Rafael Gill
Josiana Decarvalho
Sean Clement
June 16, 2011
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The CourseSmart catalog includes over 90% of the core textbooks in use
today in North American Higher Education as eTextbooks, as well as the largest
online catalog of eResources and digital course materials available for instant
access. CourseSmart is a venture supported by the leading publishers in North
American higher education. Founded in 2007, CourseSmart provides eTextbooks
and digital learning tools to millions of student and faculty users.
Vision: CourseSmart is determined not only to stay as #1 in the eTextbook
market, but also to continue to innovate and improve its services, by adding and
partnering up with more publishers in order to make their catalog more extensive.
CourseSmart is committed to provide the best service of digital textbooks and
course materials at a cheaper price and the best convenience to all users.
Generic Strategies
There are different ways to determine a firm’s profitability, one of them
could be the attractiveness of the industry in which it operates, and however a really
important way to identify a firm’s profitability is finding out its position within that
industry. Although some industries are more competitive than others, and some
could have below or above average profitability, a firm that is adequately positioned
can generate higher returns.
The best way for a firm to position itself is doing a balance of their strengths,
Michael Porter states a firms strength’s falls into one of two terms: cost advantage
and cost differentiation. These Strengths can be applied either in a narrow or broad
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scope; as a result there are three generic strategies: cost leadership, differentiation,
and focus.
Based on an analysis of the market, competitors, and determinant factors we
decided that the most coherent strategy for coursesmart it is the low cost leadership
strategy. Focused on coursesmart’s internal capabilities they are able to offer in
most cases the same products as competitor at a lower price, because they are able
of being cost effective, one of the important reasons is that they have a small team,
which although is formed by not more than 20 people is able to offer the same
services and products than its competition. However coursesmart external
capabilities are limited, since they possess a small team and limited funds they are
not able to adapt and react to change as quickly as other bigger wealthier
companies. Therefore we decided to classify coursesmart as a company, which uses
the cost leadership strategy.
Cost Leadership:
Cost leadership is a strategic position that enables a firm to produce goods or
offer a service while at the same time maintaining total costs lower than what it
takes competitors to offer the same service or product is known as low-cost
leadership. For obvious reasons if a firm is able to produce and sell products at a
lower price than its competitor it earns a competitive advantage.
Coursesmart is able to offer the same books as many competitors at a lower
price; mainly because of the partnerships and agreements they hold with most of
the major publishers. In fact they are able to offer more than 90 percent of North
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American textbooks in digital form at a considerably lower price than its
competitors. The reason why they are able to do so is because of they posses great
internal capabilities they are able of offering this great service having a small
management team and less than 20 employees, which lead them to being very cost
effective. Therefore consumers will be able to identify Coursesmart as a price savvy
company, which will not only save them a lot of money, but also offer them the
highest amount of content in the market.
Scope of Arenas:
After firms decide how broadly and in which manner they will compete for
customers, firms also need to make choices about the number and breadth of arenas
in which the will compete. Therefore companies need to decide whether they will
compete broadly or if they prefer to enter a narrow and specific segment.
Four generic strategies positions result by the decision made by a company:
low-cost leadership, broad differentiation, focused cost leadership, and focused
differentiation. Since we decided coursesmart uses the cost leadership strategy now
we have to select between low-cost leadership and focused cost leadership. Low
cost leadership happens when a firm decides to compete in a broad market; in the ebooks market case, it would represent a firm competing in the mass market
providing educational books, novels, enhanced books, etc. in the other hand focused
cost strategy represents when a firm based on its internal and external capabilities,
decides to focus on a specific (niche) market. Coursesmart is a company focused
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only in the educational e-books market; therefore it would be categorized as a focus
cost leadership company.
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Charting/Value Curve
Coursesmart
E-Readers
Print Books
The Value Curve is a useful tool that managers and marketers use to compare and
position products and services across industries. Coursesmart value curve is based on
the factors of accessibility, value, price, ease of use, experience, publisher
relationship, and content. We compared Coursesmart with E-Readers and print
books and each competitor corresponds to the category according to how it
competes in the industry.
The first category we focused on was accessibility. Coursesmart has the
highest points because it can be accessed anytime, anywhere from any computer or
device that has Internet. The devices include iPad, iPhones and Android smart
phones. Coursesmart is very easy to access on the iPad as long you have access to
Internet the user can read and view the content material anytime. The next factor
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we considered was value and e-Readers have more value than Coursesmart because
the content offered on e-Readers is not only online as in Coursesmart. The content
can be stored on the device and accessed anytime, which makes the product
valuable and not necessarily the content. As far as price print books are much more
expensive than purchasing e-books on Courcesmart. The e-books offered on
Courcesmart are as low as three times the print version because Coursesmart has
partnerships with the leading textbooks publisher such as Pearson, Cengage
Learning, McGraw-Hill Education and John Wiley & Sons.
Courcesmart is just as easy to use as print books but with better
accommodations. The text on Courcesmart appears as they would in the print
version. It is just as easy to read the content and you may highlight and write notes
just as you would on the book. Like the books, the graphics on Courcesmart are in
color and you can resize them for better visual. The Graphics on the e-readers are
not very good because they its in black and white and sometimes hard to see.
Coursesmart takes those who are disabled in consideration
As long as you know how to use a computer, you will be able to manage and
navigate Courcesmart.
Coursesmart has the highest publisher relationship because of its affiliation
with all the leading publishers. Since e-Reader has no partnerships with publishers
they sometimes try to sell books for a better price. Coursesmart is the highest in
content because the publishers provide a variety range of content and e-Readers do
not have a diversity of textbooks as Courcesmart. Based on experience Coursesmart
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has the lowest value compared to the other two industries. It is very easy to get
distracted when reading on online to simply check your facebook or email. It can
also be tiring reading on the computer and therefore resulting to less reading. It is
much easier to concentrate and read the content on e-Readers and books for longer
periods.
There is importance in creating a support system in order to help managers
measure strategy and vision against business. This can be accomplished by creating
and examining a balanced scorecard; the purpose being to help settle on priorities
across functions, initiatives, and over time. In an effort to make sure that a company
does not take time to devise an extended strategy and then let it go ignored, a
balanced scorecard and strategy map can act as a mechanism to keep focus on what
is determined to be the most necessary areas of focus for implementing change.
It is important to base strategy on several critical dimensions, and not get too
wrapped up in short-term financial indicators. Financial signs are of great
importance, however in a situation such as CourseSmart is in, financial projections
are variable based on industry trends, competition and other factors. CourseSmart
must consider both tangible and intangible factors that are going to affect value.
From thehe financial perspective, CourseSmart has the assets of multiple
major publishing companies. By partnering among each other these companies are
tremendously reducing financial and competitive risk. CourseSmart’s profitability is
based around a combination of their content, as well as remaining the world’s
largest provider of online digital course materials. Their current stance in this
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perspective is strong, leading the company with a need to focus more on strategy for
growth. Based on the current conditions of change in the market, this should
involve consistent improvements and updates to the online platform. As well there
should be strong emphasis on expanding relations with several colleges and
universities; as the sooner they are being used at colleges before anyone else the
faster they will build a relationship with those schools, which will involve long term
profitability.
From the external relations perspective, one of CourseSmarts greatest values
is the price at which they are able to release content in the digital domain. As the
sales of e-books increases, and competition gets tougher, CourseSmart can and
should aim to continue to lower cost to the limit they are able to, and expand their
market share in order to continue to be the industry leader. To help stand out to
customers and stay competitive, it is very important to keep extending compatibility
with the various e-book readers, computer and tablet devices. If someone assumes
they can access CourseSmart on every piece of technology possible they will have
achieved that goal.
Fromt the internal business process perspective, more aggressive marketing
should be one priority to look at. Proper and consistent marketing is going to
reinforce the company name, in terms of how customers view reliability and trust in
CourseSmart. Along with this, maintaining and increasing marketing share needs to
be a priority; with a rapidly changing and growing sector of the publishing industry
CourseSmart needs to remain consistent with their domain of the sector as the
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sector grows. To both satisfy shareholders and customers alike, again it is
completely necessary to update and keep an innovative and user friendly platform
for the system to run on.
From the learning and growth perspective, we have the benefit of decades of
experience among multiple large publishing companies. Unlike a startup or
company coming in with capital and ambition we have assets of great value for
fostering change and innovation. It would be of central importance to maintain and
increase as much as possible the amount of content and more importantly populart
content, and to create a positive relationship with providers of the content so they
are as happy to provide it to us as customers are to come to us for it. One thing of
great value that may come from customer participation is customer feedback on
user experience. This already being implemented on CourseSmarts website.
There are a large number of crucial factors that need to be taken into
consideration, and success in creating strategy can come from simplifying the way
to see how all these things relate and flow with one another. To give a brief
summary of the information just presented about using a balanced scorecard here is
a bare and straightforward representation of that information.
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After considering implications from the value curve, as well as examining
multiple areas of concern with a balanced scorecard, it begins to seem possible to
create a strong strategy for the company. After examining the difference in how
CourseSmart rates among competition, and with complementors we can see that
comparatively, CourseSmart is accessible, accommodating, easy to navigate, and
very strong in the market because of affiliations and partnerships in the publishing
industry.
When it becomes difficult to measure strategy and success of a company, it is
important and necessary to have a support system to be able to continuously come
back to, in order to evaluate and monitor change in relation to the companies initial
vision and mission. The balanced scorecard I have created is a good tool to go to to
evaluate top priorities and what is going to satisfy both customers and key
shareholders.
Profitability is important to examine with CourseSmart in the position it is in;
as a firm that is adequately positioned can generate higher returns. To maintain
profitability we must also explore the low cost leadership strategy. They are able to
offer in most cases the same products as competitor at a lower price, because they
are able of being cost effective. Since they possess a small team and limited funds
they are not able to adapt and react to change as quickly as other bigger wealthier
companies. Examining this led to the conclusion that CourseSmart may be able to
use cost leadership to enable the firm to produce goods or offer a service while at
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the same time maintaining total costs lower than what it takes competitors to offer
the same service or product.
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