Adobe Sysytems Incorporated Case Study Solution
1.Adobe v/s Microsoft in E-book Market
Adobe was a first mover in the e-books market as compared to Microsoft, but still it is facing a strong pressure from Microsoft due to its aggressive approaches in tapping the market. There are several factors which needs to be considered in determining out the stronger position in controlling the standards in e-book market.
First of all, the companies targeted two different segments of the e-book space. Adobe was dominant among the high professionals, publishers and corporations, while, Microsoft tapped the mainstream consumer market.Adobe had the strong historical ties with different publishers and titles and it tried to capture publishers to provide the titles. Microsoft gained more exclusive deals relatively to Adobe from Random House and Simon & Schuster.
Additionally, Adobe’ Postscript product was open standard,whereas MS reader was not.Adobe had maintained a slight advantage with 70 % of the publishers’ titles, already saved din the PDF.However, Microsoft’s product i.e. word was not preferred by the professionals as they preferred Adobe In design and Quark express for professional desktop publishing. Adobe’s marketing and participation strategies are not much aggressive but Microsoft is good at making a buzz in the public as it spends huge funds on aggressive marketing and creating alliances. To gain more alliances, both the companies went for partnerships with e-store retailers. Adobe’s PDF occupied the small stores in the e-book store market. But the dominant player of e-book stores, Amazon, favored Microsoft. This gave an edge to Microsoft over PDF as Amazon is one of the largest online retailers of the world
Further, Adobe was dominant among the desktop readers while Microsoft enjoyed the sustainable share among the Personal Digital Assistant segment. Adobe was proactive in providing the digital right management solutions for security concerns of the customers. On the other side, Microsoft had not yet provided the protection for digital right management, but there is a possibility that the company might attach its reader with the operating systems to provide the solution for the right management.
Moreover, Adobe had a strong customer base of Acrobat reader with a total subscribers of 200 million (See Appendix 1). Microsoft, on the other side, controlled the 90% share among the user desktops.The PDF is considered as a more sophisticated software relatively from the perspectives of high end professionals. On the other hand,the main stream consumers prefer world but it has a disadvantage as PDF allows the printing in the original format of the document while the Word does not.
Conclusively, both the companies have been performing well on their part, and it is difficult to decide one leading player among them, but according to the analysis conducted; Adobe is slightly at a better position as compared to Microsoft, as it holds historic relationships with key publishers and retailers, the 70% of the publishers data is already installed on Adobe and Adobe comes up with an open standard format as compared to Microsoft. But, still Adobe has to put extensive efforts in maintaining its position as Microsoft is aggressively capturing the market through its partnerships, alliances and a much higher media buzz and by setting new standards in relevant field.
2.Recommendations for Adobe
Competing with a strong and aggressive player like Microsoft would require Adobe to moderate its current strategies as the taste and preferences of the people are changing too with the changing world. In order to win the standards war from Microsoft, Adobe should create a mass market for its solutions, just like Microsoft, by utilizing the content, reader and the distribution segment. It should offer PDF creation as free just like MS Word by Microsoft, for example if Microsoft is offering free solutions then Adobe has to offer the same. If PDF is not made free, then obviously competitors can emerge, thereby providing solutions at competitive rates as compared to Adobe. So, Adobe should make PDF an open source solution.
Furthermore, as e-books formatted through OEB readers can’t run on other readers, but Adobe’s formatted documents can be opened through other readers, so the company should take advantage of this factor by making the conversion of OEB documents into PDF more convenient. This would add an additional feature to Adobe’s existing product portfolio, giving it an extra edge over Microsoft.
Finally, as Microsoft’s alliance is with giant players, and it has exclusive deals like Amazon, so, Adobe should also focus on making more partnerships with publishers, stores etc. to compete with Microsoft. Adobe should position itself in the print-on- demand segment as the customers will surely prefer the on demand printing over purchasing e-books ad Adobe has advantage in printing as compared to Microsoft and it should focus more on the high-end professional as it’s majorly positioned in the same market, which has a high demand for e-books. But to keep it safe form uncertain demand from the mainstream consumers, where Microsoft position is better, and the company should hedge itself through offering solution to both the segments.
3.Edocx v/s E-books
The two segments vary a lot but both represent huge growth aspects for Adobe. The edocx had a market of $59 billion and the e-books had a market of $30.5 billion. The customer’s base including both the high-end professionals as well as the main stream consumers, prefer the edocx as well as the e-books solutions. If all depends upon the tastes and preference of the customers from different markets but to cope with the uncertainties, Adobe should focus on both the markets by following the ongoing trends. If the growth in consumers segment will be high then it should focus on offering solution according to their needs or vice versa, even it can offer both solutions as it is well said that “Don’t put all of your eggs in one basket”.
4.Making Money in Market
To derive profitability from both the markets, it should offer the e-readers at discounted prices, if the customers demand frequent changes in its device. By providing the discount, the company will be able to gain more market share, customer loyalty and ultimately the financial profitability.The company should also focus on adopting a blue ocean strategy by reaching out to the potential untapped markets, such as the Digital Right Management solution segment, as it has not been untapped by other competitors yet, not even by Microsoft................
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