Introduction
An Innovative Business Idea-Online Library will be developed in this report which will tend to grow and survive in the targeted sector. The name of the business will be ‘E-Book’, which will be an online book reading service provider. There will be two tasks in this report. The business idea of the E-Book and the business model canvas of the company will be evaluated. The business plan of the E-Book will be evaluated including market analysis, industry analysis, customer segmentation, target market, operation details, SWOT analysis and financial requirements.
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Business concept of E-Book
In this advanced world, people have become online freaks and like to enjoy different types of services online. People do not like to go out to libraries because going out needs much time. E-Book has identified the demand for online libraries and developed the business idea of providing online book reading services. The company will provide various types of books, such as action and adventure, classics, comic, fantasy, historical fiction, horror and other types of books to provide books according to customers’ choice (Thriftbooks, 2020). E-Book will scan all types of books to update on their apps after collecting from book publishers. The company will provide subscription options for different time ranges and customers will select the subscription packages on the basis of the time range. Subscription packages will start from one month to one-year subscription. Customers will pay specific payments according to their selected packages. For instance, the subscription fee for one month will be £20, and customers have to pay the subscription fee first and then will be able to enjoy reading unlimited books of E-Book. The subscription fees will be received through an online payment method. E-Book will provide some books without any subscription fee to attract customers toward them.
Business Model Canvas:
Market analysis for justification of the business plan
Market gap: People love to spend their time reading books but avoid this because of the time they need to go to the library. They have to select a library and visit the location where the library is situated, and the distance of library discourages people from going there. Therefore, E-Book will provide online book services through their app, and people will install their apps to enjoy online book reading and save time from going outside.
Customer’s appeal: E-Book will reduce UK people’s pain of going to libraries to read books by providing every type of book on their apps. Tech-savvy people of medium to high-income levels who love reading books are the target of the company. 51% of the UK read books which shows the vast opportunity for e-book growth (KANTAR UK, 2019)
Geographic location: E-Book will develop its app to provide services across the UK because the country has the latent to make the business successful. The literacy rate of the UK is 99% which means that E-Book will be successful in establishing their business by attracting literate people to read books (Knoema, 2020).
Demographic details: UK has 67,867,948 people, and 51% of people read books (Worldometer, 2020). It seems that E-Book will be able to attain success in their business by attracting a huge amount of book lovers in the UK.
Tend to grow: Exceptional business idea of ‘E-Book’ which is providing online book reading services, will assist the business to have higher revenue. E-books have a target of achieving growth and expanding business internationally after enhancing demand in the UK. As a result, E-Book will be more profitable with the continuous growth of their business.
Industry Analysis:
Spend on technology: It found on research that libraries across the world spend $1.8 billion on technology to ensure the accessibility of new technologies (The University of Southern California, 2020). It makes sure that customers will be provided with experimental learning opportunities.
Presence in social media: About 2.95 billion people use social media which encouraged libraries to ensure their presence on social media (Statista, 2020). Through replying to social media tags, comments or mentions, libraries become capable of keeping the readers engaged with them.
Publishers strive to adopt a more customer-centric approach: Book publishers are vendors who are trying to understand the needs of customers and provide services according to customers’ choices (WILEY, 2019). They are working on increasing customer satisfaction.
Publishers and vendors are working cooperatively: Publishers and vendors are working cooperatively to provide a more seamless knowledge base experience for customers (WILEY, 2019). They are concentrating on improving communication with customers to deliver better experiences.
Customer segmentation:
Hjort et al., (2013) have revealed through their research that customer segmentation refers to the way of dividing the market according to the gender, religion, income status and other factors of clients. Segments of customer segmentations are stated beneath:
Demographic segmentation: E-Book will divide customers according to life standard, age and gender if they use demographic segmentation.
Behavioural segmentation: Decision making, usage, and behaviour are the factors that E-Book have to consider in behavioural segmentation.
Psychographic segmentation: Sensitivity, opinions, interests, needs, and activities are the factors that E-Book have to use if they adopt psychographic segmentation.
Suitable choice: Behavioural segmentation chooses customers on the basis of behaviour and decision-making; therefore, it is suitable for E-Book. Book lovers who love to read books and use the internet will be the customers of the company.
Target Market:
Differentiated Market targeting: E-Book will provide books according to customers’ choice under this process.
Undifferentiated Market Targeting: The company will not consider customers’ choices while providing books if they conduct undifferentiated markets.
Concentrated Marketing Targeting: It is the process where E-Book will deliver services after bearing in mind the resources they have.
Suitable choice: Undifferentiated market is the suitable choice for E-Book because they will provide all types of books on their apps, and customers will read the books of their choice. It will help the company to get every type of book reader and have high revenue.
Major competitors of E-Book:
The British Library, The London Library, Guildhall Library, National Art Library at the V&A, The Poetry Library at the Southbank Centre and many others library are the top libraries of London (The Culture Trip Ltd, 2020). People love to visit the libraries because they have a huge collection of books from many years ago, including new books and the libraries have experience with customers’ choices that help them to attract customers. E-Book has identified the exclusive business idea of providing all types of books through apps to compete with the competitors strongly. There are few libraries in the UK that provide digital library facilities with every type of book which will be provided by E-Book. As a result, customers will install the apps of E-Book and read their books instead of going to the libraries.
Operations Details of the business:
‘E-Book’ will develop their app and will provide different types of books for customers on the app. The company will scan the books through a scanner after that, they will update the books on their apps. Customers will get all types of books, such as thrilling, adventurous, romantic, horror, comic and other types of books on the app. E-Book will provide subscription packages of 1 month to 1 year to the customers. Customers will choose subscription options according to their choice. Readers will pay the subscription fee first then they will be able to start reading books. They will be able to read unlimited books within their subscription period. The company will also provide some free books to attract customers.
Business deals with book publishers: E-books will have business contracts with book publishers to ensure the flow of books. They will make sure that every kind of new book including old, will be provided through their app.
Promotion: E-Book will conduct digital marketing to promote its services. They will use social media such as Facebook, Twitter, Instagram and others social media to attract readers toward themselves to encourage them to install the app and have a subscription.
Selection of employees: E-Book will appoint IT experts who are well-experienced, an E-commerce developer and other employees. IT experts will develop the app and maintain the apps to ensure a great customer experience. The E-commerce developer will ensure that online payment will be secured for both customers and E-Book. There will be some employees who will contact book publishers, collect books and update the books to the apps.
SWOT Analysis of business idea
SWOT analysis helps companies to identify their strengths, weakness, threats and opportunities (Phadermrod et al., 2019). Therefore, E-Book will be able to utilize its strengths and opportunities to will full potential to ensure growth and prevent threats and risks to make the business successful.
Strengths: The business concept of E-Book is providing book-reading services for customers through their app; therefore, customers will not need to visit long-distance libraries to read books. Different types of books, such as comic, romantic, historical, adventure and other types of books, will be available on the apps. Readers will be able to read unlimited books sitting in their homes or wherever they want. E-Books provide some books free for readers who will not need any subscription fee.
Weakness: E-Books will be a new business concept which is not famous as physical libraries, and many people like to spend their time in libraries to enjoy the environment of the libraries. The company has no experience in the business; therefore they will face many complexities at the start.
Opportunities: Sometimes people avoid book reading because of the distance between the library and their current location. E-Book will help readers to read books from anywhere they want. 51% of UK people read books which refers to a great opportunity (KANTAR UK, 2019).
Threats: The current libraries of the UK have created their own charm on customers’ minds. Therefore, it will be easy for E-Book to attract customers toward them. Most readers like to read books on having books in their hand that will be tough to change customers’ perception of reading books through apps.
Financial Requirement: Starting expenses of E-Book:
| Properties | Costs |
| Office rent | £20,000 |
| Office equipment | £100,000 |
| Office stationaries | £10,000 |
| Salary of IT experts and E-commerce experts | £20,000 |
| Employees salary | £8,000 |
| Utility bills | £8,000 |
| Digital marketing | £5,000 |
| Other costs | £5,000 |
| Total Costs | £176,000 |
Break-Even Point
Assumptions:
1. Subscription fee/per month is 15 Pound
2. Number of customers will increase by 600 people per month
It can be seen that the company will reach a break-even sales point of 7026 pieces subscriptions which is expended to reach in the 12th month of operation.
Conclusion
There are many libraries in London which have great book collections from many years ago with new. Customers like to visit the libraries because of the environment of the libraries also; therefore, E-Book will face tough competition in the beginning because it will take time to attract book readers who live to visit libraries. E-books will ensure the availability of all kinds of books and take initiatives on the basis of the result of the market analysis of this report. As a result, E-Book will be able to generate higher revenue and survive in the sector with success.
References
KANTAR UK, 2019. 51% of UK adults read a book in the last year. Retrieved from: https://uk.kantar.com/consumer/leisure/2019/51-of-uk-adults-read-a-book-in-the-last-year/ [Assessed on: 10 June 2020]
Knoema, 2020. United Kingdom – Adult (15+) literacy rate. Retrieved from: https://knoema.com/atlas/United-Kingdom/topics/Education/Literacy/Adult-literacy-rate [Assessed on: 10 June 2020]
Phadermrod, B., Crowder, R.M. and Wills, G.B., 2019. Importance-performance analysis based SWOT analysis. International Journal of Information Management.
Statista, 2020. Number of global social network users 2010-2023. Retrieved from: https://www.statista.com/statistics/278414/number-of-worldwide-social-network-users/#:~:text=In%202019%2C%20an%20estimated%202.95,almost%203.43%20billion%20in%202023.&text=Social%20network%20penetration%20is%20constantly,2020%20stood%20at%2049%20percent. [Assessed on: 10 June 2020]
The University of Southern California, 2020. What Trends Will Affect and Shape Libraries In 2018 And Beyond? Retrieved from: https://librarysciencedegree.usc.edu/blog/what-trends-will-affect-and-shape-libraries-in-2018-and-beyond/#:~:text=According%20to%20the%20American%20Library,spend%20%241.8%20billion%20on%20technology.&text=Educating%20patrons%20on%20science%20and,Offering%20experiential%20learning%20opportunities [Assessed on: 10 June 2020]
The Culture Trip Ltd, 2020. The 10 Best Libraries in London. Retrieved from: https://theculturetrip.com/europe/united-kingdom/england/london/articles/the-10-best-libraries-in-london/ [Assessed on: 11 June 2020]
Thriftbooks, 2020. All Categories. Retrieved from: https://www.thriftbooks.com/sitemap/ [Assessed on: 10 June 2020]
Worldometer, 2020. U.K. Population (LIVE). Retrieved from: https://www.worldometers.info/world-population/uk-population/ [Assessed on: 10 June 2020]
WILEY, 2019. Top 10 Trends at the 2019 Electronic Resources and Libraries (ER&L) Conference. Retrieved from: https://www.wiley.com/network/latest-content/top-10-trends-at-the-2019-electronic-resources-and-libraries-er-l-conference [Assessed on: 10 June 2020]