Are you on the same page about an ereader market dominated by Kindle?

ereader student
By Tutor Lauren O'Brien

10 March 2016

It’s with some irony that on World Book Day owners of the Nook e-reader received the news that digital book sales for their devices will cease in the UK from 15 March – more details in this BBC article.

This will obviously come as a blow to those who have purchased the Nook reading device, but from a business sense, I’m not sure that this news is a huge surprise.

At present, Amazon’s Kindle completely dominates the e-book market, which certainly appears to be a growing and successful market.

The Kindle is a "star"

In the terms of the Boston Consultancy Matrix (BCM) described in Test of Competence (TC) Business Management (BM) Module 9 – the Amazon Kindle is a “star”.  It has a high market share and high growth.

Amazon don’t appear to have taken their position for granted and have continually brought out new - slightly differentiated - models of their Kindle range, which have no doubt contributed to its continued success.

With Kindle having such an established market share, did e-reader alternatives like the Nook ever have a chance?

Did Nook have a choice?

The Nook will have been a “question mark” according to the BCM for its backer Barnes and Noble (a popular US bookseller) for some time. This means that the Nook was a product in a growing market but that it had a low share of that market. As such, they had a choice – either invest a good deal of money in the promotion of the Nook in the UK, while doing so taking on Amazon in a market in which they are already so dominant, or abandon the product. In the UK, they have made their decision and have ultimately pulled out of the e-book market.

And from a competition and consumer choice standpoint, this leaves Amazon in an even stronger position. Test of Professional Skills (TPS) Advanced Finance (Afin) students will be well aware of the competition authorities here in the UK. It will be interesting to see if this development causes the competition authorities to look any closer at the e-book market in the future.


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