1. XEROX: BOOK-IN-TIME
MBAM 619: Strategy
February 6, 2008
Sarah Gay, Gaurav Gupta, Samir Mohan,
Sandro Olivieri

2. PEST: P & E
Political:
Federal government appeared likely to increase
funding for libraries and the arts.
Economic:
US economy was beginning to recover during the
mid 1990’s

3. PEST: S & T
Social:
Higher enrollment levels in schools and colleges.
Concerns about the aging U.S. population.
Technology:
Rapid changes in office technology.
The printing process is becoming more automated and computer
controlled.

4. PEST ANALYSIS
Potential Impact Opportunity or Strategic
Nature of Change
of Change Threat Response
Opportunity:
Federal government appeared Libraries will be
Increased need to Explore discounts for
Political likely to increase funding for looking to increase their
publish new and old federal institutions.
libraries and the arts. book reserves
manuscripts.
Increased consumer
Economy is recovering from Opportunity: Increase
Economic and government
the recession of the 1980’s in retail spending.
spending.
-Higher enrollment levels in
Increase in medical and Opportunity: Increase Make it possible to
universities.
Social health-care related titles in demand for print short runs of
- Concerns about the aging
and textbooks. specialty titles. specialty titles.
population
Threat from IBM and Partner with retailers
Increased electronic
Technology Increased technology other companies to do and market the lower
publishing.
small run printing. cost BIT printers.

5. PUBLISHING INDUSTRY
VALUE CHAIN
Papers, printing presses,
ink, manuscripts
Publishers
Wholesalers
Retailers
Customers

6. PUBLISHING INDUSTRY
CHANGES
Publishing industry is moving from a literary focus to a profit focus.
The printing process is becoming more automated and computer
controlled.
The book market is growing at 5% a year.

7. PUBLISHING INDUSTRY
VALUE CHAIN
5%
Profit
Value
Added
2% Profit
Value
Added
5%
Profit
Publishers COGS
•20% manufacturing costs
Value
•20% covered royalties, rights, etc.
•30% covered sales and marketing Added
•25% covered book return costs
Publishers Wholesalers Retailers Customers

8. VALUE CHAIN: VERSION 1
Major Expenses for Publishers
•$3.08 = manufacturing costs
•$3.08 = author royalties, rights, etc. 5% $25.00
$1.25
•$4.62 = sales and marketing
•$3.85 = book return costs $6.00
2% $0.35
$2.00
5% $0.77
$14.63
Publishers Wholesalers Retailers Customers
$25 BOOK W/ WHOLESALER

9. VALUE CHAIN: VERSION 2
Major Expenses for Publishers
•$3.32 = manufacturing costs
•$3.32 = author royalties, rights, etc.
•$4.98 = sales and marketing
$25.00
•$4.15 = book return costs 5% $1.25
$7.15
5% $0.83
$15.77
Publishers Retailers Customers
$25 BOOK WITH NO WHOLESALER

10. BOOK-IN-TIME
PRINTING
Target Audience for BIT printing: Anyone looking to print less than 1200
copies of a “book” (book may include training manual, instruction book,
out of print manuscript, etc.)
Pitch: Earn profit on books that were previously too expensive to bring to
market on a per unit basis.
Sell products that are out of print at a cost of $6.90 a unit.
Over 1,000,000 titles go out of print every year in the United States.
Worldwide, over 20,000,000 titles a year go out of print because of low
demand.
No need for shelf space - print as you need it.

11. XEROX B-I-T POTENTIAL
BUYERS
The new Book‐On‐Demand market will s5ll need an
intermediary to handle the digital manuscripts and shop them
to the owners of the Book‐In‐Time prin5ng equipment. The
intermediary could be:
The publishers themselves
Poten5ally, a rise of independent authors shopping their
manuscripts directly to Amazon.com through an iTunes model of
independent distribu5on

12. THE NEXT STEP:
PRINTING
• FedexKinko’s and other office supply stores
• Upon purchase of content through Amazon or another e-tailer, option to
print at local office shop
• Boutique printing houses
• Small run zines, programs, pamphlets
• Major retailers – Barnes & Noble, Borders…
• BIT installations at the distribution centers could still ensure a 24 to 48-
hour turnaround.
• Major and Mid-Sized corporations
• Printing of training materials, advertisements, and other materials office

13. VALUE CHAIN: AMAZON
Major Expenses for Publishers
•$3.08 = manufacturing costs
•$3.08 = covered royalties, rights, etc.
5% $20.00
•$4.62 = covered sales and marketing $1.00
•$0.31 = covered book return costs
$2.00
(now only 2%)
2% $0.34
$2.00
5% $0.73
$13.93
Publishers Wholesalers Amazon Customers