Will Bury Goes Global

Will Bury Goes Global

Introduction
The current business scenario is related to Will Bury, who has developed and patented a technology to transform word for text material into realistic, albeit rather synthetic audio file. He is currently in a salaried employment, but he is strongly considering devoting full time to this entrepreneurial initiative in order to develop it in extent.

Economicconcepts to consider
To identify, analyze and address on an economic perspective the situation, it’s essential to start from the premises that human desires are insatiable, and resources are limited. In Economics, resources are classified into property, which in this particular case would be represented by Will Bury’s capital, and human represented by his entrepreneurial ability of makingbusiness-policy decisions and innovating, and the labor required to perform the manual work of digitalizing the text, setting up the online store platform, business accounting, etc. Understanding than these resources are scarce, Will needs to employ efficiency in his business model by seeking to achieve full production of his product/service in the least costly way and allocating the availableresources in those areas where the most impact is likely to be accomplished for the desired outcome. Allocative efficiency refers to operating with the highest-valued mix of goods and by expanding the production of the product until its marginal benefit equals its marginal cost.

He must understand that he will be taking part in a Market System where the economic activity is coordinated and directed bysupply and demand, competition, and consumer’s rational choice. The alternate-reading market of audio books already has its actors playing their part on the screenplay. Will is aware of the presence of substitute products comparable to his offering. The industry currently offers 500-page books on CD for around $20. The larger the number of close substitutes, the more expandable the priceelasticity of demand given the substitutability of the product (p.362 McConnell and Brue, 2005) The degree of necessity is a determinant factor of its own elasticity, meaning to say that if consumers feel that buying digitalized audio versions of the favorite books is not really a necessity, even if the price is relatively low, they tend to chose other traditional substitutes.

The digital contentbusiness for books
Let’s try first to recognize the value of an audio book in the book market in order to understand the business properly. Audio books allow readers to extract contents from all types of books by hearing a narrated recording from an audio source while on the go (i.e. jogging, shopping, in the car, etc), an alternative to traditional print that has been around since vinyl records. Bigpublishers and several other Internet companies such as have already seen this opportunity and have been doing business for a while. There are even many web sites offering free audio book contents online. That said, it is important to define clearly the real value proposition as a differentiator from Will’s initiative in other to stay alive.

The era of printed books has been evolving sincequite some time now. For instance, a new ‘Harris Interactive’ survey published in September 2011 finds swelling interests in e-books and rapid adoption of e-reading devices in the US. An e-book is basically a book-length publication in digital form readable on computers or other portable electronic devices. Harris Interactive concluded on the study conducted with 2,183 American adults that 10% ofAmericans purchased between 11 and 20 (traditional) books, whereas 17% of e-reader users purchased between 11 and 20 books.

Economists describe latent demand as the industry earnings of a market when this same market becomes accessible and attractive to serve by competing firms and it is measured by the potential industry earnings (PIE) or total revenues, if the market is served in an...