SWOT analysis, PESTEL Analysis and Competitor Analysis for Old

Books:
Group Members:
Pusendra Chaudhary(12)
Avineak Duwal(16)
Arpan Mahatra(28)
Bishal Sarangkoti(45)
Pranish Shrestha(51)

SWOT Analysis:
Based on the conclusion obtained through project discussion, the idea was processed through SWOT
analysis to detect the organizational internal and external as well as positive and negative aspects the idea
carries with it. Following were the points derived:
1. Strengths (Internal and Positive):
● Use of Technology: Leveraging technology like mobile apps and web apps to form a model that
can combine the vast ​collection of second-hand books vendors giving us a great supplier side.
● Partnering with second-hand books vendors: Through this, we will be able to provide books at
much lower rates than fresh books. We don’t have to worry about stock for books for renting
books to customers.
● Tech-Savvy Marketing: With the use of technology at every facet of the business like mobile
apps, online/digital marketing can attract more number of student customers.
● Minimum physical assets & less overhead charges on warehouses as we connect many sellers.

2. Weakness (Internal and Negative):

● Rely on a third party delivery services company for delivering books which can increase logistics
cost too much.
● Evaluation of returned books: Determining quality of returned books condition for its suitability
for the next renting.
● Disposal of degraded books whose conditions won’t be suitable for renting anymore.
● Unrealized revenue: Revenue is only realised on rented books when it's returned and not soon as
the service is accepted.
● Non-standard price across a nation: Since the business is dependent on local vendors, the process
will vary across different regions of the country.
● Lack of funding for initial setup.

3. Opportunities (External and Positive):

● Economic condition of Nepalese students: Most of the students of Nepal come from low-medium
income group families. So, Nepal is a great marketplace for second hand books.
● Connecting readers With sellers. For example: A final year student has a text book of C++ and a
first year student wants to rent the book or buy the book. We can help them connect by our online
 platform and can earn revenue.

4. Threats (External and Negative):

● Cyclical nature of demand : The orders will be highest in the new Session starting every year as
students will be graduating from one class to another and will be decreasing throughout the year
will give the business cyclic nature.
● Threats of new entrants: As the entry barrier is low in this industry, it can generate threats of new
entrants.
● Unavailability of all the books in the second hand market during peak times (new session
starting).
● Arrival of online books stores like Amazon books will decrease the demands as Amazon books
give huge discounts on fresh books.
● Competition with local second hand book sellers in nearby areas.
● Accessibility of substitutes like e-book, Kindle.

PESTEL Analysis:
The entrepreneurship idea is in the initial stage thereby not getting affected by macro forces now that can
affect an organization in future. These could be measured by PESTEL analysis which are discussed as:
1. Political Factors:
● As this firm is mainly based on delivery, government’s lockdown and curfew like in covid-19
condition and mass agitation could hamper it’s main source of revenue i.e. transportation.
● Having the high level staff related to a political party could secretly influence the decision of the
firm leading to individual’s good and party’s good before firm’s.
● Press would always look for new news and could openly violate some methods thereby
influencing the people’s trust.
● Delivering items to places with criminal identities means danger for the staff.

2. Economic Factors:
● There is always a danger of loans from banks, investments and time for firms to pay back those
costs with interest.
● In the initial phase, labor costs should either be high or founder and co must make labor trust on
organization’s objectives that would benefit labourers highly in future.
● The idea shouldn’t add to the unemployment rate of the nation.
● There are colleges and schools getting commission from new books suppliers.

3. Social Factors:
● Rich communities of places like Pokhara and Kathmandu show interest in new books.
● Illiterate localities even from urban areas never have love for reading.
● There are minorities especially old people and religious groups who would afford old books only
that no one reads except them which could show discrimination if not delivered.
● Festivals bring seasonal expectations like discount packages.
 4. Technological Factors:
● Pirated pdfs are taking over books and people have started getting used to them already.
● Many students desire limited slides in laptops rather than whole books.
● Instance automation and human-technology interaction for orders, deliveries and rent would bring
reviews in the market.
● Technological awareness of new platforms is tedious for all at the beginning.

5. Environmental Factors:
● Stored books get destroyed by termites so books should be delivered and stored even for small
duration in cleanest places.
● Still books bought would get junked into fire leading to carbon emission.
● Disasters like floods and landslides could pause deliveries.
● Packages like jute bags instead of plastics would cost more but are expected by many NGOs and
even the Nepal government for deliveries.

6. Legal Factors:
● Security of customers’ profiles and privacy policies are hard to expect when criminals could hire
international hackers even for a day.
● Health and safety regulations of staff should be guaranteed initially.
● Labor law won’t allow staff to do overtime which would hamper the initial stage when more
works are to be performed for establishing stable organization.
● Advertising standards and limits could slow down people’s awareness over the market with big
publications houses.

Competitor Analysis
We have identified three main competitors, which are operating in the old books model.However these
competitors lack a differentiated business model and are basically online shops trying to sell books.

Factors Puranobooks.com Amazon.com Booksmandala.com

Location Currently in Pokhara Worldwide but Currently in major cities

currently not in Nepal
Availability Book Available only if Book Available only if
present in Puranobooks present in Amazon
inventory. sellers inventory.
Target group Main Focuses on Targets a wide variety
academic books ranging of people ranging from
from primary level upto preschool student to
master level. master level students,
literature fan to
of Nepal
Book Available only if
present in Booksmandala
inventory.
Targets the students and
people of Pokhara.
 fictional fan,
technological to sci-fi
books.

Delivery Yes Delivers at given Delivers to major cities

address

User Experience Not very intuitive Responsive, easy check Not user
out. Friendly,Responsive
website
Ordering (Searching Cash on delivery Offers Cash On Offers Cash On Delivery
and Placing Orders) Delivery and Online and Online Payment Mode
Payment Mode
Price Every book is sold at Price of books varies Every books have
40% to 60% of its from the publications, different selling price. The
original price. Books availability, condition, price of the book ranges
prices varies depending format and region. from RS 100 TO RS
on the conditions of the 10,000.
books.

Service Type Single point Buy and Buy Sell and Rent Used Single point Buy and Sell
Sell books Books books
Return Policy No Return Policy We offer 7 days return Return if books are
policy damaged/incorrect.

Feedback There is a form to There is an option to feedback form provided

provide feedback and provide feedback and
rating on each book . rate the book in every
But the option doesn't book page.
seem to be used yet.

Table 1. Competitor Analysis

Porters’ Five Forces
Porter Suggested to have a close look at your rival and always understand your supplier and buyer
thoroughly to maintain your status in the market, introducing ‘Porters’ Five Forces Model’.
I. Competitive Rivalry: Low
Competitive rivalry tries to indicate how strong our rivals are and also to point out the difference
in service provided by our rivals and us.
What is the competition?: After a competitive analysis of our business plan, we found two companies
that had some common ideas and motives just as ours in the market. Those two companies were
Puranobooks.com and Booksmandala.com. Other competitors include the traditional book shops vendors
located at Newroad that have facilities of buying and selling old books offline.
Websites like Puranobooks.com and Booksmandala.com, even though they buy and sell second hand
books, they don’t provide books for rent. Even though customers have the substitute of buying second
hand books from other vendors there is no rental system for books. That's where our company ‘Old
books’ come in. We will collect old books from door to door of the customers and even we rent the books
to customers.
Switching Cost:​ The consumer in the market end has no switching cost for the services. One can choose
any services for buying second hand books whether it is our venture or BooksMandala or PuranoBooks or
second hand books shops of New Road or any vendors. As we will collect books from door to door or
collect books from our various books stations, this would make it easy to sell books for books sellers to
our vendors. As for consumers we will provide verified, undamaged books at low cost that of new books .
We even provide options for renting books at low cost which may help those readers who don’t want to
buy books.
Customer Loyalty:​ The quality of services we provide is different and better for both buyers and sellers
compared to other ventures. We will provide quality books and establish ourselves as a brand in the future
which will gain trust and loyalty from the consumers' end. Also, our service of renting books will benefit
those who don’t want to buy books. Though the other ventures have been providing their services for a
long time and have gained some customer loyalty, we on the other hand have the potential to lure them to
be loyal to our service.

II. Supplier Power​:​ ​Low

It refers to the power and control the supplier has to raise or reduce the quality product or services
quality which in turn could affect an organization's profitability. The factors affecting the suppliers power
or bargaining power of suppliers are:

Number of suppliers: ​The fewer the number of suppliers, greater the supplier power. If suppliers are
more in number, suppliers should compromise on the selling power with competitive pricing to attract the
customers. There are only three firms providing services similar to our firm in Kathmandu, namely
Amazon (inner market through international vendors), BooksMandala and PuranoBooks. Some small
shops are also providing similar services but are limited to store only and don’t have online services. The
number of suppliers i.e. the book sellers is initially less which increases the bargaining power in the
beginning. But once the firm is well established, the suppliers have competition but our commission rate
remains intact. Ultimately, suppliers’ bargaining power decreases.

Supplier concentrations: ​Kathmandu valley has major numbers of academic institutions. Though being
the case, there are less people who would supply books through websites in the beginning. The supplier
concentration isn't high as compared to the demands from the large number of academic institutions. With
an unsatisfied number of students, it would be difficult to win their trust at first. So the bargaining power
is high in this context which means commission is relatively less in the beginning. This could change in
less than two years

Switching cost: ​Our firm doesn't have a huge membership cost in the beginning for services of only
selling books. It's free to browse application and website and get the only service needed. If a user is
unsatisfied with our service, there is no loss for him/her to switch to other services. Puranobooks is
providing similar service without any membership payment but is too limited in delivery services. So, the
switching cost is low, which decreases the bargaining power of suppliers.

Available substitute: Puranobooks and Booksmandala provide identical services. One can choose among
any of the services providers. Other substitutes such as Hamrobazar and Amazon provide similar services
which increases bargaining power.

Strength of distribution channels: ​Old books services are provided through an app, website and through
some stalls and shops near educational institutes. Website and app is easily accessible as long as one has
internet and even for those without internet, the stalls and shops will provide excellent services. The
strength of distribution channels of other companies is not that high which decreases the bargaining power
of suppliers.

Uniqueness of supplier product: Old books provide services like renting books while sharing the profit
with the original book owner. This service is unique to any similar competitors in the market. It will
attract a lot of suppliers who are looking to rent a book for a limited time. Other than that the stalls are not
common either. The two services are unique and it decreases the suppliers’ bargaining power.

III. Buyer Power: Low

The power of customers from choosing between competitors to using study of services provided
by competitors to lower prices of the company they depend upon comes under buyer power. The ultimate
goal of considering buyer’s power is getting best loyalty from customers.

Number of customers: Books are part of everyday lives mostly for students from Kathmandu valley,
university students, students from remote areas that couldn’t afford non-updated new editions of
publications. Novels and inspirational books are desired by both youths and old citizens in search of busy
routine. Ordering books online would initially be a difficult task with limited manpower but it is still
approximated to be 50 customers per day from one institute area. With 5 staffs’ residences in 5 similar
institutes around Kathmandu valley, it could be around 250 customers per day.

Size of each order: The firm has its target not only to sell but rent books. The average price of a new
book is Rs.500 from novels to courses. Old books might cost Rs. 300 per book for buyers. Customers buy
books in bundles i.e. 2 books on average per order. At the same time renting books is mostly not in the
bundle for novels. But renting books for courses occurs in the number of 5 on average.

Difference between competitors: While Puranobooks has limited services and less handy website, we are
planning to have an android application and 5 staffs in 5 locations initially. Booksmandala is only a
competition for online services. With the renting system, we have advantage over book firms.

​ urely, customers are price sensitive when they buy from regular book stationaries.
Price sensitivity: S
However, ordering books online with mutual understanding between book sellers and book buyers means
this won’t be a problem for the firm. We work on commission of deals established.

Ability to substitute: It is always known that books could not be replaced unless traditional examinations
are replaced by practical approaches. For researchers and novel readers, books are interests. There are
illegal printing of course pages from books and using pirated pdfs rather than books. Thus, buyers could
substitute the firm services in the wrong way. Still, recent data and we, as our experience know that pdf
and slides reading aren’t feasible methods for people. Thus, the firm would always have an edge over
pirated methods.

Cost of changing: There is no cost of getting substituted to new methods. Customers would get back their
initial security deposit of Rs. 1000, the price upto which they could rent books and not return. They could
lose money if they don’t return rent books or pay a price for damaged ones. However, they could easily
realize that other methods are expensive for a long term basis.

IV: Threat of Substitution: Low

A substitute product is one that may offer the same or similar benefits to a company as a product
from another industry. The threat of a substitute is the level of risk that a company faces from replacement
by its substitutes.
Substitute Performance: The direct substitute to our venture would again be the online platforms like
Puranobooks and Booksmandala which are online platforms to buy and sell books. After analysing the
potential competitors, we found these two services don't have a user friendly interface and work in a buy
and sell model. In contrast our product works in buy, sell and rent model. The physical old books store
can be the other potential substitutes to our product, but since they are not online and lack delivery
service, there is little or no chance that customers will switch over.
Product Quality: O​ ld books are checked before delivery. If the quality of the substitute product is inferior
compared to our product, then the customer tends to switch over to other products. Analyzing the present
scenario in our country, there are two firms working in the area of trading old books but they still lack to
provide proper user experience and many books have lost pages which customers only discover later.

Substitute Availability: ​When analyzing the substitutes in the market, there are few similar ventures for
buying and selling and no ventures for renting books. So there is very little risk of losing the customers.

V. Threat of New Entry : Moderate

New entrants in a market bring new capacity and desire to gain market share. New entrants are
often accompanied with new ideas and strategies that may attract people and hence become a threat to any
existing organizations. There are many barriers for an entrant to get into the market and profit with the
services and product it produces. Such barriers are:

Time and Cost of the entry: ​Given the nature of the business, there is always a thread of new entrants as
it is relatively less costly to enter the market and set up operations. There is no additional cost required to
set up any initial physical stationaries in locations.

Economies of scale: T ​ raditional established physical stores can easily move into online retailing and
bring their substantial consumer base with them. New competitors entering the marketplace can either
threaten or decrease the market share and profitability of existing competitors and may result in changes
to existing product quality or price levels.

Customer Loyalty: ​In this business we will find few loyal customers. Many customers will choose the
platform providing books or pdfs at a cheap cost. Nowadays people buying books are also decreasing in
percentage of population but not in population.