Adobe Systems Essay Example
Adobe Systems Essay Example

Adobe Systems Essay Example

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Adobe has a strong position in the industry environment due to its technological superiority in graphic arts and publishing. Its success with Postscript has made it the leading supplier to the publishing industry, with a significant market share. By utilizing its technological expertise in print and publishing to the internet, Adobe also holds substantial market shares in this space.

According to statistics, Photoshop was used in the creation of 91% of websites worldwide, while Adobe Illustrator was responsible for the design and animation of 74% of them. Another Adobe product, Acrobat, dominates the e-document industry by enabling the creation and sharing of documents across multiple platforms without requiring a native application. Currently, Acrobat is the default standard for online document exchange, with over 200 million downloads of the free reader. Its versatility has allowed it to easily transition into the e-book software


realm. Acrobat's success can be attributed to its compatibility and ability to facilitate free exchange between various platforms and applications, which has become increasingly important with the rise of the internet.

Within the competitive landscape, Microsoft poses a major threat to Adobe, as they have developed their own e-book reader called "Microsoft Reader". However, Microsoft recognizes Adobe's dominance in the software market for content packaging within the print and publishing industry, where e-book content originates. Microsoft is also aware of Adobe's competitive edge in the e-document space for online document exchange.

Microsoft is skilled at developing DSIR for its products and aims to compete with Adobe by using its powerful market position in Operating Systems and productivity tools like Microsoft Office. However, Microsoft faces a significant drawback as their "Reader" cannot print documents, which limits its

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usefulness in the online business document sphere. Therefore, Microsoft appears to be focusing on capturing the retail consumer e-book reading market.

The market's other players lack significant market power and have a hardware-oriented approach, primarily targeting the retail sector. We do not view them as a formidable threat to Adobe currently. The e-book reading market seeks a standard, as do similar markets. Greater adoption of a particular technology leads to increased content creation and device compatibility, which, in turn, attracts more users to adopt it.

In order to create the DSIR advantage, it is important for technology to meet a specific need and be compatible across networks or ecosystems. However, there is one caveat to this. To evaluate the market segment for e-books (see Exhibit 7), it appears that the professional and technical audience, business audience, and reference material audience perceive the most value in the benefits offered by digitized documents.

Our strategy for Adobe is based on the assumption that, besides the travel book niche, there is little perceived usefulness in the retail consumer segment. The digital content market can be segmented into different stages such as content creation, layout and design, digital file creation, distribution, content viewing and printing. Adobe dominates in each link of the chain, although Microsoft surpasses them in the word processor space. Therefore, instead of competing with Microsoft in the retail consumer e-book sector, Adobe should focus on improving each stage of the value chain.

Adobe's network advantage will strengthen with the creation and packaging of more content using their software. Content packaging is a crucial driver in the e-document and e-book industry. Compatibility between content creation, design, and packaging systems is key

to adoption rates. Adobe's suite of design, layout, and publishing products has already captured a significant market share, resulting in an increase in compatible documents created with their Acrobat products. This trend is advantageous for publishers producing e-books, manuals, journals, trade magazines, and other related materials.

The use of Adobe's standards could make digital material sale transactions possible with Adobe taking a percentage of the sales. Additionally, Adobe's Acrobat product compatibility and provision of a free reader has significantly increased demand for e-documents, resulting in an installed base of 200 million ebook/edocument readers in the personal computer landscape. These downloaded readers include a built-in rights management tool.

This presents publishers with a significant opportunity to reach a vast audience. Thanks to its acquisition of XXXX, Adobe has obtained a high-quality digital rights management system. Utilizing this technology, Adobe can establish a comprehensive distribution network for publishers and major booksellers, offering a straightforward means for them to conduct transactions online.

Our suggestion is that Adobe should not sell the rights management suite outright, but instead offer it on an ASP model with a transaction-based fee. We believe that this approach would be compatible with open standards and complement them. To maintain openness, Adobe should thoroughly document and make easily accessible the standards, as they did for Postscript, and encourage developers to create tools for generating PDF documents. This tactic would attract complementary products to the content creation aspect and boost it. Although it is possible that this could create competition for Adobe's own reader, we do not think it is likely since we regard Adobe as a technically proficient company that will uphold its dominance of implementation in terms

of its core products. Our belief is that the complementary products would merely expand the market size of Adobe's offerings rather than detract from them.

One strategy for Adobe to enhance its DSIR advantage is by tapping into influential clients who have a large user/reader base. To accomplish this, Adobe should follow its success with the IRS by encouraging leading libraries to convert their reference material into digital format and make it available to members using the digital rights management tool. Another approach is to influence other government agencies, such as the Immigration Authorities, to make their forms available in PDF, including passport and visa applications.

Adobe should concentrate on incorporating features into its Acrobat software that cater to the business and technical user segment, in order to add value to their operations. This will enhance its market position and establish a solid presence among these high-value users. Because of their large installed bases in organizations and institutions, these users are usually reluctant to switch technology, resulting in high switching costs. As a result, this approach is especially critical when considering competition from Microsoft.

Based on market dynamics and the high value placed on digitization benefits, such as converting online convenience to cost savings through efficiency and ROI, we believe the main revenue potential in the e-document and e-book industry lies in this segment.

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