One industry with an impact on both undergraduate and MBA students is textbook publishing. On the one hand, traditional printed textbooks are being challenged by self-publishing firms offering very low prices for specific instructor materials, and on the other hand, a need to offer digital resources that substitute printed materials. Large textbook publishers are increasingly investing in adaptive learning systems such as WileyPLUS, Cengage MindTap, and McGraw-Hill Connect. Complicating factors for the publishers is the changing business model of renting textbooks (printed and electronic). U.S. university book rental was projected to top 25 percent of student purchasing volume in 2015.

Use the five forces model (with complements) to think through the various impacts such technology shifts may have on the textbook industry. Include in your response answers to the following questions.

1. How should managers of a textbook publishing company respond to such changes?

2. Will the shifts in technology and business models be likely to raise or lower the textbook industry profits? Explain.