Analysis on Operation Strategies of Book Publishing Industry Based on Value Chain

Xiaofen CHENG

Shanghai LiXin University of Commerce Shanghai, China

chengxiaofen2011@yahoo.cn

Abstract-The book publishing industry has a complete industry chain and value chain of internal operation of the press. Due to the changes of technology, policies, and society, this traditional value change is undergoing a series of transformations. In order to sustain its competitiveness in the new commercial environment, book publishing enterprises have to adopt the operation models and operation strategies which adapt to the changes. On the premise of strengthening the local links of industry value chain, to influence, integrate, and even control the entire industry value chain so that the high-point of profit can be taken up, are the intrinsic requirement for the superior book publishing enterprises to develop the core competency. This is also the orientation of development strategies and key points for the operation of publishing enterprises.

Keywords-Value Chain; Book Publishing; Operation

Strategies

. VALUE CHAIN OF BOOK PUBLISHING INDUSTRY

A. Definition of Value Chain of Book Publishing industry

Michael Porter believed that every enterprise was the aggregate of various activities during the process of design, marketing, delivery, and product assistance. All these activities could be represented by a value chain. Each enterprise occupies one link of such industry value chain. And to win and sustain the competitive advantage for an enterprise, not only depends on the value chain of its internal operation, but also on the connections between the enterprise and its suppliers, dealers, and customers in a larger value system (i.e., the industry value chain). These connections in value chain among the enterprises, according to the Porter’s definition, are called the industry value chain. The value chain of book publishing industry is composed of the enterprises (such as studio, publishing house, printing house, and book store, etc.) connected in the relationship of continuous value adding (See Figure 1). According to different denotations, the value chain of book publishing industry can be divided into the narrow-sense one and broad-sense one: the former refers to the industry value chain of traditional paper book publishing, while the latter includes the value chain of digital publishing and online publishing, besides paper book publishing.

B. Features of Value Chain of Book Publishing industry

First, the value chain of book publishing is an entirety, in which interaction, inter-constraint, and inter-dependence exist. A large quantity of exchanges in information, materials, and capitals take place among these links as a process of value accretion. For example, when a book subject has been conceived by the publishing house, it should contact the writer who is suitable for the writing of such subject. The writer also has to select the appropriate press after the writing of a book. Before the book publishing, a series of issues including the copyright and copy fee need to be negotiated upon.

Second, added-value and circularity are the main features of the industry value chain. The value accretion link generates new value products based on the value products that have already produced by the previous line. The value chain of book publishing industry is realized in this way: the publishing house proposes a conception; the writer completes the writing the whole book; the printing house produces the book from the accomplished work; and the issuing enterprises present the books before the customers; and finally, the book purchase by the consumer realizes the consumer value and value chain profit. The realization process of the accreted value is in a constant cycle; if an industry value chain cannot achieve the effective cycling, it is bound to be “dead”.

Planning

Writing Production Issuing

WorkroomPress Author

Printing house Wholesaler Bookstore

Digital Technology Supplier

Digital Platform, Website

Core business process

Value creator

Figure 1 Value Chain of Book Publishing

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Third, the value chain of book publishing industry, especially among all the links of the value chain of the digital publishing industry possesses the technical relevancy, with obvious hierarchies. The accreted value and the profitability are different among various links of the value chain of book publishing industry. Generally speaking, in the traditional publishing industry value chain of publishing-printing-issuing, the content resource of publishing is totally controlled by the publishing enterprises. The printing and marketing of the publications as well as the transfer of the copyright and the authorization of its derivatives, are managed by the publishing link, and the printing and issuing links are subordinate to the publishing link.

II . REFORMATION OF VALUE CHAIN OF BOOK PUBLISHING

INDUSTRY

Due to the rapid development of science and technology, the transition of market environment, and the adjustment of industrial policies by the government, the value chain of book publishing industry is undergoing several significant changes.

A Digital Publishing

Digital publishing includes the digitalization of original works, editing and processing, printing and copying, issuing and marketing, and the reading and consumption; in fact all the links are involved. Internationally, traditional publishers represented by Springer Group and The Thomson Corporation is processing and integrating the content resources on a deeper level and trying to accomplish the transformation into the digital publishing giant by virtue of their own advantages. At the same some, some Internet giants and the new media corporations, such as Google and Wikipedia are now actively participating in the digital publishing industry based on their powerful information technology and advanced ideas.

B. Publishing Studio—Open Research and Development

Publishing studio is a kind of private production and operation organization engaged in publishing. At present, there are several categories of publishing studios: studios only engaged in the bookbinding and design; studios engaged in the type-in, typesetting, and proofreading, etc.; studios engaged in the selection and planning of book subjects, soliciting contributions, editing and processing, etc.; and studios engaged in book issuing and the management of the whole publishing flows. The publishing studio may be independent, or in cooperation with the publishing houses to launch a large number of best sellers and brand books, with great success. For example, the sales volume of Rich Dad series, Who Moved My Cheese series, Cai Zhizhong Comic series are too large for their peers to ever imagine. Compared with the normal publishing houses, the publishing studios have the advantage of low operation cost, sensitivity to the market demand and high efficiency of operation and management.

C. Collectivization and Industrial Chain Integration of

Publishing Enterprises

From the perspective of overall status of the industry, the publishing group has the following characteristics: first, diversified business cover all areas of publishing industry in the broad sense, including books, newspaper, magazines, and internet media, etc; second, complete publishing industrial chain is established inside the publishing group, including the publishing, printing, issuing, information processing, logistics, service, and agency, etc; third, publishing group sets up the publishing and issuing network in a specific district or even the whole country. In general, with the continuous development, publishing groups are building the 3D integral commercial model which combines diversification, integration of the industrial chain, and marketization (See Figure 2)

III .OPERATION STRATEGIES OF BOOK PUBLISHING

INDUSTRY BASED ON ACCRETION OF VALUE CHAIN

The operation strategies adopted by successful book publishing enterprises is as follows: to control and integrate one or several links of the industrial chain effectively, so as to realize the accretion of industrial chain.

A. Focus on Upstream Subject Selection and Planning in

the Value Chain

Subject selection and planning is the core competency of a publishing house, and a good management of the subject selection and planning is essential for the healthy development of the publishing house, as well as the foundation for the invincibility of the publishing house. Several presses separate their creative and planning departments out as independent enterprises in order to realize the specialization of their subject selection and planning capacity. And it is the responsibility of such independent enterprises to provide creative and planning

Diversification

Industrial Chain

Market

Research Production Supply Marketing

Paper Digital

Multi-media

Others

District Coverage

Nationwide

Figure2 3D Commercial Model of Publishing Groups

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service to the publishing house. Therefore, the publishing industrial chain is stretched upstream.

B. Extensions to Downstream Issuing Channel in Value

Chain

The extension to the downstream of the value chain refers to the strategy adopted by publishing units, such as the publishing house, and studio, etc, to extend their business scope downstream to the issuing link, so that the issuing channels can be controlled. First, publishing enterprises should control the traditional issuing channels. The principle work in book issuing on the part of the publishing house is to advertise and promotion planning; depending on the categories of the books, they should choose the proper issuing channels and methods according to the circumstances. Since their control over the issuing channels is insufficient, problems, such as overstocking, supply shortage for best sellers, and the delay in payment reception often arise. Such problems have an adverse influence on the normal operation of the publishing institutions. Second, the publishing enterprise should develop the online issuing platform. Internet platform not only helps the publishing enterprises in the marketing of traditional paper books, but also provides the issuing platform for digital publishing. For example, in May of 2007, 21th Century Press announced the strategic cooperation relationship with Dangdang Website. Through this means, the book publishing enterprises and the internet issuing enterprises could build a situation in which they can share information, risks, and success.

C. Transverse Extension of Value Chain by Virtue of

Content Resources

Transverse extension of publishing industrial chain refers to the broader and deeper exploitation of the contents resources of the publishing, by means of the copyright authorization and transfer, so that greater added value of the publication could be realized.

First, to realize value accretion through the accessory copyrights of the books. The accessory copyrights of the books mainly include the serialization right, mass market copyright, club copyright, overseas copyright, and audio book copyright, etc.. The exploitation and utilization of the accessory copyrights can realize the value accretion of the existing books.

Second, to develop diversified products using the profit multiplier model. With the assistance of the image or conception recognized by the market, the packaging and production can generate considerable profits; such practice is similar to the act of multiplying, and therefore is named by the economists as profit multiplier model. The book publishing enterprises can reap profits from one product, image, trademark or the service by diversifying its form (See Figure 3).

. CONCLUSION

Value chain of book publishing industry is composed of the enterprises connected in the relationship of value adding in the industrial chain of book publishing. The value chain of book publishing industry is an entirety, and added-value and circularity are the main features of industry value chain. The value chain of book publishing industry, especially among all the links of the value chain digital publishing is characterized by technical relevancy, with obvious hierarchies. The operation strategies adopted by successful book publishing enterprises is as follows: to control and integrate one or several links of the industrial chain effectively, so as to realize the accretion of industrial chain. The extension strategies of value chain include the extension to subject selection and planning upstream, the extension to issuing channels downstream, and or the transverse extension to develop value chain by virtue of content resources.

REFERENCES [1] Michael Porter: Competitive Advantage, Huaxia Publishing House,

2005. [2] Xu Lifang, Analysis on Value Chain of Publishing Industry,

Publishing Science, Issue 4, Volume 16, 2008 [3] Annual Report on China’s Digital Publishing Industry 2007-2008,

China Book Press, October,2008 [4] Chen Xiang China’s Experiment of Profit Model of Digital

Publishing, Chinese Reading Weekly, August, 2007. [5] Zhou Xia, What Is Private Publishing Studio? View on Publishing,

January, 2005. [6] Scholars’Point of View on Book Publishing industry: What Is in

Shortage, and What Is Not? China Press and Publishing Journal, September,2008.

Books

Transverse profit of the value chain

Figure 3. Profit Multiplier Model of Book Industry

Book series

Film and television works

Cartoon toys

Tourist products

Training Courses

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