EDUCATION ROUTE: ALEXIS PRODUCTS' SECOND ACT Wenhui lal 15307090037 Course: English for Academic Purposes(Business) Date: 2 January, 2018
1 EDUCATION ROUTE: ALEXIS PRODUCTS’ SECOND ACT Wenhui LAI 15307090037 Course: English for Academic Purposes (Business) Date: 2 January, 2018
EDUCATION ROUTE ALEXIS PRODUCTS' SECOND ACT 1. Background Alexis Products developed a product called the brrrd, the first interactive language-learning tool to incorporate artificial intelligence in the market. Its distinctive feature is the combination of fun and teaching. The Brrrd gained a successful beginning with sales over $3 million in its first year. However, in the next year, the sales declined drastically. Although the attraction of the brrrd came from its combination of fun and function, the falling sales were also due to this dual nature The brrrd was no more a fashion for tide chasers and its limited education function was not appealing to in-depth language learners who have rigid demands for language learning. Facing with the plunging sales performance, Wall Street is losing patient to the Alexis products. Steph, ceo of Alexis Products, has to make a decision for the next direction of Alexis products Mia, the sales manager, and Gregoire, the marketing chief, dispute with the future of Alexis Product. Alexis Product needs to choose a strategy between the fun route and the education route 2. Issues The combination of fun and education can be a highlight of the brrrd as an innovative product at first, but this feeling of freshness could fade quickly under the constantly changing fashion. The success of the Brrrd could be seen as a coincidence for Alexis Products because of the personal experience of Steph and the sudden inspiration from Steph. The plunging sales reveal a lack of orientation of Alexis Products because even the category of the Brrrd is vague between an electronic toy and a language education product. The lack of a clear orientation makes Alexis Products short of a sustainable development method for a long-tern development o the major problem of Alexis Products is: Facing with the sloping sales, which
2 EDUCATION ROUTE: ALEXIS PRODUCTS’ SECOND ACT 1. Background Alexis Products developed a product called the Brrrd, the first interactive language-learning tool to incorporate artificial intelligence in the market. Its distinctive feature is the combination of fun and teaching. The Brrrd gained a successful beginning with sales over $3 million in its first year. However, in the next year, the sales declined drastically. Although the attraction of the Brrrd came from its combination of fun and function, the falling sales were also due to this dual nature. The Brrrd was no more a fashion for tide chasers and its limited education function was not appealing to in-depth language learners who have rigid demands for language learning. Facing with the plunging sales performance, Wall Street is losing patient to the Alexis Products. Steph, CEO of Alexis Products, has to make a decision for the next direction of Alexis Products. Mia, the sales manager, and Gregoire, the marketing chief, dispute with the future of Alexis Product. Alexis Product needs to choose a strategy between the fun route and the education route. 2. Issues The combination of fun and education can be a highlight of the Brrrd as an innovative product at first, but this feeling of freshness could fade quickly under the constantly changing fashion. The success of the Brrrd could be seen as a coincidence for Alexis Products because of the personal experience of Steph and the sudden inspiration from Steph. The plunging sales reveal a lack of orientation of Alexis Products because even the category of the Brrrd is vague between an electronic toy and a language education product. The lack of a clear orientation makes Alexis Products short of a sustainable development method for a long-tern development. So the major problem of Alexis Products is: Facing with the sloping sales, which
route should Alexis Products follow to gain a sustainable profits in the future? 3. Assessment 3. 1 Red Ocean Strategy vs Blue Ocean Strateg Blue Ocean Strategy is a marketing theory from a book published in 2005 which was written by w. Chan Kim and Renee Mauborgne. Professor Kim defines traditional industries as red Ocean while the new born industries are defined as blue Ocean. The main differences between Red Ocean and blue Ocean are presented in Table 1. The Red Ocean represents the market under a fierce competition while blue Ocean means a new profit and growth opportunities Table 1: The main Differences between Red ocean strategy and blue ocean strategy Red ocean strategy Blue Ocean Strategy te in existing Create uncontested market market space Exploit existing demand Create and capture new demand Beat the competition Make the competition irrelevant For Alexis Products, choosing the fun route is Red Ocean Strategy while choosing the education route is blue Ocean Strategy The market of electronic toys has been saturated so it is highly competitive Manufacturers can just exploit existing demand so the competition is drastic. And toy industry is highly mature so the threshold of electronic toy industry is low, which adds to the competition Because of the relatively short product life cycles and compet it ion for consumers I W. Chan Kim, Renee Mauborgne, "Blue ocean strategy, "Harvard Business School Press, (2005):240
3 route should Alexis Products follow to gain a sustainable profits in the future？ 3. Assessment 3.1 Red Ocean Strategy vs Blue Ocean Strategy Blue Ocean Strategy is a marketing theory from a book published in 2005 which was written by W. Chan Kim and Renée Mauborgne. Professor Kim defines traditional industries as Red Ocean while the new born industries are defined as Blue Ocean. The main differences between Red Ocean and Blue Ocean are presented in Table 1. The Red Ocean represents the market under a fierce competition while Blue Ocean means a new profit and growth opportunities. Table 1: The Main Differences Between Red Ocean Strategy and Blue Ocean Strategy1 Red Ocean strategy Blue Ocean Strategy Compete in existing market space Create uncontested market space Exploit existing demand Create and capture new demand Beat the competition Make the competition irrelevant For Alexis Products, choosing the fun route is Red Ocean Strategy while choosing the education route is Blue Ocean Strategy. The market of electronic toys has been saturated so it is highly competitive. Manufacturers can just exploit existing demand so the competition is drastic. And toy industry is highly mature so the threshold of electronic toy industry is low, which adds to the competition. Because of the relatively short product life cycles and competition for consumers’ 1 W. Chan Kim, Renée Mauborgne, “Blue ocean strategy,” Harvard Business School Press, (2005): 240
preferences with other products, innovation is an important element in the business models of toy manufacturers. However, the innovative concepts are easy to be forged by competitors. For example, the well-known construction toy manufacturer found that over 30 Chinese companies were manufacturing similar products like Lego. The hemes of the series of lego blocks were plagiarized by those competitors. Because the inspiration was ready-made, these companies could provide similar toys with a lower price. Just like Lego blocks, the components of the Brrrd are a microphone, a tiny speaker, a headphone jack and computer chips, there is no technical threshold for competitors and they can develop similar products to compete with Alexis Products easily. To maintain the competitive advantages, Alexis Product can either lower the prices of the Brrrd or find another innovative product to attract consumers Education is also a traditional industry, but the combination of language education and al is blue Ocean in the future. The combination of fun and education, with artificial intelligence system, makes the Brrrd a favorable and effective language learning tool. The Brrrd is the first try in this new sector. Although the brrrd is too simple to satisfy the needs from language learners, the reputation has been established since it came out Language education is a lucrative and fast-growing market, especially Chinese education market. According to China Daily, the population of foreign learners of Chinese has been up to 10 million. And the demand of mandarin education is still on growth, so it is a potential market. The combination of fun, education and AI systems can be a new segment in language education market where competition rarely exists In short. for Alexis products the fun route is Red Ocean and it is difficult to establish competitive edge in it, while the education route is a lucrative and potential choice in blue ocean ECSIP Consortium, on the competitiveness of the toy industry, " August 30, 2013 3 BBC "Faked Lego, 25.2017. video file. BBC News ousiness-38740953/fake-lego, accessed December 2017 4 "Mandarin is now ecoming a global language, China daily, September 10, 2017, http://www.chinadaily.comcn/cndy/2017-10/13/content33190519.htmaccessedonDecember2017
4 preferences with other products, innovation is an important element in the business models of toy manufacturers2 . However, the innovative concepts are easy to be forged by competitors. For example, the well-known construction toy manufacturer found that over 30 Chinese companies were manufacturing similar products like Lego. The themes of the series of Lego blocks were plagiarized by those competitors. Because the inspiration was ready-made, these companies could provide similar toys with a lower price.3 Just like Lego blocks, the components of the Brrrd are a microphone, a tiny speaker, a headphone jack and computer chips, there is no technical threshold for competitors and they can develop similar products to compete with Alexis Products easily. To maintain the competitive advantages, Alexis Product can either lower the prices of the Brrrd or find another innovative product to attract consumers. Education is also a traditional industry, but the combination of language education and AI is Blue Ocean in the future. The combination of fun and education, with artificial intelligence system, makes the Brrrd a favorable and effective language learning tool. The Brrrd is the first try in this new sector. Although the Brrrd is too simple to satisfy the needs from language learners, the reputation has been established since it came out. Language education is a lucrative and fast-growing market, especially Chinese education market. According to China Daily, the population of foreign learners of Chinese has been up to 10 million. And the demand of mandarin education is still on growth, so it is a potential market4 . The combination of fun, education and AI systems can be a new segment in language education market where competition rarely exists. In short, for Alexis Products, the fun route is Red Ocean and it is difficult to establish competitive edge in it, while the education route is a lucrative and potential choice in Blue Ocean. 2 ECSIP Consortium, “A Study on the competitiveness of the toy industry,” August 30, 2013. 3 BBC, “Faked Lego,” January 25, 2017, video file, BBC News, http://www.bbc.com/news/av/business-38740953/fake-lego, accessed December 2017. 4 “Mandarin is now rapidly becoming a global language,” China Daily, September 10, 2017, http://www.chinadaily.com.cn/cndy/2017-10/13/content_33190519.htm, accessed on December 2017
3.2 Market Segment Analysis STP(Segment, Targeting and Positioning) analysis can be used to assess the situation of alexis product. the different choices between fun route and education route represent different consumer focuses. The features of different consumer bases determine the operating strategies of a company. the fun route and the education route crater for different customer bases. so the two strategies focus on different market segments(See Table 2) Table 2: Market Segments Analysis between Fun Route and education route Fun route Education route Market Segments Toy market Language education mar Consumer bases Toy lovers Language learners tech-savvies and fashion chasers The features of the. Low brand loyalty High brand loyalty consumer base Consumption level ower Highe According to the fun route, the selling points are not the products itself, but the new concepts behind the products. The target customers are those who like fashion and fun, such as tech-savvies, toy lovers and fashion chasers. Because what the consumers chase is the new concepts behind the product, consumers' loyalty to pecific brand is relatively low As said above, the competition within the electronic toy market is already severe but electronic toy manufacturers are also confronting challenge from other industries The new concepts can be conducted on other products. Customers'preference can be shifted to electronic games, comic books and any other products with new concepts
5 3.2 Market Segment Analysis STP (Segment, Targeting and Positioning) analysis can be used to assess the situation of Alexis Product. The different choices between fun route and education route represent different consumer focuses. The features of different consumer bases determine the operating strategies of a company. The fun route and the education route crater for different customer bases, so the two strategies focus on different market segments (See Table 2). Table 2: Market Segments Analysis between Fun Route and Education Route Fun Route Education Route Market Segments Toy market: Language education market Consumer bases ·Toy lovers, tech-savvies and fashion chasers ·Language learners The features of the consumer base ·Low brand loyalty ·High brand loyalty Consumption level ·Lower ·Higher According to the fun route, the selling points are not the products itself, but the new concepts behind the products. The target customers are those who like fashion and fun, such as tech-savvies, toy lovers and fashion chasers. Because what the consumers chase is the new concepts behind the product, consumers’ loyalty to a specific brand is relatively low. As said above, the competition within the electronic toy market is already severe, but electronic toy manufacturers are also confronting challenge from other industries. The new concepts can be conducted on other products. Customers’ preference can be shifted to electronic games, comic books and any other products with new concepts
With the well development of computers and smart phones, the market share of electronic toy industries is being grabbed by computer games. As the report from ECSIP Consortium showed, in 2016, U.S. toy sales fell by about 8%. Analysts said that physical toys have ceded market share to video-game consoles like Sonys Play Station and other video game platform. The features of customers of electronic toys bring an unstable profits and fierce competition to the industry In the education route, the potential consumers are language learners. What they focus on is the tangible benefits of products. The consumers in the language education show loyalty to a specific brand. The learning process of a language is long-term and gradual consumption, so the language learners should rely on a set of studying methods for a long time. If the teaching methods are embraced by consumers, they are willing to spend money on the specific brand consistently. Once Alexis Products develop a feasible teaching method on the brrrd, this can be a core competency for the brrrd From the perspective of market segments, the customer base of language education market is more stable due to the higher loyalty and exuberant consumption 3.3 Cost-Benefit Analysis The cost is an essential factor for the strategy decision of Alexis Products. Facing with the sloping sales of the brrrd the investors are anxious and eager to recoup their Investment In this situation, the fun route is a relatively"inexpensive route for the investors The hardware of electronic toys will not be complicated so the costs are low. The problem is whether Alexis Products can provide appealing new concepts consistently or not. In Alexis Products, the hit ideas are mainly from Steph previously, but since she had participated in the management activities, her inspiration of novel concepts has been exhausted. Alexis Products have a substitute plan that they can recruit employees who are particular for thinking of new ideas. These costs are still relatively S ECSIP Consortium, "A Study on the competitiveness of the toy industry, "August 30, 2013: 43
6 With the well development of computers and smart phones, the market share of electronic toy industries is being grabbed by computer games. As the report from ECSIP Consortium showed, in 2016, U.S. toy sales fell by about 8%. Analysts said that physical toys have ceded market share to video-game consoles like Sony’s PlayStation and other video game platform. 5 The features of customers of electronic toys bring an unstable profits and fierce competition to the industry. In the education route, the potential consumers are language learners. What they focus on is the tangible benefits of products. The consumers in the language education show loyalty to a specific brand. The learning process of a language is long-term and gradual consumption, so the language learners should rely on a set of studying methods for a long time. If the teaching methods are embraced by consumers, they are willing to spend money on the specific brand consistently. Once Alexis Products develop a feasible teaching method on the Brrrd, this can be a core competency for the Brrrd. From the perspective of market segments, the customer base of language education market is more stable due to the higher loyalty and exuberant consumption level. 3.3 Cost - Benefit Analysis The cost is an essential factor for the strategy decision of Alexis Products. Facing with the sloping sales of the Brrrd, the investors are anxious and eager to recoup their investment. In this situation, the fun route is a relatively “inexpensive” route for the investors. The hardware of electronic toys will not be complicated so the costs are low. The problem is whether Alexis Products can provide appealing new concepts consistently or not. In Alexis Products, the hit ideas are mainly from Steph previously, but since she had participated in the management activities, her inspiration of novel concepts has been exhausted. Alexis Products have a substitute plan that they can recruit employees who are particular for thinking of new ideas. These costs are still relatively 5 ECSIP Consortium, “A Study on the competitiveness of the toy industry,” August 30, 2013:43
lower than a reform of the technology system of prodr hough the fun route requires a relatively lower expense, the future benefits are uncertain. The product life cycle of toys is short so the producers should refresh their product lines frequently and the profits gained from one particular product are unsustainable. Once the concepts on the product are outdated the attraction of the products will be depleted and Alexis Products should have to seek another new concept for their next step. However, the acceptance of new concepts on products is just like lotteries. If the new products fail to attract the targeted consumers, Alexis Products will be on a negative position. In the fun route, the outcomes of fun route are unpredictable and risky In the education route, a large quantity of research and development(R&D) investment should be required. According to MGl, nearly 60% of enterprises which developed aI systems are experiencing deficits in Al projects. Alexis Products has experienced sloping sales in the last year so the investors are more prudent on the Investment However, as said above, the combination of Al and language education is bl Ocean. As the report from MGI showed, education is the"low AI adoption"sector, which means that once Alexis Products can make a breakthrough in this sector. it can establish a unique competitive edge for Alexis products. The advanced technology a guarantee for stable attraction and sustainable profits. The large investment is temporary, but the market share and brand loyalty can be beneficial for a long time 4. Solution So far this paper has focused on the situation of Alexis Products. The following section will move on to consider the solutions for Alexis products. After blue ocean analysis, STP analysis and the cost-benefit analysis, the education route is the answer to Alexis products' future To conduct this route for Alexis products there are two Mckinsey Global Institute, " Artificial intelligence: the next digital frontier, June 2017: 48
7 lower than a reform of the technology system of products. Though the fun route requires a relatively lower expense, the future benefits are uncertain. The product life cycle of toys is short so the producers should refresh their product lines frequently and the profits gained from one particular product are unsustainable. Once the concepts on the product are outdated, the attraction of the products will be depleted and Alexis Products should have to seek another new concept for their next step. However, the acceptance of new concepts on products is just like lotteries. If the new products fail to attract the targeted consumers, Alexis Products will be on a negative position. In the fun route, the outcomes of fun route are unpredictable and risky. In the education route, a large quantity of research and development (R&D) investment should be required. According to MGI, nearly 60% of enterprises which developed AI systems are experiencing deficits in AI projects6 . Alexis Products has experienced sloping sales in the last year so the investors are more prudent on the investment. However, as said above, the combination of AI and language education is Blue Ocean. As the report from MGI showed, education is the “low AI adoption” sector, which means that once Alexis Products can make a breakthrough in this sector, it can establish a unique competitive edge for Alexis Products7 . The advanced technology is a guarantee for stable attraction and sustainable profits. The large investment is temporary, but the market share and brand loyalty can be beneficial for a long time. 4. Solution So far this paper has focused on the situation of Alexis Products. The following section will move on to consider the solutions for Alexis Products. After Blue Ocean analysis, STP analysis and the cost-benefit analysis, the education route is the answer to Alexis Products’ future. To conduct this route for Alexis Products, there are two 6 Mckinsey Global Institute, “Artificial intelligence: the next digital frontier,” June 2017: 48 7 Mckinsey Global Institute, “Artificial intelligence: the next digital frontier,” June 2017: 79
lesions. 4.1 Focus on professional language education In the education route, as Gregoire said, Alexis Products should hire language experts to develop professional teaching methods for the Brrrd and employ computer experts to develop a powerful AI system for the Brrrd. Since they are all elites in their industries, the investment will be large. However, this investment is worthwhile and is beneficial for the long-term development of Alexis Products For the sales department of the Brrrd, the experts and the advanced technology adapted on the Brrrd are endorsement for the Brrrd. According to a research report the endorsement of experts is a feasible marketing strategy and 46% of customers are willing to pay a higher price for the language teaching method endorsed by authorities. For sales department, the experts can be a selling point in their commercials, which can shape a professional image in consumers' minds In terms of competitive edges, these experts are precious assets for Alexis Products. The operating pattern of traditional language education companies confronting a problem that they highly rely on teachers and the teaching methods are easy to replicate. In China, New Oriental is the largest language education companies The courses in new east depend on teachers'instruction. In New Oriental,to guarantee the teaching quality, teachers should be trained in a standardized system lowever, once the teachers specialize in the teaching methods, they can switch their jobs for more generous salaries or even establish new institutions as market rivalries of New Oriental. For Alexis Products, this is not a challenge. Although the new Brrrd's research and development still rely on the experts'intelligence, the new system will be built by a group of experts from different domains- such as AI experts and education experts. This core competency cannot be replicated due to the loss of several personnel and the competitor is difficult to conquer the technical thresholds in marketisation of education: Marketing, rhetoric and reality, " Journal of Further and Higher Educati 2009):5 面临人才流失的困境”凤凰网教育, March27,2017 http:/edu.ifeng.com/a/20150327410258950.shtml,accessedonDecember2017
8 suggestions: 4.1 Focus on professional language education In the education route, as Gregoire said, Alexis Products should hire language experts to develop professional teaching methods for the Brrrd and employ computer experts to develop a powerful AI system for the Brrrd. Since they are all elites in their industries, the investment will be large. However, this investment is worthwhile and is beneficial for the long-term development of Alexis Products. For the sales department of the Brrrd, the experts and the advanced technology adapted on the Brrrd are endorsement for the Brrrd. According to a research report, the endorsement of experts is a feasible marketing strategy and 46% of customers are willing to pay a higher price for the language teaching method endorsed by authorities 8 . For sales department, the experts can be a selling point in their commercials, which can shape a professional image in consumers’ minds. In terms of competitive edges, these experts are precious assets for Alexis Products. The operating pattern of traditional language education companies is confronting a problem that they highly rely on teachers and the teaching methods are easy to replicate. In China, New Oriental is the largest language education companies. The courses in new east depend on teachers’ instruction. In New Oriental, to guarantee the teaching quality, teachers should be trained in a standardized system. However, once the teachers specialize in the teaching methods, they can switch their jobs for more generous salaries or even establish new institutions as market rivalries of New Oriental.9 For Alexis Products, this is not a challenge. Although the new Brrrd’s research and development still rely on the experts’ intelligence, the new system will be built by a group of experts from different domains- such as AI experts and education experts. This core competency cannot be replicated due to the loss of several personnel and the competitor is difficult to conquer the technical thresholds in 8 Steph Newman. “Marketisation of education: Marketing, rhetoric and reality,” Journal of Further and Higher Education, (March 2009): 5. 9王尚喆, “新东方面临人才流失的困境,” 凤凰网教育, March 27, 2017, http://edu.ifeng.com/a/20150327/41025895_0.shtml, accessed on December 2017
a short time 4.2 Leverage Differentiation Strategy for products Once Steph chooses the education route, the current problem for Alexis Products is the short-term profits. Indeed a language education tool combined with al system is the goal of education route, but a mature al product needs a long research cycle to develop, which means in a short time Alexis Products cannot provide an advanced product to the public. Alexis Products need a product for this transition period The Brrrd had already established a reputation for injecting fun into education, so Alexis Products can utilize this advantage. Alexis Products can develop a primary product, still funny, but endorsed by language education experts, in the transition period by the advanced product. As Stephs view, since kids were a natural audience for language learning, the primary products can be appealing in the elementary school market. Still, for those new learners, a relatively inexpensive and funny product can stimulate their interest in language learning and establish potential customer bases for The advanced products will be the core competency of Alexis Products. Their targeted customers are the in-depth language learners and the selling point is the interactive methods of AI system. according to David mcauthor, the combination point of education and aI is the interactive feature of AI system. With the help of Al ystem, the brrrd can communicate with users, transfer teaching information and correct the mistakes of users. The AI system also means that the Brrrd can offer individualized teaching plans for different users. In language education sector, the one-on-one tuitions are high-end services but also the relatively expensive service For instance, in New Oriental, the VIP courses of ToEFL (8 in a class)charge for 35, 700 yuan while the normal courses of TOEFL(24 in a class)charge for 6,000 yuan. Personalized education is a lucrative branch in education sector. Once Alexis Products develop a feasible teaching method for language learners, they can grab a 10 David Mcauthor, "The Roles of Artificial Intelligence in Education: Current Progress and Future Prospects Journal of Educational Technology, (January 2015): 52 ThesedataisfromtheofficialwebsiteofNewOrientalhttp://www.xdfcn,accessedinDecember2017
9 a short time. 4.2 Leverage Differentiation Strategy for products Once Steph chooses the education route, the current problem for Alexis Products is the short-term profits. Indeed, a language education tool combined with AI system is the goal of education route, but a mature AI product needs a long research cycle to develop, which means in a short time Alexis Products cannot provide an advanced product to the public. Alexis Products need a product for this transition period. The Brrrd had already established a reputation for injecting fun into education, so Alexis Products can utilize this advantage. Alexis Products can develop a primary product, still funny, but endorsed by language education experts, in the transition period by the advanced product. As Steph’s view, since kids were a natural audience for language learning, the primary products can be appealing in the elementary school market. Still, for those new learners, a relatively inexpensive and funny product can stimulate their interest in language learning and establish potential customer bases for the advanced products. The advanced products will be the core competency of Alexis Products. Their targeted customers are the in-depth language learners and the selling point is the interactive methods of AI system. According to David Mcauthor, the combination point of education and AI is the interactive feature of AI system10. With the help of AI system, the Brrrd can communicate with users, transfer teaching information and correct the mistakes of users. The AI system also means that the Brrrd can offer individualized teaching plans for different users. In language education sector, the one-on-one tuitions are high-end services but also the relatively expensive service. For instance, in New Oriental, the VIP courses of TOEFL (8 in a class) charge for 35,700 yuan while the normal courses of TOEFL (24 in a class) charge for 6,000 yuan 11 . Personalized education is a lucrative branch in education sector. Once Alexis Products develop a feasible teaching method for language learners, they can grab a 10 David Mcauthor, “The Roles of Artificial Intelligence in Education: Current Progress and Future Prospects,” Journal of Educational Technology, (January 2015):52. 11 These data is from the official website of New Oriental, http://www.xdf.cn/, accessed in December 2017
large market share from other language education companies. The Brrrd has advantage for its AI system, which means the brrrd can break through the restrictions of space and time. Once the technology is matured, Alexis Products can obtain dvantageous scale effect in its production and the marginal cost of production will gradually increase, providing sufficient profits and a price reduction space confronting latecomers'competition Based on electronic devices, the brrrd can also be developed to a platform with more function in the future. such as. music. reading or other functions. Nevertheless the education should still be the main function for the brrrd and the diversified strategy can be seen as a supply product to enrich the product lines of Alexis Products The similar case is Kindle Fire published by Amazon. Kindle Fire is a pad with a large scope of functions, rather than just focusing on reading. Although the overall rformance of Kindle Fire cannot be compared with Apples IPad, Kindle Fire contains the key technology of Kindle readers-Ink screen, which can provide an enjoyable reading experience like ordinary paper books. Due to its distinctive reading experience, Kindle Fire was favorable by reading fans. The diversified functions aim at an extensive customer bases, but the core competency should still be the distinctive function of the company In short, the differentiation strategy takes account of the short-term profits and long-term development for Alexis Products. The primary product helps expand customer bases and the advanced product is the core competency 5. Conclusion For Alexis Products and other newly established companies, riding the popularity of a great first product is easy but finding the next one is hard. The dual nature of the Brrrd was appealing at first, but it also brought a vague orientation for the next step The decision of operation strategy should consider both the short-term interest and the 12 Jay Yarow, "Amazons Impressive Success With The Kindle Fire, "Business Insider, March 7, 2014 http://www.businessinsider.com/amazon-kindle-web-trafic-2014-3,accessedinDecember2017
10 large market share from other language education companies. The Brrrd has its advantage for its AI system, which means the Brrrd can break through the restrictions of space and time. Once the technology is matured, Alexis Products can obtain advantageous scale effect in its production and the marginal cost of production will gradually increase, providing sufficient profits and a price reduction space confronting latecomers’ competition. Based on electronic devices, the Brrrd can also be developed to a platform with more function in the future, such as, music, reading or other functions. Nevertheless, the education should still be the main function for the Brrrd and the diversified strategy can be seen as a supply product to enrich the product lines of Alexis Products. The similar case is Kindle Fire published by Amazon. Kindle Fire is a pad with a large scope of functions, rather than just focusing on reading. Although the overall performance of Kindle Fire cannot be compared with Apple’s IPad, Kindle Fire contains the key technology of Kindle readers-Ink screen, which can provide an enjoyable reading experience like ordinary paper books. Due to its distinctive reading experience, Kindle Fire was favorable by reading fans12. The diversified functions aim at an extensive customer bases, but the core competency should still be the distinctive function of the company. In short, the differentiation strategy takes account of the short-term profits and long-term development for Alexis Products. The primary product helps expand customer bases and the advanced product is the core competency. 5. Conclusion For Alexis Products and other newly established companies, riding the popularity of a great first product is easy but finding the next one is hard. The dual nature of the Brrrd was appealing at first, but it also brought a vague orientation for the next step. The decision of operation strategy should consider both the short-term interest and the 12 Jay Yarow, “Amazon's Impressive Success With The Kindle Fire,” Business Insider, March 7, 2014, http://www.businessinsider.com/amazon-kindle-web-traffic-2014-3, accessed in December 2017