viewing/reading          Document integrity
B2                                          More pleasurable viewing/reading        Multi-platform portable access            Privacy (?)
B3                                          Document integrity                      Social community                          Multi-platform portable access

Key CVDs
Economic                                    Delivered initial cost                  Delivered initial cost                    Price sensitivity
                                            Price sensitivity                       Price sensitivity                         Switching costs
Performance                                 Website efficiency                      Multiple platform capabilities            Best availability of publications
                                            Best reading experience (feature set)   Best reading experience (feature set)     Best reading experience (feature set)
Supplier                                    Best vision for writers and readers     Best vision for writers and readers       Best vision for writers and readers
                                            Best publicatons/publisher partners     Best publicatons/publisher partners       Credibility and stability.
Buyer Motivations & Goals                   Easy to purchase                        Customer database preferences             Flexibility
                                            Quality material at low price           Best price                                Availability
Situational                                     y
                                            Easy to search                              y
                                                                                    Easy to search                                y
                                                                                                                              Easy to search
                                            Flexibility                             Easy to purchase                          Easy to purchase

Other Factors
Segment Size                                                                                                                                                   65,000,000
Growth Rate                                                                                                                   12% per year
Market Access                               Medium                                  Medium                                    High
Market Size
Market Growth
Market Potential
Competitor Intensity                        Medium                                  High                                      Low to medium
Number of Companies
Substitutes
Propensity to purchase e-books              Medium High                             Medium Low                                Medium High
                  ***EXAMPLE*** Linked to SAF Chart in Sheet 3

                     F1         F2         F3         A1         A2      A3         B1         B2        B3
Student Reader              8    8.25             6          8     9.5          4        8.5    4.75            4
Online Consumer             8      10           2.5        6.5       4          8          9    4.75          4.5
Business Reader           8.5       8           6.5        3.5    8.25        4.5        9.5      9.5         4.5


                                        Weighted Averages
Factor Weight          0.17       0.2       0.06      0.07        0.08    0.06           0.2     0.13     0.05             1.000
                                                                                                                        Wtd Avg
Student                1.36      1.65       0.36       0.56       0.76    0.24           1.7   0.6175      0.2             7.448
Online Consumer        1.36         2       0.15      0.455       0.32    0.48           1.8   0.6175    0.225        0    7.408
Business Reader         1.4       1.6        0.4        0.2        0.7     0.3           1.9       1.2      0.2     0.0    7.970
                  ***EXAMPLE*** Linked to SAF Chart in Sheet 3

                   CVD 1      CVD 2      CVD 3     CVD 4     CVD 5      CVD 6      CVD 7      CVD 8     CVD 9   CVD 10
Student Readers         10          8        6.5     6.25           3         9        6.5        8.5     6.75      6.5
Online Consumer        9.5        6.5        9.5       8.5          7       8.5      6.75           8         8       8
Business Reader        6.5        6.5          8     6.25        4.25       10           7        6.5       7.5    4.75


                                        Weighted Averages
Factor Weight          0.17       0.1       0.14      0.13       0.04      0.17       0.02       0.12       0.1    0.02    1.000
                                                                                                                        Wtd Avg
Segment A               1.7       0.8       0.91    0.8125       0.12      1.53       0.13       1.02     0.675    0.13    7.828
Segment B             1.615      0.65       1.33     1.105       0.28     1.445      0.135       0.96       0.8    0.16    8.480
Segment C               1.1       0.7        1.1       0.8        0.2        1.7        0.1       0.8        0.8    0.1    7.323
      Segment Attractiveness Factor (SAF)                Segment A                                   Segment B                               Segment C
                                            Post-secondary student readers             Leisure Readers                          Business Readers
Key Product Features
F1                                          Easy-to-use website                     Website layout/functionality                iPaper multi-platform uploads/downloads
F2                                          iPaper multi-platform uploads/downloads Reading experience                          Embedding capability
F3                                          Online social network                   iPaper multi-platform uploads/downloads     File storage and indexing

Key Product Advantages
A1                                          Paper reading platform                  Paper reading platform                      Paper reading platform
A2                                          iPaper multi-platform uploads/downloads iPaper multi-platform uploads/downloads     Paper reading platform
A3                                          Online social network                   Online social network                       File storage and indexing

Key Product Benefits
B1                                          Quick and free global access               More pleasurable viewing/reading         Document integrity
B2                                          More pleasurable viewing/reading           Multi-platform portable access           Privacy (?)
B3                                          Document integrity                         Social community                         Multi-platform portable access

Key CVDs
Economic                                    Delivered initial cost                     Delivered initial cost                   Price sensitivity
                                            Price sensitivity                          Price sensitivity                        Switching costs
Performance                                 Website efficiency                         Multiple platform capabilities           Best availability of publications
                                            Best reading experience (feature set)      Best reading experience (feature set)    Best reading experience (feature set)
Supplier                                    Best vision for writers and readers        Best vision for writers and readers      Best vision for writers and readers
                                            Best publicatons/publisher partners        Best publicatons/publisher partners      Credibility and stability.
Buyer Motivations & Goals                   Easy to purchase                           Customer database preferences            Flexibility
                                            Quality material at low price              Best price                               Availability
Situational                                     y
                                            Easy to search                                 y
                                                                                       Easy to search                               y
                                                                                                                                Easy to search
                                            Flexibility                                Easy to purchase                         Easy to purchase

Other Factors
Segment Size                                                              18,248,128                                  10,639,652                                 50,000,000
Growth Rate                                                                     10%                                         13% 12% per year
Market Access                               Medium                                     Medium                                    High
Market Size
Market Growth
Market Potential
Competitor Intensity                        Medium                                     High                                     Low to medium
Number of Companies
Substitutes
Propensity to purchase e-books              Medium High                                Medium Low                               Medium High
                                        Segment Attractiveness




         10

         9

         8

         7

         6
Rating




                                                                                               Student Readers

         5                                                                                     Online Consumer
                                                                                               Business Reader
         4

         3

         2

         1

         0
              CVD 1   CVD 2   CVD 3   CVD 4   CVD 5   CVD 6   CVD 7   CVD 8   CVD 9   CVD 10




                                                 SAFs
NET ASSESSMENT
The marketing net assessment is the compilation of the totality of the marketing opportunity
assessment. The analysis of the market for which Scribd finds itself along with potential markets
available for them to penetrate, we have come up with key issues that will need to be continually
reviewed for Scribd to become successful and have longevity. With an unmatched file sharing
platform, Scribd has the foundation laid to become an industry leader in the online document
sharing industry as more viewers contine to visit their site.

This section provides further assessment of Scribd and their competition within the online
publishing industry. To understand each aspect of the company and industry, a SWOT analysis
has been created. A SWOT analysis is the summary of all the situational forces that provide
current and future strenghts, weaknesses, opportunities, and threats that have been uncovered in
the previous sections. (Best, 2007) This allowed us to break down Scribd’s internal environment
into which positive assets give the company strength over their competition and which resources
provide disadvantages that need to be addressed. This exploration generates an overview of
where Scribd currently resides in the market. This analysis also provides a focus on their
external environment, which allows Scribd to understand what lies ahead in both potential
opportunities and foreseen threats to protect against. By understanding market opportunities,
Scribd can initiate penetration strategies to cash in on the financial and growth rewards new
products or service potentials may provide. This also helps to minimize risk and allows Scribd to
create strategies to deviate or eliminate them prior to becoming an important matter.



SWOT Analysis

Strengths

One of Scribd’s major strengths stems from their technological innovation with the iPaper
platform. This disruptive technology allowed them to enter the document file sharing market with
an advantage over any of the big players in the industry. As a result Scribd has been able to
establish market awareness and credibility. Another benefit their technology awards them is the
ability to reach their market segment easily through worldwide distribution with multi-language
capabilities. Any individual that has access to the Internet is able to receive the benefits that
Scribd has to offer. As the Internet culture grows globally Scribd’s market potential will continue to
increase. As the market grows the culture also has migrated towards a more I want it now
mentality. This is beneficial to Scribd because it aligns with their current offerings. Scribd’s
investment capital gives them strength over companies like Docstoc and new market entries by
providing them with resources for R&D to continue to innovate. This also allows them an
opportunity to compete with the market dominant players like Amazon.

Other strengths include their ability to attract high profile publishers, which increases the value
their consumers receive. The indexing and embedding technology also provides benefits to both
their partners and customers. As the only company at the current period to have embedding
capabilities, this gives Scribd strength to increase their market share while others work on
matching their technology.

Weaknesses

Scribd is currently lacking an iPhone application. Though in the process of creation, the high
volume of iPhone owners is a segment Scribd needs to reach along with the fact that it provides
them with some form of reading platform to compete with Amazon’s Kindle. Though Scribd’s
innovative technology has awarded them some brand awareness, Scribd has no solid brand
equity and holds a very small percentage of the revenue-providing book selling market. Key
companies that have established a brand and multiple streams of revenue that provide them with
capital to improve their current offerings dominate this market. As Scribd attracts a greater
amount of publishers and writers they will be able to increase their revenue drivers. In their
current state they are limited in their potential to bring in substantial revenue gains without risking
turning their consumers away with too many advertisements.

Opportunities

Scribd’s current technology advantage and culture offer them an opportunity to attract a large
amount of publishers to help increase their revenue through purchases within their Scribd Store.
Within the current consumer culture there is a growing segment of green believing consumers.
This along with an economic push to become greener provides an opportunity for Scribd to reach
a larger market. Smaller businesses and educational institutions may try to save on print and
paper costs, while consumers move away from tangible publications to e-books and portable
reading devices. To better reach this segment Scribd has decided to pay for distribution rights on
Amazon’s Kindle devices. Scribd has an opportunity to produce a device to compete directly with
the Kindle to pull share from Amazon and reduce another revenue stream for Amazon. By
creating more value to the consumer with a mobile ability to read, Scribd would also improve
motivation for partners and writers to publish their works. Through increasing partnerships,
Scribd would have a greater opportunity to allocate revenue as well as decrease potential threats
of competitors locking in key partnerships. As the growth of the Internet moves into new markets
this would allow Scribd to have an increased number of credible resources and entertainment
offerings to attract new consumers. As our service is an intangible platform with multi-language
capabilities, the growth of the Internet is going to provide Scribd with a vast number of potential
new consumers and partners.

Threats
One of the largest issues that threaten Scribd’s future success is their ability to protect their
partners’ copyrights. If partners do not feel safe publishing their works on the site, Scribd’s
business concept may fall apart. Their culture and vision align with allowing anyone and everyone
to share their voice through print. Keeping individuals and companies secure with sharing is a
major factor in growing their culture and following their vision.

Another concern is the introduction of competitive disruptive technologies. The market Scribd
launched into is a niche market surrounded by a highly competitive larger segment. The players
in this segment have the resources for R&D to find ways to eliminate Scribd’s core competency of
platform integration or introduce new products that provide target consumers with more value
than is currently offered. They also have greater brand awareness and equity, which could be
used to lock down contracts with key sources of value creation for consumers. To stay ahead of
the cure with value driven product innovation Scribd has to increase profits and investments. If
investors feel Scribd’s potential for success is low they may limit their funding, which would drive
an increased focus on revenue, taking away from important R&D functions. This could coincide
with the downward local and global economies, which may drive consumers to squeeze their
notes and switch their buying behaviors away from the Scribd Store to free offerings. This could
lower revenue, which along with smaller investments numbers may cause Scribd to have to sell
off to an industry competitor.


Critical Factors

Scribd’s SWOT analysis shows that Scribd has room for improvement and areas where Scribd is
strong. With the SWOT analysis completed, there are some areas of great opportunities and
some areas where Scribd needs to take precautions to properly mitigate possible negative
issues. These steps are outlined in this section, first the risk factors are analyzed and suggestions
are made for mitigation. Second, the success factors will be analyzed.
Risk Factors
Upon completion of the SWOT analysis, it is clear that there are five major weaknesses/threats
that present themselves as risk factors. The table below outlines the five aforementioned risk
factors.

In any business, having multiple revenue drivers is important. A businesses health is usually
based on the amount/frequency of revenue that is coming into the business. A potential issue for
Scribd is that their revenue comes in the form of sales from the Scribd store. Of the revenue
generated, Scribd retains 20% of the sale of each document. To mitigate this, Scribd could create
more revenue streams (e.g. in-text advertisements & website advertisements).

With a new company, there is always a period of time where the new company has to work
furtively to establish their brand awareness and build their brand equity. This is an area where
Scribd can most definitely improve. Scribd has been established since March 2007 and has
Amazon.com as a competitor, so it’s a market where they’re competing against a household
name to be noticed. If Scribd can continue making their exclusive deals with publishers, they are
making definite strides towards increasing brand awareness and building brand equity.

With Amazon.com and Docstoc as the two major competitors, and others looming, Scribd is in a
highly competitive market. Docstoc has a website that emulates Scribd with the exception of
having a store element, as of July 2009, Docstoc has no online store selling documents.
Amazon.com offers 300,000 books, as well as a dedicated e-book reader. Scribd has an
advantage against each of these competitors, but as well could suffer from the advantages they
don’t have over the competitors. If Scribd can continue making exclusive deals with publishers
and develop their technologies, they can maintain their competitiveness in this highly competitive
market.


      Critical Risk Factor                 Description                                  Mitigation


 Low number of revenue       Scribd makes their money from               Scribd could add in-text advertisements
 drivers                     publishers who sell their documents on      as well as advertisements on their
                             the Scribd store. Scribd currently          website. This would be in an effort to
                             retains 20% of the sale price of each       increase the amount of revenue possible
                             document.                                   for Scribd.


 Minimal Market Brand        Scribd has been online since March          Scribd needs to continue signing
 Awareness & Brand Equity    2007. With a competitor like                exclusive deals with publishers and work
                             Amazon.com, it is difficult to get Scribd   to get their technology / content included
                             established as a household name.            in cross-branding efforts to expand brand
                                                                         awareness and brand equity.


 Highly Competitive Market   Due to the relatively low barriers-to-      As mentioned above, Scribd needs to
                             entry of e-book publishing and strong       continue making deals and work to further
                             existing competition, Scribd is in the      their technologies to capture and maintain
                             center of a very competitive market         as much of the market as possible.
                             space.


 Quick Product Innovations   Scribd, while established, has a            Scribd is a relatively small company and
                             relatively small company and needs to       as a result can be nimble in their
                             be concerned about potential & current      movements and evolve as the industry
                             competitors developing superior             develops.
                             products.
 iPaper and Core Competencies   Docstoc, Scribd’s most similar       Scribd is taking steps, the first being
 Duplicated                     competitor, has technology that is   launching the Scribd store, in making
                                almost exactly the same as what      duplication of their core competencies
                                Scribd offers.                       more difficult. Also, by adding value as
                                                                     they have, duplication of iPaper
                                                                     technology becomes less of a concern.



Table X-X Risk Factors – Scribd
Success Factors
This growing company is in a prime state to strengthen their current value drivers and tap into the
potential opportunities within the industry. With over $12 million in private funding the revenue
streams are beginning to open up with the release of the Scribd store and signing of major
publishers. (Crunchbase, Companies n.d.) The resources that are needed for success are
present; Scribd must now find the most effective strategy to suit the needs of their customers and
this growing industry.

Ipaper technology currently leads the way in this industry with easy uploading and downloading,
documents are converted to iPaper without having to change fonts, layout, or artwork. This
feature intertwined with millions of people with the ability to freely go onto Scribd, and upload their
own unique piece of work is what creates one of their biggest strengths, and truly sets them apart
from industry leaders. The convenience element and quality in displaying the integrity of Scribd
writers can be used as leverage against big time players such as Amazon.

Ipaper in conjunction with embedding capabilities enables users to incorporate “iPaper document
viewer” on their websites or blogs. This feature allows individuals to go onto websites with Scribd
embeds and view them without having to leave the site. Viewers are able to see the documents
the exact way publishers intended them to be seen. While other competitors like Docstoc have
embedding options, the iPaper technology once again is what sets Scribd embeds apart from
those that have similar features. The difference in embedding capabilities will be realized by both
readers and writers alike. Publishers will look for a company that provides them the most
effective way to display the integrity of their writing. Readers will enjoy the convenience of not
having to leave a site to read embeds and the originality of the work can be seen through the
iPaper technology.

Another strength Scribd has over its current competitors is the pricing structure, and relationship
with their publishers. With an 80/20 split in favor of the writers, and allowing for publishers to set
their own price points and make real time changes, there are no other companies that compares
with Scribd. (Scribd, “About us” n.d.) The company has a dedicated vision of sharing literature
with the world with quality and convenience as the underlying themes. This is a vision that can
be recognized by any publisher that encounters Scribd. This is also recognized when comparing
sites with Amazon who often clutters the pages with product on top of product with an unfocused
alignment in the needs and wants of a writer.

To ensure future success and sustainable growth Scribd must take the necessary action to
protect their iPaper and embedding capabilities. They must continue to stay technologically
innovative branching out to all downloading platforms including the iPhone. The iPhone
application will bring them one step closer in piloting a product that is similar to Amazon’s Kindle
reader. This will enable them to decide if further research and development should be spent
towards creating a Kindle like product. They must also take much more precaution in protecting
the rights of their writers surrounding plagiarism and copyright issues. While new products,
publishers, technology, and users expand in numbers, Scribd must maintain the easy-to-use
website, clutter free atmosphere, and stay true to their belief in “A writer’s dream, a reader’s
paradise.”

Growth in publishing companies is inevitable, yet Scribd must find a healthy balance in
maintaining good relations with current publishers while increasing brand equity and awareness
by signing on the new. Scribd has everything it needs to create new revenue streams. With the
ability to create alliances with newspapers, more publishers, businesses, and educational
facilities revenue can be generated in establishing contracts and partnerships with all of these
categories around the world. With 50 million unique hits every month, Scribd is just beginning to
scratch the surfaces of their followings potential purchasing power. (Scribd, “About us” n.d.)
       Critical Success Factors                            Description                                     Mitigation

Generate alternative revenue streams         To enable sustainable growth                 Newspapers, businesses, and
                                             partnerships and alliances will create new   educational facilities are ready for Scribd
                                             revenue streams.                             to come knocking creating alternative
                                                                                          outlets for readers that is fast,
                                                                                          convenient, and affordable.

Establish relationships with more big time   Big time publisher growth is imperative in   Advertising pricing structure, ability for
publishers.                                  generating revenue and establishing new      real-time changes, and the integrity in
                                             customers.                                   displaying publishing will attract more
                                                                                          publishers.

Continue to be technology leaders in the      iPaper technology and embedding             With the making of an iPhone application,
industry                                     capabilities combined is what                Scribd will better understand how their
                                             differentiates Scribd from their             product compares with Amazon’s Kindle
                                             competitors.                                 reader. Advancements in iPaper
                                                                                          technology and embedding capabilities
                                                                                          will continue to set Scribd apart from the
                                                                                          pack.

Growth in brand equity and awareness         Brand equity and awareness attract           Continuous growth in brand image can be
                                             readers and writers alike.                   achieved through strong communication
                                                                                          of the service offerings and growth in
                                                                                          more established authors.

Maintain focus surrounding the “big idea”    With new technology, product offerings,      By maintaining an easy-to-use website,
during growth period                         and published work, Scribd needs to          and keeping clean and professional look
                                             channel in the direction of the company      with uncluttered pages, Scribd will display
                                             towards it vision of “A writers dream, a     their dedication to the written word.
                                             readers paradise.”

Table 6-2 Success Factors — Scribd


Conclusion
After reviewing and analyzing Scribd’s competitiveness within their market, we feel as though
Scribd has a viable reason to move forward. Scribd is the provider of the most advanced social
documentation distribution platform. (------------) Still, this is an important time for Scribd to gain as
much market share and awareness as possible. Their core competency will at some point
become an industry-shared technology, so Scribd must create a large consumer base while
focusing on adaptive and innovative ways to increase their current value offerings. As their
consumer volume grows, Scribd must follow their vision to promote their culture to create a loyal
following. The big idea was formed from their overall vision and represents the culture they serve.
Scribd needs to stay true to this vision in order for them to benefit from a following of consumers
that believe Scribd to be the best channel representing their desires and needs.

Scribd has entered a market that represents a large number of potential consumers. Through our
analysis the most attractive segment is the conscientious alternative reader that represents
35,785,516 of consumers with a monetary potential of $2,449,807,960. Many new entrants and
larger companies are trying to capture market share. These include Scribd’s current competitors
Amazon and Docstoc, along with the potential clash with high tech leaders Apple and Google.
(Hoovers, 2009) The advancement of new technologies and a focus on their target markets key
value drivers will keep Scribd ahead of these potential competitors. Scribd must work on creating
strong industry barriers to duffer further competition and provide them with further advantage to
their current competitors.

Scribd has built a presence over the Internet as a place where readers can buy books for a low
price and where authors can upload their written works to share with the public. (CrunchBase)
We believe the marketing plan should move forward as Scribd has set the foundation for an
already established customer base. This customer base is expanding rapidly as more people
learn of the type of service Scribd offers. The expanding customer base shows that Scribd will be
a reliable business for authors and readers. More companies will be inclined to work with Scribd
as they become aware of the fact that number of hits the website receives daily is growing each
month while current at 50 million unique visitors every month. (Scribd)

Scribd should also move forward because they offer a service that no other e-book retailer can
offer: a public website where anyone can upload written work. (YouNoodle, 2009) Scribd has
caught the eye of all authors because they give them an opportunity that no other book retailer
has ever given before. Although Docstoc allows authors to upload written books, authors are still
limited to only business and educational writings. Scribd, on the other hand, allows anyone to
upload everything, which gives them a competitive advantage in customer’s value perception.
Scribd offers something special to readers and authors.

The business model Scribd uses has allowed the company to provide authors and publishers with
the control over pricing awarding them with more formed partnerships. Currently major
partnerships with Simon and Schuster, Harvard, and others has boosted brand identity and
awareness as well as given Scribd free public relations and brand association. (Scribd) Scribd is
able to share a large percentage of profits with the author or publisher, which keeps the supply of
written work flowing in. Scribd is offering a better deal for authors than any other competitor and
still maintains a growing profit. The marketing plan should move forward because the relationship
that is built between Scribd, individual authors, and publishers will only get stronger as Scribd
continues to offer the best service available. Scribd is building relationships with publishers that
will secure future written works on their website. Authors that use the site will grow, which will
result in a larger readership for Scribd.

Scribd has proven they have the potential to enhance technology, increase readership, and
secure relationships with authors. This marketing plan should move forward as it becomes
evident that Scribd has all of the right tools to compete heavily with current and future
competitors. When new entrants move into the digital publication industry, Scribd will already
have a loyal customer base, unique technology, and a solid partnership base of authors and
publishers.
because they give them an opportunity that no other book retailer has ever given before.
Although Docstoc allows authors to upload written books, authors are still limited to only business
and educational writings. Scribd, on the other hand, allows anyone to upload anything, which
gives them a competitive advantage. Scribd offers something special to readers and authors.

The business model Scribd uses has allowed the company to set lower prices than any other
competititor in the industry. Scribd is able to share a large percentage of profits with the author or
publisher, which keeps the supply of written work flowing in. Scribd is offering a better deal for
authors than any other competitor and still maintains a growing profit. The marketing plan should
move forward because the relationship that is built between Scribd, individual authors, and
publishers will only get stronger as Scribd continues to offer the best service available. Scribd is
building relationships with publishers that will secure future written works on their website.
Authors that use the site will grow, which will result in a larger readership for Scribd.

Scribd has proven they have the potential to enhance technology, increase readership, and
secure relationships with authors. This marketing plan should move forward as it becomes
evident that Scribd has all of the right tools to compete heavily with current and future
competitors. When new entrants move into the digital publication industry, Scribd will already
have a loyal customer base, unique technology, and a solid partnership base of authors and
publishers.




                                                 51
Red Team/Blue Team

Taking out our competition: Amazon

 !       Continue to attract key publishers with a more beneficial partnership agreement
 !       Offer publishers 95 percent revenue share for no distribution through Amazon
 !       Always have the most innovative platform for file conversion and viewing potential
 !       Secure contracts with educational publishers to become the number one spot for universities and
         others to find books and related materials
 !       Send in head hunters to try to hire upper level executives to gain insight on Amazon’s short term
         strategy
 !       Produce own mobile reading device that is more user friendly and aesthetically attractive than the
         Kindle and offer it to consumers for free
 !       Partner with Google to become a more financially structured business and use this advantage to
         take them out
 !       Branch into or partner with Flicr to offer photo online storage for users and photographers
 !       Highly advertise in developing markets to build brand equity before Amazon or competitors
 !       Enhance cryptic technology and offer document storage and transfers for Government agencies
         around the world in exchange for future contract or business solutions
 !       With mobile units in place, get newspapers to join with high revenue share and flexibility for
         contracts that involve no distribution through Amazon
 !       Hack into sprint’s network and disrupt Internet capabilities
 !       Hack into Amazon’s network and disrupt website and transaction capabilities


Taking out our company: Scribd

     !     Run ads that highlight inefficiency of reading on-screen with Scribd (side by side with Kindle.
           “How do you want to read?”)
     !     Lower price of Kindle permanently or lower price significantly for a period of time. (make the
           Kindle $150 for 2 weeks to convert any potential consumers that want the Kindle, but don’t want
           to pay the upfront costs)
     !     Offer Kindle at zero up-front cost, but with a monthly subscription cost. (e.g. $15/month that can
           be put towards any book purchases)
     !     Recruit and hire the lead engineers from Scribd.
     !     Develop an inline flash-based reader for all Kindle books.
     !     Build a duplicate site like Scribd. Offer 100% of revenue to publishers and use in-site advertising
           to offset operating costs.
     !     Increase the payment to publishers for electronic documents to nothing lower than an 85%
           revenue share with publishers, we currently offer a 35% share of prices we set.
     !     Allow customers to name the price at which their works will sell, we don’t currently.
     !     Establish a rule that publishers either publish electronically and traditionally through Amazon, or
           not at all. All or nothing.
     !     FINALLY launch the Kindle worldwide with support for all countries.
     !     Acquire DocStoc and use their existing tech and engineers to decrease other competition and
           integrate their technology.
     !     Setup a free section where users who don’t care to create revenue can upload their works for
           sharing.
     !     Ban Scribd from utilizing the Amazon S3 cloud storage service that we offer. This effectively
           forces them to pay higher rates for storage that is expanding monthly.
Market Leadership

This section will look at the market leadership model consisting of five different metrics. The
model looks to differentiate a company’s position in the industry, making them difficult to replicate
by competitors. A company must excel in all areas to be successful player among the
competition, yet specialize in specific metrics in order to differentiate the value being created. The
Scribd team will evaluate the core competencies that contribute to each attribute positioning the
company in the most effective manner. The five metrics include:
        1. Knowledge – This multidimensional metric can focus on knowledge within the
            company between employees, and knowledge shared and co-created with
            customers. The development of sharing of knowledge increases value in your
            product or service.
        2. Innovation – This metric devotes a commitment to R & D in creating new markets and
            technology. Innovation is developed in three different ways including Demand Pull
            where marketers encourage engineers to create products tailored towards high
            opportunity market, Technology Push, where engineers create technological
            breakthroughs that have potential in the market, and Integrated Approach, where
            engineers and marketers co-create technology with the market in mind. The
            innovation metric increases customer value by enhancing the products, processes,
            and people.
        3. Time – This metric creates value by keeping in mind that the element of time is a
            product attribute. By creating the most efficient systems, a company can strengthen
            value-in-use. In cutting down delivery processes it will ultimately decrease cost and
            increase benefits by giving back the customer their time. Speed is a vital
            characteristic of time that can create opportunity maximization.
        4. Customer Intimacy – In this category intangible benefits play a large role in creating
            value. It also aims to incorporate the customization of unique individual customers,
            and allowing them to participate in determining what is valuable in the end product.
            A heavy emphasis is put onto a company being able to “sense and respond,” making
            proactive decisions and leading the industry in customer service.
        5. Operational Excellence – This metric focuses on the people within the company as
            the core assets. Every operation is team based and value is created by tapping into
            new markets with existing assets. At the same time, companies must continually
            enhance product designs, materials, and processes to achieve the most efficient
            overall cost (Harmon, Lecture Five, 2009).
This Radar Chart demonstrates the key metrics that Scribd will focus on in differentiating
themselves from competitors. It also illustrates the utilization of core competencies in Innovation
and Customer Intimacy, enabling enhanced value in the overall Scribd service.




Figure 7-10 Scribd Radar Chart
Source: Harmon, Lecture 5, 2009
Source: Scribd Team Consensus

Scribd possesses well-rounded attributes in meeting the needs of each dimension of the Radar
Chart. Yet they have really pushed the envelope in terms of product and service innovation.
Their ability to bring innovative value driven products to existing and new markets is what truly
differentiates them from competitors. The introduction of iPaper technology set their foot through
the door to compete with a company like Amazon, and the introduction of their service concept in
tune with the needs of consumers is what sets them apart. The Scribd marketing team has
worked alongside engineers to develop technology and services that cater to the needs of the
market, in achieving integrated innovation (Harmon, Lecture Five, 2009). The potential for
expanding into global markets, and the addition of audio and video embedding capabilities on the
newly co-branded Scribd reader will reinvent the industry. The addition of instant translation in
hundreds of languages will bring them one step closer to creating foreign media publication
alliances. With a deeper understanding of their audience, the co-creation of value-in-use with
Scribd consumers, and a service that incorporates a small piece of each competitor, Scribd’s
innovation process is performing on an enhanced, blue ocean driven scale.

Another strong performance metric is Scribd’s Customer Intimacy. The reason they are able to
excel in this category in comparison with competitors is because they truly allow their customers
to participate in the value creation process. Scribd audiences are not just individuals consuming
a service instead they are the service. They are the readers, the writers, the social network, and
the voice behind what Scribd has become, and where they would like it to go. If Harvard
University wants to digitize 1,000 books on the Scribd website, then they can. They will become
a part of the value creating process and begin their own social network of users, and make
changes whenever they would like. Scribd’s ability to sense and respond is spot on, and they
are merely a facilitator of Scribd users, specializing in customer service (Harmon, Lecture Five,
2009).
Pricing Plan



Pricing Objectives



The table below establishes the pricing dynamic of Scribd in their market by
identifying key performance indicators. This table will help determine the
pricing plan objectives, as well as select a pricing method.


Penetration          Market Situation                 Skimming

Low                  Level of Desire For The          High
                     Product/Service
Substitutes          Distinctiveness From             Distinctive
                     Competitive Offerings
High                 Importance of Price In the       Low
                     Value Equation
Easy                 Ease of Duplicating The          Difficult
                     Competitive Advantage
Gradual              Speed of return on Investment    Fast

Low                  Importance of Innovation         High

Low                  Importance of Personal Selling   High



Table 7.5-1 Pricing Dynamics

(Harmon, 2009)



Level of Desire for the Product/Service

Cloud computing and social publishing networks have become very
competitive markets, and many people are looking for a place to store and
publish their work. Scribd has the worlds largest readership for a social
publishing networks with around 60 million readers each month.
(Scribd.com, 2009)



Distinctiveness from Competitive Offerings

Scribd’s innovative technology is distinctive from its competitors, but their
offerings are similar to many of their competitors. This is why Scribd fits
under both categories of substitutes and distinctive. Although Scribd has
industry leading technology, it is easy for competitors to convert their
software to compete. Scribd has been named in the top fifty best
technology startups by Business Week and Younoodle; due to their
distinctive publisher partnerships and rapid growth. (Ricadela, 2009 )



Importance of Price in the Value Equation

Being a web-based company means that the consumers have Scribd’s
competitors prices at their fingertips. Amazon in particular has extremely
competitive prices on e-books. Although Scribd may not be the low price
leader, they are helping writers and publishers cash in. Many displaced
authors or journalists are turning to make profit is Scribed, which “invites
journalists to publish their work, reach new audiences and potentially profit
from stories that cash-strapped news organizations might not have the
resources to publish”. (Tenor, 2009)



Ease of Duplicating the Competitive Advantage

New and improved technology is constantly being innovated. Advanced
technology such as iPaper, and enhanced embedding capabilities is what
currently gives Scribd a competitive advantage. The competitive
advantage which will be hard for competitors to duplicate is Scribds unique
partnerships with publishers. Simon and Schuster will offer 5,000 e-titles
through Scribd. (Rothman, 2009)
Speed of return on Investment

Scribd is able to profit from both publication sales and marketing, and
receives payment upon each purchase. Scribd is also able to outperform
their competitors by sending the sellers of publications emails and up to
date sales reports every time they sell a product, unlike their competitor
which often produce reports every 6 weeks. (Savikas, 2009)



Importance of Innovation

To keep their competitive advantage, Scribd must constantly have industry
leading technology. Scribd is constantly looking for ways to solve consumer
problems through continuous innovation. One way they do this is ensuring
protection to writers by sending all salable content though a copyright
verification system. (Slattery, 2009) Scribd believes in liberating the written
word though technology “At Scribd, we built a technology that’s broken
barriers to traditional publishing and in the process also built one of the
largest readerships in the world”. (Scribd.com, 2009)



Importance of Personal Selling

Scribd is a social publishing network, which is what differentiates them from
many of their large competitors. Scribd truly believes in making their
service a personal experience, they have created a place where everyone
can be a part of the publishing experience. Scribd is constantly updating
their website interface to ensure ease of use and quality. “These are the
first of many improvements that are designed to make it easier for Scribd
users to create communities around works they love and to communicate
to their readers and friends.” (Scribed.com 2009)
The key pricing indicators (KPI’s) help evaluate the market situation, and
evaluate the best pricing strategy. They have showed Scribds
differentiation in the market as well the importance of innovation, personal
selling, and price. The KPI’s above show that the pricing dynamic leans
towards skim pricing.




Pricing Strategy



Value-Based Pricing Model

Due to the importance of customer intimacy in Scribds business structure,
we thought a value-based pricing structure is recommended for Scribd.
The value-based pricing structure is based on the customers perceived
value of the product or service .This pricings structure facilitates building
CRM with the consumer, as well as the lifetime value of the customer.



Perceived Value

Perceived value is part of a value-based pricing, in which the value the
exchange for it or payment. (Harmon, 2009) Currently Scribd is charging a
premium price for some of the publications, this is because they let the
author choose the price, and give the copyright owner 80 percent of the
selling price. This pricing freedom has caused many writers and publisher
to charge more for the materials, compared to Amazon. Scribd also offers
a second option for pricing called automatic pricing. With automatic pricing
the author can use Scribd’s algorithm program to determine the “best price”
for the document. With either offer the minimum charge is one dollar.
(Scribd.com, 2009)



Skimming
Skim pricing is part of a market-based pricing strategy. In order to have
market-based pricing strategy, a business must focus on competitors as
well as customers. (Best, 2009) This includes a broad understanding of
the customer’s needs, and the ability to produce a product that meets those
needs especially the needs not being meet by competitors.



Value-Based – Hybrid Pricing



Hybrid is a combination of both skim and penetration pricing, where the
goal is to gain a margin above recovering the total cost. Another important
aspect of a hybrid plan is that there is a concentration of second market
discounting, which maintains a premium price or skim the gained market,
while discounting for new entrants. To successfully gain market share In
this competitive industry, Scribd has to find a way to reach out to new
users. This pricing structure is customer centric based, as well and
financial goal oriented.




The table below illustrates the correspondence between perceived value
and potential price levels. This table helps explain the current pricing
strategy, and plan for future pricing strategies.

                     Premium              Equal             Sub Par


                        A or B             C or D              D or E
    Grow
                           B                   C                C or D
      Hold

                           B                C or D              D or E
      Milk
Key
A     Stong premium price
B     Premium Price
C     Price Equal to the competition
D     Moderate discount necessary
E     Deep discount needed


Table 7.5-2 Perceived Value (Harmon, 2009)

Customer Reactions

Scribd seems to be getting a good reaction from customers, although they
don’t generally compete with Amazon, when it comes to best-seller prices,
scribd often is viewed as generally inexpensive. Customer are happy with
the content and reading experience which gives Scribd a high perceived
value, which in return translates in the a higher willingness of the consumer
to purchase.

Competitor Reactions

competitor reactions from Scribds main competitors is relatively low.
Amazon is a large enough company that they are not extremely concerned
with startups such as scribed. Amazon deals in volume, and has enough
market share that they can price accordingly. Amazon is able to take a
small hit on best-sellers, to promote their low-cost price structure.



Breakeven Analysis
                                                                                                                                                                                    2009
                                                                                                                                                                                                                                                                                                                                                        2010                                                                                                                                                         2011
                                                    %!of!    3!yr!budget            Jan             Feb            Mar              Apr            May!            June             July!          Aug             Sept             Oct            Nov              Dec             2009!            Q1"Q4                   Q1                        Q2                         Q3                           Q4                          Q1"Q4                            Q1                          Q2                           Q3                           Q4
                                                   Budge                                                                                                                                                                                                                           Totals
                                                     t

               Scribds!P&L!Statement
Gross!Sales!"!Scribd                                                                                                                                                                                                                                                                 !                          !                           !                          !                           !                            !                          !                          !                           !
                                                            $!!483,178,913 $!!7,070,000 $!!7,181,706 $!!7,295,177 $!!7,410,441 $!!7,527,526 $!!7,646,461 $!!7,767,275 $!!7,889,998 $!!8,014,660 $!!8,141,291 $!!8,269,924 $!!8,400,588 $!!92,615,045 $!!181,037,931 $!!!!!!!!!!!!!!!42,002,942 $!!!!!!!!!!!!!!44,103,089 $!!!!!!!!!!!!!!!46,308,244 $!!!!!!!!!!!!!!!48,623,656 $!!!!!!!!!!!!!!!!209,525,937 $!!!!!!!!!!!!!!!50,082,366 $!!!!!!!!!!!!!!51,584,836 $!!!!!!!!!!!!!!53,132,382 $!!!!!!!!!!!!!!!54,726,353
   COGS                                                                                                                                                                                                                                                                              !                                                                                                             !
                                                            $!!386,543,130 $!!5,656,000 $!!5,745,365 $!!5,836,142 $!!5,928,353 $!!6,022,021 $!!6,117,168 $!!6,213,820 $!!6,311,998 $!!6,411,728 $!!6,513,033 $!!6,615,939 $!!6,720,471 $!!74,092,036 $!!144,830,345 $!!!!!!!!!!!!!!!33,602,354 $!!!!!!!!!!!!!!!35,282,471 $!!!!!!!!!!!!!!!!37,046,595 $!!!!!!!!!!!!!!!!38,898,925 $!!!!!!!!!!!!!!!!167,620,749 $!!!!!!!!!!!!!!!!40,065,892 $!!!!!!!!!!!!!!!41,267,869 $!!!!!!!!!!!!!!!42,505,905 $!!!!!!!!!!!!!!!!43,781,082
Gross!Income                                                     96,635,783 $!!
                                                            $!!!!!                         1            1            1
                                                                              1,414,000 $!! ,436,341 $!! ,459,035 $!! ,482,088 $!!1,505,505 $!!1,529,292 $!!             1            1
                                                                                                                                                            1,553,455 $!! ,578,000 $!! ,602,932 $!!1,628,258 $!!1,653,985 $!!1,680,118 $!!18,523,009 $!!!!! 6,207,586 $!!!!!!!!!!!!!!!!! ,400,588 $!!!!!!!!!!!!!!!!!
                                                                                                                                                                                                                                                          3                            8
                                                                                                                                                                                                                                                                                       !                                                      !
                                                                                                                                                                                                                                                                                                                   8,820,618 $!!!!!!!!!!!!!!!!!                          9,724,731 $!!!!!!!!!!!!!!!!!!41,905,187 $!!!!!!!!!!!!!!!!
                                                                                                                                                                                                                                                                                                                                                                         !
                                                                                                                                                                                                                                                                                                                                              9,261,649 $!!!!!!!!!!!!!!!!!                           !                          10,016,473 $!!!!!!!!!!!!!!!10,316,967 $!!!!!!!!!!!!!!!10,626,476 $!!!!!!!!!!!!!!!!10,945,271
                 Operating!Expenses

      R&D                                                        56,320,237 $!!!!!!707,000 $!!!!!!718,171 $!!!!!!729,518 $!!!!!!741,044 $!!!!!!752,753 $!!!!!!764,646 $!!!!!!776,727 $!!!!!!789,000 $!!!!!801,466 $!!!!!!814,129 $!!!!!!826,992 $!!!!!!840,059 $!!13,892,257 $!!!!!
                                                            $!!!!!                                                                                                                                        !                                                                                                   !                          !                           !                           !                            !                             !                          !                          !                           !
                                                                                                                                                                                                                                                                                  16,427,981 $!!!!!!!!!!!!!!!!!3,360,235 $!!!!!!!!!!!!!!!!3,528,247 $!!!!!!!!!!!!!!!!!3,704,659 $!!!!!!!!!!!!!!!!!5,834,839 $!!!!!!!!!!!!!!!!!!26,000,000 $!!!!!!!!!!!!!!!!!8,000,000 $!!!!!!!!!!!!!!!!8,000,000 $!!!!!!!!!!!!!!!!5,000,000 $!!!!!!!!!!!!!!!!!5,000,000
      SG&A                                                       33,618,450 $!!!!!301,163 $!!!!!301,163 $!!!!!301,163 $!!!!!301,163 $!!!!!301,163 $!!!!!301,163 $!!!!!301,163 $!!!!!301,163 $!!!!301,163 $!!!!!301,163 $!!!!!301,163 $!!!!!301,163 $!!!!3,613,960 $!!!!!!!9,051,897 $!!!!!!!!!!!!!!!!! ,100,147 $!!!!!!!!!!!!!!!!2,205,154 $!!!!!!!!!!!!!!!!!
                                                            $!!!!!                                                                                                                                       !                                                                                                     !
                                                                                                                                                                                                                                                                                                               2                          !                           2,315,412 $!!!!!!!!!!!!!!!!!
                                                                                                                                                                                                                                                                                                                                                                      !                           2,431,183 $!!!!!!!!!!!!!!!!!!20,952,594 $!!!!!!!!!!!!!!!!!
                                                                                                                                                                                                                                                                                                                                                                                                  !                           !                             !5,008,237 $!!!!!!!!!!!!!!!!5,158,484 $!!!!!!!!!!!!!!!!5,313,238 $!!!!!!!!!!!!!!!!!
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        !                          !                          5,472,635
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              !
Total!Operating!Expenses                                         85,307,935 $!!
                                                            $!!!!!                           1              1              1
                                                                              1,008,163 $!! ,019,334 $!! ,030,681 $!! ,042,207 $!!        1,053,916 $!!  1,065,809 $!!                 1              1
                                                                                                                                                                        1,077,891 $!! ,090,163 $!! ,102,629 $!!     1,115,292 $!!  1,128,156 $!!  1,141,222 $!!12,875,465 $!!!!! 5,479,877 $!!!!!!!!!!!!!!!!! ,460,382 $!!!!!!!!!!!!!!!!5,733,402 $!!!!!!!!!!!!!!!!!
                                                                                                                                                                                                                                                                                  2                            !
                                                                                                                                                                                                                                                                                                               5                          !                           6,020,072 $!!!!!!!!!!!!!!!!!
                                                                                                                                                                                                                                                                                                                                                                      !                           8,266,021 $!!!!!!!!!!!!!!!!!!46,952,594 $!!!!!!!!!!!!!!!!
                                                                                                                                                                                                                                                                                                                                                                                                  !                           !                          13,008,237 $!!!!!!!!!!!!!!! 13,158,484 $!!!!!!!!!!!!!!!10,313,238 $!!!!!!!!!!!!!!!!10,472,635

Earnings!Before!Taxes                                            11,327,847
                                                            $!!!!!              $!!!!!405,837   $!!!!!417,007   $!!!!!428,354   $!!!!!439,881   $!!!!!451,589   $!!!!!463,483   $!!!!!475,564   $!!!!!487,836        !
                                                                                                                                                                                                                $!!!!500,303   $!!!!!512,966   $!!!!!525,829   $!!!!!538,896                       1                              !
                                                                                                                                                                                                                                                                                                                                  2
                                                                                                                                                                                                                                                                               $!!!!5,647,545 $!!!!! 0,727,709 $!!!!!!!!!!!!!!!!! ,940,206 $!!!!!!!!!!!!!!!!3,087,216
                                                                                                                                                                                                                                                                                                                                                            !           $!!!!!!!!!!!!!!!!!
                                                                                                                                                                                                                                                                                                                                                                                         3,241,577
                                                                                                                                                                                                                                                                                                                                                                                         !                            1,458,710 $!!!!!!!!!!!!!!!!!!!(5,047,406) $!!!!!!!!!!!!!!!!(2,991,763) $!!!!!!!!!!!!!!!(2,841,516) $!!!!!!!!!!!!!!!!!!!313,238
                                                                                                                                                                                                                                                                                                                                                                                                     $!!!!!!!!!!!!!!!!!
                                                                                                                                                                                                                                                                                                                                                                                                                      !                            !                                                                                        !          $!!!!!!!!!!!!!!!!!!!!472,635
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           !
!!!!!!!!!!!Taxes                                            $!!!!!!!3,851,468                                                                                                                                                                                                   1,920,165     $!!!!!!!3,647,421           999,670                 1,049,654                     1,102,136                      495,961          $!!!!!!!!!!!!!!!!!!!(1,716,118)
                                                                                                                                                                                                                                                                                                                                                                                                                                                   !                   "1,017,200                    "966,116                     106,501                       160,696
Capital!Funding!Sceries!B                                                         3,000,000
                                                                                $!!                                                                                                                                                                                                                                            15,000,000
                                                                                                                                                                                                                                                                                                                $!!!!!!!!!!!!!!!!
Capital!Funding!Sceries!C
Net!Income                                                       27,396,544 $!!3,405,837 $!!!!!! 17,007 $!!!!!! 28,354 $!!!!!!
                                                            $!!!!!                             4              4              439,881 $!!!!!!
                                                                                                                                           451,589 $!!!!!!
                                                                                                                                                         463,483 $!!!!!!             4              !             512,966 $!!!!!!
                                                                                                                                                                       475,564 $!!!!!! 87,836 $!!!!!500,303 $!!!!!!             525,829 $!!!!!!
                                                                                                                                                                                                                                              538,896 $!!!!! ,727,379 $!!!!! 8,432,867 $!!!!!!!!!!!!!!!! 6,940,536 $!!!!!!!!!!!!!!!!2,037,563 $!!!!!!!!!!!!!!!!!2,139,441 $!!!!!!!!!!!!!!!!!!!!!
                                                                                                                                                                                                                                                           6               1                           1                           !                           !                               962,748 $!!!!!!!!!!!!!!!!!!!(3,331,288) $!!!!!!!!!!!!!!!!(1,974,564) $!!!!!!!!!!!!!!!!
                                                                                                                                                                                                                                                                                                                                                                                               !                          !                             !                                                           206,737 $!!!!!!!!!!!!!!!!!!!!!
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    (1,875,401) $!!!!!!!!!!!!!!!!!!!!
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    !                            311,939
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 !




Assumptions
34%!tax!rates
42%!gross!margins
12%!R&D!expense!of!net!sales
Prelaunch!R&D!expense!is!also!12%!of!total!sales
Initial!Capital!Funding:!$12.8!Million
Seires!C!Funding!15.5!Million
                                  Total!Marketing!Communication!
                              3!yr!budget                 2009!                  Q1"Q4                   Q1"Q4
                                                         Totals
Forecasted!Yearly!Sales!   $!!!!!483,178,913 $!!!!!!!!! 92,615,045 $!!!!!!!!181,037,931 $!!!!!! 209,525,937
   SG&A                    $!!!!!!!33,618,450 $!!!!!!!!!!! 3,613,960 $!!!!!!!!!!!!!9,051,897 $!!!!!!!! 20,952,594
       SGA!%                          7%                    4%                       5%                    10%
   Marcom!Budget!!         $!!!!!!!!! 2,290,000 $!!!!!!!!!!!!!! 803,000 $!!!!!!!!!!!!!1,900,000 $!!!!!!!!!!! 4,200,000
       Marcom!Budget!!%             0.5%                  0.9%                     1.0%                   2.0%
Exhibit X Total Marketing Communication Budget
Schedule and Timeline 2010                    Jan   Feb   Mar   Apr   May   June July   Aug   Sept Oct   Nov   Dec
PROMOTIONS
   50% purchase of one book
   25% purchase of one book
   Scribd gift card with purchase of one book
ADVERTISING
Magazines
   Living Green Magazine
   Rolling Stone
   National Geographic
   Blender
   Bicycling
Newspapers
   New York Times
   New York Daily News
   Wall Street Journal
Internet
   US News
   Bicycling
   Google.com
   Terra.com
   Greenlivingmag.com
TOTAL COST: $700,000
Schedule and Timeline 2011                    Jan   Feb   Mar   Apr   May   June July   Aug   Sept Oct   Nov   Dec
PROMOTIONS
   50% purchase of one book
   25% purchase of one book
   Scribd gift card with purchase of one book
ADVERTISING
Magazines
   Living Green Magazine
   Rolling Stone
   National Geographic
   Blender
   Bicycling
Newspapers
   New York Times
   New York Daily News
   Wall Street Journal
Internet
   US News
   Bicycling
   Google.com
   Terra.com
   Greenlivingmag.com
TOTAL COST: $700,000
Project!Plan!                                                                               2011
Scribd!Reader!Pre"launch!Timeline!                    August!           September!         October             November           December
                                                  1    2      3   4   1    2    3    4   1   2     3   4   1      2   3   4   1      2   3   4
PRODUCT!TIMELINE
 Product!Development!Completion!
 Product!Packaging
 Product!Testing!A
 Product!Testing!B
 User!Manual!
 Manufacturing!Ramp
 Product!In!Stores!

Marketing!Timeline
 Scribd!Reader!Announcement!
 Marketing!Strategy!Development!
 Marcomm!Plan
 Advertizing!Plan!
 Website!Plan!
 SEM/SEO!Plan!

Marcomm!Development!
     In"Store!Displays!Development!
     Website!Development!
     In!Store!Launch!SOP!Developed!

   Sales!Training!
   Customer!Support!Developed!
   Scribes!Cash!Cards!Infrastructure!Completed!
   Online!Registration!Goes!Live!
   Scribed!Reader!Launched!
   Online!Ordering!Goes!Live!
   Press!Release!And!Launch!Party!
Project!Plan!                                                                       2012
Scribd!Reader!Post"Launch!Timeline!           January!          February!           March             April             May
                                            1   2     3   4   1   2     3   4   1    2    3   4   1   2     3   4   1   2   3   4
Marketing!Activities!And!Metrics!Tracing!
  Marketing!Research!
  Competitive!Analysis!
  Brand!Awareness!
  Brand!Preference!Survey
  Customer!Satisfaction
  Product!Return!Rate!
  Advertizing!Effectiveness
  Product!Availability!

 Financial!Performance!Monitoring!
   Marketing!Budget!
   Sales!Revenue
   Gross!Margin!
   Net!Profit!
                                 Trip Adler
                              CEO & Co-Founder




     Jared Friedman            Tikhon Bernstam,
                                                                                George Consagra
    CTO & Co-Founder          COO & Co-Founder
                                                                                   President




                                          Tammy H. Nam, Vice                          Mike McGuinness, Vice
         Engineer                         President, Content &                         President, Business
                                               Marketing                                   Development



 Michael Watts,
Software Engineer                            Michelle Laird,                               Jack Leidlein
                       Jason Bentley,
                                                Director,             James Yu           Senior Director of
                        Official Rep
                                            Communications          Web Developer         Operations at
                                                                                              Scribd
    Engineer
                                                                                             Financial
                                                                                            Accounting
                                                                 Web Designer

Dmytro Shteflyuk
  Employee                                                                               In-House Recruiter
                                                                 Web Designer

    Engineer

                                                                 Web Designer

    Engineer



 Earl Hathaway,
Data and Analytics
    Engineer
                                                    Scribd Cost of Storage

                                                  .15 per every Gigabyte Stored

                                                  1,440 Gigabyte Stored Per Year

                                               Average Storage expenditure Per Year
                                                        Year One $2592
                                                        Year Two $5,184
                                                       Year Three $7,776




         Scribd Cost for Uploads                                                              Scribd Cost of Downloads
.10 per every Gigabyte Uploaded                                                       .17 per every Gigabyte Downloaded

18 Million Files Uploaded Per Year                                                    Average Download per File 1,000

12,500 Total Documents per Gigabyte Uploaded                                          Yearly .08 Gigabyte are Required to Download a
                                                                                      Single Files 1,000x
1,440 Gigabyte Uploaded Per Year
                                                                                      14,400,000 Gigabyte Per Year Downloaded
    Average Upload expenditure
              $1728.00 Per Year                                                          Average Upload expenditure
                                                                                                  $244,800.00 Per Year

				
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