Kindle Fire Case Summary

Executive Summary: In an up and coming tablet market, Amazon’s Kindle Fire faces intense competition with tables from Apple, Samsung, Motorola, and Google. We must distinguish ourselves in this cutthroat market by positioning itself as the ideal gaming tablet experience to children under the age of 12.

Strategic Alternative One: To young adult male media junkies, Amazon’s Kindle Fire is the epitome of user friendly tablet experiences which provides the best multimedia consumption experience by offering a bargain price, by being portable, by having long lasting battery life, and by offering Amazon Prime streaming services for books, TV, movies, music, and more.

Relevant Facts:

The Kindle Fire is significantly cheaper than its direct competitors.

We have tens of thousands of preapproved Kindle Fire apps, and over 18 million movie, TV, music, etc titles through Prime streaming.
It’s black exterior makes it a sleek and masculine device.
Pros:
Our price is very attractive to media junkies, who are very sensitive to price.
Considering the Law of Diffusion of Innovation, young, male media junkies (who love testing new gadgets) can be out early adopters to try our product and push it to the early majority, and so on, thus increasing the success of our product.
Our month long free Prime trial will show media junkies the vastness of the Amazon library, proving the Kindle Fire is a quality media experience.
Cons:
Apple tablet provides a larger screen for a potentially enhanced gaming experience. While it’s much more expensive, media junkies could prefer the iPad experience.
The risk of a mini iPad release could consume this segment, especially if it’s under $200.
The Kindle Fire has a slower processor and smaller screen than competitors, and therefore may not be seen as a true gaming device.

Strategic Alternative Two: To children under the age of 12, Amazon’s Kindle Fire is the epitome of user friendly tablet experiences which provides the best tablet gaming experience for children by offering a bargain price, by being portable, by being hard to break, by having a considerably long battery life, and by having a general size and texture easy for kids to use.
Relevant Facts:
70% of US households own a tablet which is heavily used by children under 12 to play games.
The Kindle Fire is made of Gorilla Glass® and a rubberized coating to make it durable.
Pros:
The Kindle Fire is significantly more durable and over half as expensive as iPads, making it a great alternative for parents to buy for their kids.
Operating on the Android system, there were over 10 billion apps downloaded at the end of 2011.
Amazon is a company with great clout and ethos which parents trust.

Amazon also has other products, like the upcoming release of Alexa, which can pair with the Kindle Fire and read aloud to kids. This is a huge opportunity for lateral expansion and selling companion products.

Cons:

Apple has a 62% market share as of 2011, and the anticipated release of its mini version has great potential to overtake our product, especially if priced competitively.

Considering 70% of homes already have tablets, the market for families interested in purching a new one is limited.

Strategic Alternative Three: To low-budget students in higher education, Amazon’s Kindle Fire is the epitome of user friendly tablet experiences which provides the most comprehensive and affordable online textbook library by offering a bargain price on both the tablet and textbooks, and by consolidating heavy books into one, light device.

Relevant Facts:

B&N has ventured into this segment in 2011, partnering with many universities to offer textbooks at discounted rates (30-50% off).

In 2011, we had a slightly larger market share than B&N (6% and 5%, respectively) (Exhibit 9).

The Kindle Fire is smaller and lighter than the iPad, making it ideal for portability (Exhibit 10).

Our prices are incredibly competitive, reaching $79 just in time for a new school year in September, 2011 (Exhibit

7).
Pros:
Our Prime streaming services allows to students to consolidate work and pleasure into one device.
Our Cross Platform-Ecosystem allows students to access their textbooks on virtually any device (Exhibit 8). This makes accessing textbooks easy, convenient, and user friendly.
Students on a budget will be drawn to the incredibly low price of the Kindle Fire and our free month long Amazon Prime trial. Additionally, we offer a student Prime discount at 50% off.
We offer free cloud storage of products purchased through Amazon, thus providing a seemingly endless supply of storage for textbooks and other reading materials.
Cons:
We would have to dramatically modify the format of the Kindle Fire to allow it to fully display the content of the textbooks.
We would have to establish comprehensive annotation tools.
B&N already established themselves in this market. They have a history of trying to undercut our low prices, and we risk entering a price war with them and losing money. They also offer competitive features like free WiFi in B&N stores, book lending, and more.

Based on my analysis of the situation, I suggest pursuing Strategic Alternative Two and position the Kindle Fire as an ideal tablet for children under the age of 12. The opportunity to tap into new markets to enhance a family’s Kindle Fire experience is too great to pass up. We can now enter a virtually endless market, creating companion products to the Kindle Fire, to enhance the user experience for entire families. Amazon as a company has positioned itself as a family brand, and we have another opportunity to do so with the Kindle Fire.