Lulu.com is a leader in the print on demand industry. It acts as a platform for connecting little known authors to consumers. In 2006, they wanted to expand their business. To do so, they had three options before them.
1. Enter new geographic markets like Asia
2. Broaden the product offering to include other forms of intellectual property like music, video, art etc
3. Concentrate on improving the internal processes and systems.
The team had to choose which of the three options they should place more emphasis on.
Option 1: Lulu.com gets a lot of traffic from all around the world. It had already established itself as a leader in the POD industry. Plus, Lulu did not face much competition in North America. To cater to the audience outside America, Lulu.com had set up offices in European countries like United Kingdom, France, Germany, Italy and Spain. The next logical step they felt was Asia. The company did not have any experience with the Asian market. They didn’t know how the market worked or how they should proceed.
Option 2: The website as of right now is widely known as a book publishing website. Within the publishing industry, there were many niche categories that the company did not cater to currently. This led many employees to believe that they should initially develop those niche markets. Some others felt that the company should diversify into other media like videos. There were many dominant players in the video industry but no clear leader had emerged as yet. If the company decided to divest, there could be a possibility that they would lose their focus.
Option 3: The processes of this company were very informal. There was no clear marketing policy. The accounting software was not able to keep up with the work load and the customer service software was becoming obsolete.
It is obvious from the case that to grow, the company needs to expand. There are two methods of expansion that the company can pursue. It can...