Summary
Lulu.com, founded by Bob Young in 2002 in Triangle Research Park in North Carolina, is a very significant name in the Print on Demand industry (POD). The founder of Lulu.com wanted to expand the name of the company to make it something beyond a Print on Demand Company. He wanted to make Lulu.com such a wonderful marketplace where intellectual properties like art, music, or video could be sold along with books. Bob Young’s vision was placed in the annual brainstorming festival of the company and generated a huge response regarding the forward planning of the company.
Current situation
Lulu.com is browsed and served by MSN, Netscape, and AQL, created and played by Apple’s products, processed by Intel’s chips, searched by Google, and its packages are sold on Amazon. Lulu.com, as they call themselves, “is driven to revolutionize global publishing for the benefit of creators and consumers.” The company has seen this success because of the business model which they presently run. The factors which have contributed to the success of Lulu.com may be listed as follows.
Points of Strength
- Lulu.com allowed anybody to publish their work of art, books, music, or multimedia through their portal by uploading it in a digitized form. The creator has the option to select the style bindings, etc., and set up a selling price. Then the creator can leave the worries of the rest business process on Lulu.com.
- Lulu.com never charges any setup fee for the creator. It charges 20% of every business transaction. Lulu.com has a provision of assigning International standard book numbers to every book and distributing them to other retailers by charging some additional fees. If the creator wants to make the work available for electronic download, it is possible, and that costs the consumer lesser than the hard copy. Again, Lulu.com charges a percentage.
- Though looking like any other online store, Lulu.com has a distinct way of functioning as they take care of both the ends, that is, the creator and the customer. Their inventory contained unique intellectual work not available elsewhere.
- The strength of Lulu.com is its more than 24000 registered users. They have 22000 books on their virtual bookshelves. Every month 2300 new titles were published. Sales in 2005 were $5 million and even more in 2006.
- Lulu had most books in the English language as the consumers and creators were mainly from North America. In 2005 Lulu.com started European expansion and placed representatives in the United Kingdom, Germany, Spain, France, and Italy.
- The company had a flat organizational structure with 35 employees who had no official job designations. They were scattered under different heads, namely, Business, Customer services, Information Technology and Administration. They mainly were from information technology backgrounds, but few were graphic novelists and writers themselves who were previous customers of the company themselves. The model was easy to copy to the offices of the other countries also without any difficulty.
- Employee spirit of the company was absolutely high. The employees used to find out opportunities for promotion of the company.
- Unique intellectual property distribution system: The traditional intellectual property distributors sometimes dissatisfy the consumers and the customers by limiting the knowledge sharing between the two ends. The contents of books are edited if there is the threat of not selling well. Lulu.com has revolutionized the global publishing system. Firstly, they allowed anybody to sell books in various formats, including paperbacks or as CD ROMs and electronic downloads. Secondly, they allowed requests of full or partial contents of more than one book. Thirdly, Creators were given full control over the copyright and the way they wanted to share their work. The creators were free to publish their work in other places also even if they had published it on Lulu.com.
- The work environment of Lulu.com was unique and informal. Every employee was valued equally, and therefore the cooperative and supportive environment persisted throughout. They didn’t even have to wear formal dresses for their office. Everybody was given a say in the annual brainstorming fair to express their views and proposals for the betterment of the company.
Reasons of Concern
The point of concern for Bob Young was that Lulu.com became familiar as a site that publishes a book. Some creators had sent hard copies as manuscripts for publishing. That was a limitation for the promotion of the site as books were only parts of the bigger approach to be taken by the company. The site wanted to become the biggest global free marketplace for intellectual properties and, of course, the most profitable one.
Criteria
The strategies for expanding the business of Lulu.com in a way that they could steadily approach their goal had to be thought carefully. There were options and thoughts from the employees along with the leadership. They put their thoughts in the following ways:
- The company could expand its market in Europe and then to Asia along with America through continuous push in its business and become a global name in the POD market.
- The company could find out new forms of intellectual properties as they needed to shed the identity of a site that publishes a book.
- Some employees were of the opinion that the company should go through its internal processes once in order to determine whether the system is supportive enough to expand globally or introduce newer properties.
Alternatives
Like always, the alternatives were suggested by the employees of the company itself. The employees from different disciplines gave their opinions regarding the forward planning of the company.
- Employee James was of the opinion that it was high time to start the video as that might lead people to subscribe as they do for the cable network.
- The PR person Stephen advocated search engine advertising as that could turn out to be something totally different. The ads go to interested consumers only.
- The controller of the company, Rhonda, stressed the issue of authors’ royalty which had to be addressed as the suitable currency for payment across the borders was difficult to determine.
- Henry, dealing with the customer community, came up with the alternative of not concentrating too much on providing attentive support to every customer of the site. He also emphasized capitalizing on cross-selling opportunities.
Recommendations
Considering the position of the company, it is recommended that the company first should go through the issues that are reasons for concern for the company, like the cross-border authors’ royalties. Then they should introduce new intellectual properties like the video to increase its business opportunities and shed the image of book publishers. They can then expand the company worldwide with all their intellectual properties, including books. One more thing they need to do is to introduce other languages as that would increase their profit when the company expands geographically.
Implementation plans
- The company should prioritize the issues they have to address. First, it should decide which are the problems they are facing, like royalties of authors, and sort out the solution for them.
- The list of new intellectual properties has to be made. The list should be a small one at first and can be made bigger after watching the response.
- The makeover of the site has to be advertised by employees in an innovative way, such as search engine advertising.
- Before going global, the performance of the site has to be watched in the present business areas.
- The first step should be taken in English only, even when going global. After watching the global response, other languages should be introduced one by one.
Plan B
Though the strength of Lulu.com will not let it fail, there should be an alternative plan also. If going global doesn’t create a proper response, it will be better to stay in the present area only for the time being without any new language introduced. But solving the current issues is necessary. Then the introduction of new intellectual properties should be introduced with a little caution so that the sentiments of both creators and customers are valued.