Adobe Systems Essay Example
Adobe Systems Essay Example

Adobe Systems Essay Example

Available Only on StudyHippo
View Entire Sample
Text preview

Industry Environment – Adobe’s Strong Position Adobe comes from a background of technological superiority in the graphic arts and the publishing industry. Success with Postscript - the technology and its marketing has positioned Adobe as the leading supplier to the publishing industry with a large market share. Having leveraged its technological competence in print and publishing to the Internet space, Adobe is poised with commanding market shares here as well.

91% of websites in the world have used Photoshop for their creation and 74% of web design and animation is done with Adobe’s product Illustrator.Adobe’s Acrobat commands the lion’s share in the e-document segment allowing the creation and exchange of documents created in multiple applications to be viewed, exchanged and printed freely without requirement of native application or platform. The acrobat product can easily b


e extended from e-document to e-book software. Currently Acrobat is the default standard on the web for online document exchange and the 200 million downloads of the free reader stand testament to that.Acrobat has achieved what you may call the position of DSIR and the main driver for that has been the proliferation of the internet and the value the acrobat product provides in terms of compatibility by allowing free exchange between platforms and applications.

The competitive landscape The biggest competitor to Adobe looming in the horizon is the 800 pound gorilla called Microsoft. Microsoft has created its own proprietary e-book reader called “Microsoft reader”.Microsoft realizes Adobe’s advantages in that Adobe is the software provider of choice for content packaging to the print and publishing industry – the primary creators of e-book content. They are also well aware of the DSIR

View entire sample
Join StudyHippo to see entire essay

advantage Adobe has gained in the e-document space for online document exchange.

Being a company that has thrived on creating DSIR for its products Microsoft is very sharp to the game. Their main strategy will stem on trying to take the DSIR advantage away from Adobe by leveraging on the strong market osition enjoyed by their Operating System and the suite of productivity tools – Microsoft Office. However there is one major technical disadvantage that Microsoft faces. They have not been able to get their “Reader” to print documents. This makes it pretty much a low second choice in the online business document space. Thus, the push for the retail consumer e-book reading market seems to be Microsoft’s game plan.

The other players in the market have relatively low shares and market power and are approaching the problem from a hardware standpoint with a very strong focus on the retail segment.We do not believe that they form a sufficiently credible threat to Adobe at this stage. Strategy The e-book reading market like all such similar markets is looking for a standard. The more people adopt a certain technology, the more will be the content that will be created for it, more devices will be built compatible to the standard and this will in-turn bring in more people to adopt it.

This cycle will thus create the DSIR advantage. But there is one caveat to it. To get this advantage, the technology has to be filling a definite need gap and it should be compatible across networks or ecosystems.Evaluating the e-book market segment characteristics (Exhibit 7) we see that the largest value in the benefits offered

by digitized documents seems to be perceived by the professional and technical audience, the business audience and the reference material audience.

In the retail consumer segment, other than the travel book niche, there does not seem to be a major perception of utility in the consumer’s mind. This assumption or inference will form the cornerstone of our strategy for Adobe.Of the digital content market we can divide up the constituents into Content creation, layout and design, digital file creation, distribution, content viewing and printing (Exhibit 8). Of this value chain, each step has highly concentrated players, with Adobe having the Lion’s share. Microsoft trumps Adobe in the word processor space, but other than that Adobe leads in each link of the chain. Instead of attempting to counter Microsoft in the retail consumer e-book segment, Adobe should strengthen each point in this value chain.

As more content, gets created and packaged in Adobe software, the stronger it will make Adobe’s network advantage.Content packaging This will be one of the key drivers of the e-document and e-book space. If the systems used to create, design and package the content are compatible complements in the environment; they will get adopted at an increasing rate. Adobe is already experiencing such a trend, with their suite of design, layout and publishing products capturing a large market share. This share translates into the fact that more documents get created which are compatible with Adobe’s chain of products including its Acrobat products. For publishers who produce e-books, manuals, journals, trade magazines etc.

n the digital format using Adobe’s standards. Adobe could take a small percentage on each sale transaction of such material.

Content distribution Another key cog in the wheel of this whole chain is content distribution. In the e-document space, Adobe by making its Acrobat product compatible and giving the reader away for free has created a huge demand driver. Technically we could infer that in the personal computer landscape, Adobe already has an installed base 200 million ebook / edocument readers (and these downloaded readers have the rights management tool built in).

This gives publishers a huge no. of eyeballs to tap into. Adobe through its purchase of XXXX has acquired access to a technologically sound and superior digital rights management system. It should use this to create a complete distribution value chain for publishers and the large booksellers, giving them an easy way to transact over the web.

Adobe instead of selling the rights management suite outright, should run it on an ASP model and take a transaction based fee. -compatibility = complements Open standardsIn our opinion, Adobe should keep the standards open, well documented and easy to access. Like they did for Postscript, they should encourage developers to create tools for creating PDF documents. This strategy will bring in complements into the content creation side and propel it. Though there is a chance this could lead to competition for Adobe’s own reader but it unlikely as we see Adobe as a technically proficient company that will maintain its superiority of implementation as regards its core products.Our feeling is that the complementary products will only lead to increasing the market size for Adobe’s products rather than cannibalizing them.

Signing on influential users Tapping into influential clients (large user/reader base) is another way for Adobe to

set the standard and increase its DSIR advantage in the space. Just as it did with the IRS making forms available in PDF, so should it try and get leading libraries to convert their content into digital format (specially reference material) and make it available to members through the digital rights management tool.Following the success of the IRS, influencing other government agencies to begin making forms available in PDF would be another strategy they should follow. For example, The Immigration Authorities (Passport application, visa applications etc.

). Providing value to the business and technical segment Adobe should focus on building in features in its Acrobat software that appeal to the business and technical user segment. Doing so will strengthen its position and entrench it within this high value user base.This segment of users having adopted a technology once do not switch easily as they have very high switching costs given the large installed bases within organizations and institutions. This strategy is particularly important with respect to the competition that Adobe might face from Microsoft.

Given the market dynamics of this segment and the fact that they value the benefits of digitization very highly (can actually convert the convenience of online docs into dollars saved through efficiency/ROI). Our feeling is that this is where the meat of the revenue will lie in the e-document and the e-book space

Get an explanation on any task
Get unstuck with the help of our AI assistant in seconds