Digital Book Reader and Synthetic Listening Technology - Research Paper Example

BUSINESS PROPOSAL Justin Medvic ECO/561 Alfred Igbodipe of Phoenix April 21, Product: Digital book reader and synthetic listening technology Background information This business proposal seeks to establish the feasibility of starting a business in Digital book reader and synthetic listening technology. It considers various economic factors that influence the outcome of the market performance of the firm in question. The reality of information and communication technology has gained much prominence and is continuously shifting consumer behavior as far as reading culture and audio-visual communication is concerned (Barclay, 2012). It is therefore important to note the increasing competition in efficient conversion of hardcopy text material to digital form that is user-friendlier. Digital book reader and synthetic listening technology seeks to enter the market amidst tight economic barriers and market conditions that requires critical analysis of relevant economic analysis concepts that include market structure and the elasticity of demand. The firm is focused on delivering customer-focused product that will be considered affordable, efficient and reliable. In its bid to turn tables on the existing competition, it calculates its move in respect of the market structure in which it falls. This is seen to affect it’s pricing and the general non-pricing competitive strategy in the digital book reading and listening industry. Statement of market structure Digital book reader and synthetic listening technology has relatively larger number of competitors. Some of the alternative firms in this industry include Amazon Inc., and other firms that can convert the printed word into audio. This firm will therefore fall in a monopolistic market structure where competition is significantly high. It seeks to differentiate its product by creating an authentic voice in audio conversion of the written text to the customer. Although there exists products that can also transform text to voice, they sound inhuman and this will give Digital book reader and synthetic listening technology an opportunity to create its own design and completely different experience to the user (Barclay, 2012). It differentiated product aspect will give it an upper hand in giving a price that is based on marginal cost. The increasing substitutes of similar products bring in the concept of elasticity that this product must consider. For instance, there are competing products that also convert textbook writings into digital audio form, which presents a close substitute to Digital book reader and synthetic listening technology. This means it will be operating in a highly elastic market where price changes carry significant consequences in terms of its sales volume. The product will be sold at a price close to the prevailing price and this means it will have to improve its quality and sustained quantity to be supplied to the market. Elasticity of the product Owing to the higher proportion of close substitutes of this product, it will be characterized by perfect price elasticity. This means that it will have to offer market prices albeit marginal differences arising from its differentiated features. The price range will be set at $10-$20 so that it is cushioned against possible loss in sales or continued production cost (Schwartz, Carew & Maksimenko, 2010). This means that the product must be sold within the range of its marginal cost of production that is a factor in price elasticity of demand. As explained from the graphical representations below, when the price elasticity of supply is price inelastic, it will be difficult for suppliers to react swiftly to changes in price. On the other hand the case of elastic supply will lead to immediate reaction as shown in the diagrams below Fig 1.Perfectly elastic supply Fig 2.An elastic supply curve Price Price P1 S S D1 D2 D1 D2 Q1 Q2 Quantity Q1 Q2 Quantity The market nature of this product will show the trend in elasticity of supply as in fig 1 in the short run and adjust to fig 2 in the long run. Pricing strategy The product will charge different prices for different number of required pages of conversion by the consumers. It is important to note that it will charge a relatively lower price despite possible higher initial production. The price differences are inevitable due to different work volume that the clients will be accessible to. It is also important to note the two sides of the product in the form of digital reader and listening will attract different charges. The prices will be estimated as follows Reader Listener Less 100pgs pages $ 10 $ 11 Less than 400 pages $ 14 $ 15 More than 500 pages $19 $ 20 Listening requires more technical input and therefore attracts relatively higher price. However, it can be noted that the price differences among page clusters is very slight (McEachern,2014). This can be explained by stiff competition by close substitutes and the highly elastic market. The prices are expected to keep an upward trend steadily as other products will face equal competitive reorganization problems amidst increasing innovation in the industry. This is likely to cause significant barrier to entry that will force the consumers to bear with the increasing prices in the industry. This is a short-term measure which the product seeks to capitalize from. The supply price of the product is projected to be inelastic in the short-run but will change as the product fixed costs and variable cost is adjusted. Output projection The product is projected to realize a sales output of over 100,000 units at the prevailing prices. Since this market experience high price elasticity, the product will rely on more output to realize more revenue. Considering the concept of marginal revenue, which expects to be equated to marginal cost, the product will be regulated in terms of output so that the output is customer focused and cost effective on the side of the producer (Schwartz, Carew & Maksimenko, 2010). To manage the increasing cost of production, the firm will adjust its input factor combination between fixed and variable such that a few highly skilled personnel and sophisticated machines can be assigned more work. This will help in distributing the production cost on a small fixed factor input thereby boosting more use of variable factors that can easily be managed in terms of wage prices and rent. Non-price competitive strategy This product will ensure that the experience of the customer is worth the value of his/her money. This is a critical boost to the image of the firm and increased sales volume. Emphasis on a more human-like voice when an audience is listening to the audio converted text creates a livelier environment and this offers a competitive edge for Digital book reader and synthetic listening technology against its substitutes that have more of automated and abstract machine voice (McEachern, 2014). The high technique of the product will create significant uniqueness to the clients with a great experience. It is also worth to note that this product also seeks to translate text to any desired language by the client. This will make it offer entertainment besides being educative which is a plus to the product. By seeking and securing patent from the government, the product will have created a barrier to entry in the industry by potential entrants. Since this industry requires significant investment in technology that is expensive as far as security from unauthorized reproduction is concerned. This is critical barrier to entry by other firms and repulsive to the existing competitors in some market segments. Such factors will boost the market command of this product and guarantee its survival. Current global economic conditions and their effect on local macroeconomic indicators for the product It is important to take into consideration the current economic condition off the world. This industry is emphatic to technology and seeks to explore greater market size in the future. In this regard the current economic environment is critical in making informed decisions on sales and pricing for this product. Digital book reader and synthetic listening technology requires multi-dimensional approach in regard to the global economic trend which keeps changing. Contemporary economic condition is characterized by rapid expansion in information communication infrastructure. This has seen a surge in number of people shifting to more convenient online reading and preference to soft copy information presentation. It is important to note that rules on intellectual have equally made it possible to regulate one’s output for the market. The current economic condition is also constituted of robust size of learning process as countries gears towards millennium development goals. This has seen significant adoption of technology and particularly information and communication sector. The increasing influence of globalization has equally boosted disposable income among many people especially the market segment this product targets. The favorable economic performance in the current time offers better opportunity for this product and points better future in terms of market size and revenue. The main challenge that is characteristic of the current economy is cyber crime and inflation which will significantly cause imbalance between profit and costs of production. Business cycle of the product It is important to analyze the general and specific market prospects in respect to the local economys stage in the business cycle. Due to the above discussed infrastructural growth and increasing size in information and communication technology, the business cycle is at the phase of exponential expansion. The better part of the global population is seeking literacy in computer applications for easier online and digital learning. This has been seen to arise from the increasing campaign for education as a recipe of economic growth and development. The evident good performance of other competitors like Amazon Inc. shows that the number of clients to digital reading is on the rise. The general global business cycle is on the rise as it is recovering from the recent economic depression. The specific business cycle for this type of product is at its recovery phase and this indicates potential profit for the industry. At this stage of economic cycle and business growth, this product is at its peak and has a brighter future. Since this is the period when the shift to digital reading is gaining popularity, it reflects the path to business boom. This is a critical tool towards effective planning of marketing and pricing. Current credit market conditions The credit market condition is also a critical factor to consider when making pricing and planning world, for the product. Strategic marketing and product creation requires the sound knowledge of current credit condition. Considering the picking economic growth, credit facilities are increasingly becoming common as a sign of further investment. In regard to the prevailing competition in various industries and increased economic activities, circulation of money is high and this avails ready credit. In most parts of the world, the governments and international monetary policy recommendations agitate for more credit facilities for increased investment. This is a critical factor as far as general consumer behavior is concerned. The global economic expansion with major budget allocation in information communication infrastructure facilitates availability of credit to do further investment and this is a positive sign to the industry. The challenge that this poses is the increased chances of entry by other potential competitors. Aggregately this is a critical aspect of business planning with respect to economic trend in the country. Positioning strategy The firm will front its product through other existing competitors to familiarize with the market. This is critical in giving it a head start in the overall market coverage. The product will adopt follower strategy with significant feature related competitive measure. This is the only way as there are pioneer products of similar nature. Conclusion The product will gain from the increasing desire to learn in any environment and in various languages. Digital book reader and synthetic listening technology will perform if sound strategic economic analysis is effectively implemented. References Barclay, L. A. (2012). Learning to listen/listening to learn: Teaching listening skills to students with visual impairments. New York: AFB Press. McEachern, W. A. (2014). Macroeconomics: A contemporary introduction. Schwartz, R. A., Carew, M. G., & Maksimenko, T. (2010). Micro markets: A market structure approach to microeconomic analysis. Hoboken, N.J: John Wiley & Sons. 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