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XLRI, Jamshedpur

Adobe Systems Incorporated


Case Analysis
Submitted by AbhayBhasin (G11001), Achin Kishore (G11003), CharulBhan (G11016), Hrishikesh C (G11020)

1. How did Adobe establish Postscript as a standard? Postscript was Adobes first product launched in mid 1980s and its basic function was to provide an interface between a computer program and an output device, such as a printer. Adobe was able to establish Postscript as a standard because: Open source programming language: Adobe kept the Postscript page description language open to all developers. This was coupled with good documentation and third party support, encouraging developers to build application compatible with Postscript. Benefitting from the widespread compatibility at minimal supporting cost, Adobe was able to ensure Postscript usability with number of applications. Joint product development: For Postscript interpreter, important component of Postscript product, Adobe sought out to work with customers in order to help with the design of customized Postscript interpreters using joint product development teams. It licensed the technology to printer and imagesetter manufacturers on royalty basis, thus collecting a fee on each printer sold. With increase of such licenses from 1 in 1985 to 60 in 1994, Postscript became a de facto standard. Strategic Alliances: Alliances with important companies helped Adobe to provide professional quality document writing to desktop users and thereby tap a blue ocean market. This ensured that it gained market share quickly and sustain it by maintaining the strategic alliances.

2. Which firm is in a better position to control eBook standards, Adobe or Microsoft? The eBook market was publicly advocating single open eBook standards; however, we believe that Adobe had a slightly better position to control these standards because: OEB Standards: The OEB standards lacked the ability to print the eBooks, which implicitly meant that documents written for Microsoft Reader could not be printed. Since Adobe did not adhere to the OEB standards, its PDF had the feature to print documents, a function they believed was still important. Compatibility: The OEB standards only advised specifications over the content and not the users of the eBooks. It essentially meant that eBooks formatted for one vendor could only be viewed in that vendors reader. Microsoft proprietary format ensured that
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MS and MS partners could only write and read eBooks in Microsoft reader format, whereas Adobe had publicly described both the eBook content and its packaging. Important relationships: Over the years, Adobe has developed strong historical relationships with publishers and continues to provide them with authoring tools for both print and web publishing. Since, the publishers used Adobe software, 70% of the publishers digital archives of print titles were already saved in PDF format. This ensured that Adobe was in a controlling position with regards to the eBook market.

3. What are the steps that Adobe can take to establish PDF as the standard?
Case Facts Adobe has already established itself in the digital documentation market as of 2001. It has been successful to leverage its position and has chunk of the e-book content available on the web. It has an edge over other formats in the e-book market in terms of the printing feature.

Solution Acrobat should thus continue to further its territory into the consumer e-books market and drive competition out of the market. A good indicator regarding its success in the e-books market is derived from the fact that despite an open standard being decided for e-books certain firms continue to adopt Acrobat as the reading standard on their device. Therefore by subsidizing its e-book market software Acrobat can drive out competition from this segment and continue to dominate in other segments.

4. Is the eBook market a winner-take-all market?


The case set in 2001 talks about the uncertainty in the evolution of the ebook market. Currently even in 2012, the standards are still unclear and there is a lack of agreement on a standard for the packaging of the content andeach ebook vendor had used its own proprietary packaging to implement the standard. There is tremendous competition in the eBook market right now between Amazons Kindle, Sonys eBook reader, Apples iPad solution, Barnes and Nobles Nook, and others. Given the digital nature of the content, it seems like a Winners-Take-Some result because of the ability to convert electronic book content between formats. In Winner-Take-All markets all the players and media, tend to tip toward a single standard, typically owned by a single dominant firm. As information increasingly moves to digital transmission formats, interoperability and the possibility of digital conversion between formats increasingly allows multiple winners to co-exist.

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XLRI, Jamshedpur

In conclusion, e-book standards are the right aspiration to keep publishing costs down, but in practice, standardization does not seem to fit the strategies of the large technology companies who see setting their own standards as a source of competitive advantage especially as the digital content becomes ever more complex.And even if a standard eventually emerges, the "losers" will be able to easily convert over to the "winner" and for a proprietary format to win it would have to be from massive proliferation of content and devices that use the format exclusively which seems highly unlikely. So the eBook market in our opinion is not a winner-take-all market.

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