Amazon's Kindle

2) What were the key success factors for Amazon's Kindle? What made Amazon differ from the other companies that failed to introduce their electronic readers?

The ultimate KSF for Amazon's Kindle can be condensed into one: building the ecosystem in the eReader market. Amazon didn't see that the device is just a device for reading books, it rather utilized the device as the business platform. Not just selling the device, the company carefully examined how to maximize the eBook reading experience for customers: the company designed the device which provides better reading experience than the paper-book, provides affluent contents and lastly enhanced the accessibility to networks which makes easy book downloading whenever customer wants. By establishing the ecosystem, Kindle nurtured Amazon's business as the device strongly mediated the contents providers and the readers. As the more contents providers are in the Kindle's platform, naturally the more customers enter into the platform and in return, the more providers jump into the market. This is a typical cross network externality in the two sided platform business. That's why Amazon sells the device with the price which is equal to the cost or less.

Let's take a look the more details of its KSFs.

• Maximizing the cross network externality

- By establishing the ecosystem, Kindle nurtured Amazon's business as the device strongly mediated the contents providers and the readers. Once users purchase the device, they become very dependent on contents in Amazon app store. Also, as more customers enter into the platform and in return, the more providers jump into the market. With more end-users and contents providers, Amazon has retained its market strong position.

• Focusing on its core capabilities

- While the other players such as Apple and Samsung produce tablet PCs, Amazon just produces the electronic book reader which is highly related to its core business and capabilities. Since the company has been in the online bookselling market from its start-up, it knew the market & customers very well.

• Understanding