Flat World Knowledge (Case)
From the teaching note:
Eric and Jeff believed that the college textbook market was dysfunctional in a number of respects. They believed that Flat World’s business model addressed these dysfunctions and had the potential to disrupt the industry status quo. Flat World had experienced significant growth over the past four years. They had received $11.5 million in investments through 2010. In 2011, they received an additional $15 million in funding from several venture partners. They believed that this capital plus the increasing number colleges and universities that had adopted their textbooks affirmed the viability of their business model.
In this case, Eric reflects on some of the problems in the college textbook market and feels the need to revisit a number of questions about Flat World’s business model. Eric asks himself whether or not Flat World should do more to revolutionize the college textbook market and whether or not Flat World is doing all it can to develop capabilities and/or acquire resources that would make its business model difficult for competitors to copy.
Case questions (from the teaching note):
1. How does the college textbook market work? Why, for example, is competition in the college textbook market likely to drive prices up rather than down?
2. What is Flat World’s business model? How is it different from the business models of other college textbook publishers?
3. In what ways could Flat World’s business model be more innovative? Should Flat World try to be more revolutionary? Why or why not?
4. Is Flat World developing capabilities and/or acquiring resources that will make it difficult for competitors to copy its business model? Is there anything they can do to protect their market position and/or prevent competitors from copying their business model?
Instructors: If you’re using the case, please contact me for a copy of the teaching note.