Value Chain Model of Audible, Inc - Research Paper Example

Introduction: The Value Chain Model was a concept framed by Michael Porter. He introduced this model in his book, Competitive Advantage (1885), to explain a range of activities that are common to a wide range of firms. The aim of most of these activities is to offer the customer a certain threshold of value that exceeds the cost of conducting activities and reaps profits for the business. The report will put to light the Value Chain Model of the firm Audible, Inc (www. Audible.com). Audible, Inc is a subsidiary of Amazon, Inc. It pioneers in the provision of digital spoken audio information and entertainment on the web. It thus offers the customers unique and distinguished ways to embellish their lives every day. The principle aim of Audible is to integrate literate listening so much that it becomes the core tool for anyone who is seeking knowledge to be more productive and well informed. Audile’s collection is massive. It‘s collection includes over 85,000 audio programs that have come from above 1000 content providers. These content providers vary from audio book publishers to broadcasters to entertainers to magazines to newspaper publishers to business information providers. The content can be easily downloaded and played back on various wireless mobile devices. Audible is also the leading provider of for audio products for Apple’s iTunes Store. (About Audible) Audible’s Value Chain Activities: According to Porter(1885), the core value chain activities are as following: 1. Inbound Logistics 2. Operations 3. Outbound Logistics 4. Marketing and Sales 5. Service Inbound logistics include some core value chain activities such as receiving the raw materials and stocking them in warehouses. After stocking in their warehouses, the materials are distributed to the distribution and from there to manufacturing. Audible is an online store that delivers digital content. It delivers audio content and its stock includes DVDs at the most. Hence, its warehouses are designed to keep CDs and DVDs. Its core business model enables customers to shop, purchase and download audio content from their online store, www.audible.com. The operations include customizing the audio content to the standards that run at audible; adding the audible logo on the audible media content and copy-right protecting. Out bound logistics don’t involve brick and mortar here. The customers are given the opportunity to download their desired digital content on the media of their choice. Marketing and Sales involves coming up with customer needs and targeting them for sales. Audible markets itself through online media, social media and through the online big wig, Amazon.com. Audible has a toll free number through which customers can get in touch with their customer services department. (Value Chain Model) The primary activities in value chains are a combination of various things. These include the infrastructure of the firm, its Human resource management, its technology development, and its procurement. Audible is strategically aligned with Random House Inc for the production and publishing of audio content. Audible uses various technologies to support value creation for its business. Audible cut down on all the brick and mortar expenses such as paper, printing, warehousing and shipping by opting for online delivery that not just ensured that the customers were immediately delivered but were also offered a wide ray of DVDs to select from. Moreover, Audible also created value allowing the authors to dub in their own voices. Eventually the population and the masses started with drawing themselves from books because they found themselves too busy to read. Audible offered them the opportunity to become accustomed to reading amidst their busy schedules. They weaned away from books and started looking up to digital content available to them to read. Before this audio publishers found it difficult to ship physical products. An online shop store made it possible for them to come out of that limitation. Audible was the first company to center its business model on the internet. It took audible many years to construe the technology needed for distributing the audio online while ensuring that the owner copyrights are protected. Another critical aspect of their technology use was the mobile playback device. Thus audible created value for its customers through these aforementioned initiatives. It performed its activities rather efficiently ensuring that the customer is given more value than the cost that he will incur for purchasing the product. It is thus in these activities that the firm gets to generate superior value for its customers. According to Porter, competitive advantage can be used by opting for either of cost advantage or differentiation. In the case of Audible, they focused on creating competitive advantage by differentiating their customer services and their business model. Value Chain of Border’s book store: Borders are a brick and mortar store. It is one of the fastest growing book stores in America today. It is home to 354 super stores that operate under the banner of Borders Books and Music. These are massive superstores that offer books, special events, live music, story times and appearances by different artists and authors. Borders follow the bricks and mortar value chain model. All major activities in a typical value chain model are followed at Border. They have their own warehouses that take care of inbound logistics. Products are kept in their warehouses and they shipped to their superstores and branches all round the world. Similarly, they create value by offering a huge assortment of products, i.e. music and books to their customers at low costs. Their differentiation point is the low cost advantage that the customer gets and the overall book store experience because as mentioned before, their collections are massive. Borders conduct both above and below the line marketing and sales activities. They market via billboards all over United States, in magazines, news papers, through television, radio channels etc. (Company Profile for Borders) Impact ofAudible.com’s IT innovation on the book retailing industry: As mentioned before, audible was the first one to base its business model on the basis of Internet. It changed the paradigms of book retailing industry for people who are busy to read. It attracted the busy crowd towards itself. They shifted bases from hard cover books to digital content reading. However, literal book reading is still big in the book retailing industry. While efforts have been made to digitize books as much as possible, the hardcover concept continues to lead and will probably do so for the next couple of years. There will be shift in terms of the volume of digital content produced, thanks to the launch of Kindle by Amazon. So while traditional book retailing will continue, the digital book reading is expected to grow in terms of its share in the market. Bibliography About Audible. 28 Jan 2010 . Company Profile for Borders. 28 Jan 2010 . Value Chain Model. 28 Jan 2010 . Read More