Barnes And Noble Case Analysis Essay
Cassie Bruce
Anderson University
Barnes & Noble Case Analysis
Fall 2014
To: CEO at Barnes & Noble
From: Cassie Bruce
Re: E-book Conflict
Date: October 26, 2014
Introduction/Environment In today’s market, there is an advent of e-books and e-reader devices. Amazon, the leader in the e-reader industry, has introduced the Kindle and Kindle Fire to the market, which allows readers to download books at a lower cost and with ease. Several e-readers and e-book devices from Sony, Apple, and Samsung have been introduced; yet have not seen success as the Kindle from Amazon. With the rapid growth of business through internet sales, there is an opportunity to compete within this e-book market …show more content…
and develop new marketing and sales channels. The biggest competitors are Amazon and Apple. Microsoft has agreed to invest $300 million in Barnes & Noble, as well as offer the Nook application on Windows 8 operating systems in exchange for equity.
Problem Two problems are present in the issue of Barnes & Noble in the decision of which course to take in the e-book market. There must be a decision of the operation style of the business: will it continue its traditional, in-store, operations, along with the digital market all under one business operation. Or, should Barnes & Noble create a separate division to operate the digital market and make decisions independently. The second issue which arises is: should the goal of the digital business be to compete with Amazon in order to develop a leading solution to the e-book industry, or should the focus be to have joint business deals with major leaders, such as Google, Apple, etc., in the technological industry.
Analysis There are advantages to collaborating with industry leaders such as Google and Apple.
If we use these channels, we will be join forces to collaborate and use resources in which may not generally be available. By collaborating with these leaders, our teams will be able to develop new plans to reach more consumers and new markets which may not be as feasible to reach on our own. Also, through collaboration, research and development, marketing, and costs of branding can be reduced. By teaming with these leaders, the brand image of the Barnes & Noble Nook will hold a strong recognition and can have strong brand loyalty from existing Microsoft, Google, and Apple users. By developing a division of Barnes & Noble to operate the new digital business, the organization will be able to have two functioning divisions in which will allow the company to focus on its existing clientele, along with adapt to changes in the market trends by focusing the new division on the development of e-books and reader devices to meet the new developing market trends.
Recommendations The analysis conveys the importance of pursuing the avenue of developing a new division to focus on the development of the new digital business, as well as the collaboration with technological industry leaders. My recommendation is to use this collaborative strategy in order to take full advantage of internet channels, reduce competition, and strengthen relationships. I recommend using profit-sharing strategy in which profits …show more content…
through sales will be shared with those in which we are taking collaborative business measures.
Introduction/Environment
Barnes & Noble has been a leader in the book industry since the 1980’s. The bookstore giant is also teamed with Starbucks Coffee by opening Starbucks coffee shops within its stores to allow readers to have a full, enjoyable experience in their Barnes & Noble visits. This allowed Barnes & Noble to appeal to a wide audience and gain a leading position in the industry. Soon after acquiring its dominate position, the introduction of the internet caused the industry to be shaken as individuals were now able to make book purchases online. Later the introduction of e-readers again shook the bookstore industry and caused physical book sales to decrease significantly. Though the e-book brings forth new services and new opportunities, it also brings forth new issues and parameters in which the organizations must adapt to. As internet sales increase so significantly, the need for shelf-space decreases, which in turn reduces costs and price. The need for people to physically visit the store to see a book or inquire on a purchase is not as dominate when the internet allows people to be able to access information at any time of the day, at any location at their own convenience. In 1997, Barnes & Noble saw this change in the market and opened an online store offering over 400,000 titles in order to adapt to the new technological changes, which eventually became the second leading seller for internet book sales. As technology further advanced, the demand for virtually books increased. The introduction of e-readers again affected the physically book sales. In 2007, Amazon adapted even further with the vastly changing market trends by offering the Kindle, which lead to the birth of the largest competition Barnes & Noble digital market would face.
Problem
With the growing demand for digital books, media, and devices, Barnes & Noble must develop the best, most effective and efficient way to adapt to these changes in market trends. First, should the organization continue to operate its practices as a traditional, physical book retailer, alongside offering digital services under the same establishment? Or, should Barnes & Noble develop a new, independent establishment under its name to develop and introduce new e-readers to the market? Microsoft, a leader in the technological industry, has offered to collaborate with the retailer to invest $300 million into its digital efforts in exchange for equity. These conditions would allow the Barnes and Noble Nook to be pre-installed in devices in which will offer the Microsoft 8 software. This offer also creates the issue for Barnes & Noble if they should continue their efforts to be a competitor to Amazon in order to create a leading device, or if their focus should be on collaborations with leaders in the technological and digital industry?
Analysis
With the rapid changes in the technological industry, Barnes & Noble has an opportunity to develop and establish a new division of its organization, which will allow the organization to operate separately from its traditional, brick and mortar industry. This division can place an emphasis on research and development, along with new product development and marketing research. This new digital division will hold the strong brand name of Barnes & Noble, which has a strong sense of loyalty from avid-readers and reach a new, wider audience of those who are early adapters in the market and prefer digital media. However, this establishment will also allow Barnes & Noble to keep its main division of the brick and mortar industry, which will hold its physical book sales. Although the e-book and e-reader industry is rapidly growing, the traditional books will never fade away. This separation of divisions can allow Barnes & Noble to have separate management divisions, separate goals, and separate funding. These measures will allow each division to hold a strong focus on their specialization, which will allow the end product to best satisfy the customer. The traditional Barnes & Noble will continue to appeal to its existing customers, while the new division can focus on growth and reaching new customers with its adaptations to the changes in market trends. By collaborating with leaders and giants in the technological industry, such as Microsoft, Google, and Apple.
Barnes & Noble has the potential to reap many benefits. By using the channels, Barnes & Noble will be able to join with these organizations to better serve the end user. These collaborations will allow the organizations to collaborate in terms of research, development, product development, market trends, etc., which will allow the organizations to reduce individual costs of pursuing these ventures alone, as well as enter new areas which may not be feasible to enter without the teamwork. These collaborative ventures will allow Barnes & Noble, as well as its partners, to develop new plans, ideas, frameworks, and products which will allow these companies to reach more consumers and new markets than before. Along with these collaborations, the strong brand image of these leaders will join together to create a strong partnership in which will have a loyal following from existing users. The companies can join together on this collaborative measure on marketing and advertisement campaigns in order to reach a wide audience, while continuing to serve its existing
audience. The development of the new digital media division of Barnes & Noble will allow it to develop a team to focus on the issue on piracy within the technological industry. With the joint collaboration with the leading technological companies, such as Microsoft, Apple, and Google, measures can be placed in terms of the software used by these organizations in order to place DRM (digital rights management) in which will allow these e-books to be protected by Barnes & Noble and the organizations in which the company is teamed with. This will protect the e-book industry, allow the authors to be rightfully served and protected, and reduce the amount of illegal transport of the e-books.
Recommendations The analysis conveys the importance of pursuing the avenue of developing a new division to focus on the development of the new digital business, as well as the collaboration with technological industry leaders. I recommend Barnes & Noble to pursue this collaborative strategy with Microsoft. A majority of personal computers used are operating under Microsoft operating system. This venture will allow Barnes & Noble Nook device application to reach an entire new audience and reach more people than its existing plans. Any person who purchases a computer or device operating on Microsoft 8 will be able to use this Nook application on its device. This can be particularly beneficial to those who wish to have an application to download e-books with ease; yet do not want to spend money on purchasing multiple devices. I recommend Barnes & Noble to go even further with its intention in terms of collaborative measures and take steps to build relationships and build collaboration plans with other leaders in the technological industry. By teaming with Google and Apple, the Nook can reach a number of new people than it has previously, as well as continue to grow in terms of popularity. These joint ventures will allow the company to take full advantage of internet channels, reduce competition, and strengthen relationships. Properly implemented channels and collaborations will allow us to research changes and trends in the industry, develop innovative products, deliver reliable purchasing experiences, collect effective consumer data, reduce advertising and production costs, provide competitive services and pricing, along with reaching new markets. We will be able to provide more services at lower costs due to these partnerships, which will allow the door to open for opportunities to focus on niche marketing.
I recommend using profit-sharing strategy in which profits through sales will be shared with those in which we are taking collaborative business measures. This will provide incentive for the digital companies to team with Barnes & Noble. Since Barnes & Noble holds a strong brand and company image, the digital companies will benefit from the partnership as well, leading in a potential for an increase in market share, increase in consumers, and increase in profits for both companies.
I also recommend Barnes & Noble to open a separate division of its organization in which will solely focus on the development of the e-books and e-readers. This division will seek to grow and develop new relationships with technological giants, as well as strengthen existing relationships. This division will also focus on market research and developing new ideas to meet the changes in market trends. I recommend the new division of Barnes & Noble to have a goal of innovation, which will allow the organization to have its focus on changing the face of the e-reader industry and implement innovative ideas along with its new collaborations. This will allow Barnes & Noble to strengthen the services and products it offers, without having the end goal of simply competing with Amazon. By taking the focus away from Amazon and the Kindle, and bring the focus to building new relationships, developing innovative new services and products, and keeping its traditional division, Barnes & Noble has a potential to see great success in new areas, as well as remain a leader in traditional divisions.
References
Anderson University
Barnes & Noble Case Analysis
Fall 2014
To: CEO at Barnes & Noble
From: Cassie Bruce
Re: E-book Conflict
Date: October 26, 2014
Introduction/Environment In today’s market, there is an advent of e-books and e-reader devices. Amazon, the leader in the e-reader industry, has introduced the Kindle and Kindle Fire to the market, which allows readers to download books at a lower cost and with ease. Several e-readers and e-book devices from Sony, Apple, and Samsung have been introduced; yet have not seen success as the Kindle from Amazon. With the rapid growth of business through internet sales, there is an opportunity to compete within this e-book market …show more content…
and develop new marketing and sales channels. The biggest competitors are Amazon and Apple. Microsoft has agreed to invest $300 million in Barnes & Noble, as well as offer the Nook application on Windows 8 operating systems in exchange for equity.
Problem Two problems are present in the issue of Barnes & Noble in the decision of which course to take in the e-book market. There must be a decision of the operation style of the business: will it continue its traditional, in-store, operations, along with the digital market all under one business operation. Or, should Barnes & Noble create a separate division to operate the digital market and make decisions independently. The second issue which arises is: should the goal of the digital business be to compete with Amazon in order to develop a leading solution to the e-book industry, or should the focus be to have joint business deals with major leaders, such as Google, Apple, etc., in the technological industry.
Analysis There are advantages to collaborating with industry leaders such as Google and Apple.
If we use these channels, we will be join forces to collaborate and use resources in which may not generally be available. By collaborating with these leaders, our teams will be able to develop new plans to reach more consumers and new markets which may not be as feasible to reach on our own. Also, through collaboration, research and development, marketing, and costs of branding can be reduced. By teaming with these leaders, the brand image of the Barnes & Noble Nook will hold a strong recognition and can have strong brand loyalty from existing Microsoft, Google, and Apple users. By developing a division of Barnes & Noble to operate the new digital business, the organization will be able to have two functioning divisions in which will allow the company to focus on its existing clientele, along with adapt to changes in the market trends by focusing the new division on the development of e-books and reader devices to meet the new developing market trends.
Recommendations The analysis conveys the importance of pursuing the avenue of developing a new division to focus on the development of the new digital business, as well as the collaboration with technological industry leaders. My recommendation is to use this collaborative strategy in order to take full advantage of internet channels, reduce competition, and strengthen relationships. I recommend using profit-sharing strategy in which profits …show more content…
through sales will be shared with those in which we are taking collaborative business measures.
Introduction/Environment
Barnes & Noble has been a leader in the book industry since the 1980’s. The bookstore giant is also teamed with Starbucks Coffee by opening Starbucks coffee shops within its stores to allow readers to have a full, enjoyable experience in their Barnes & Noble visits. This allowed Barnes & Noble to appeal to a wide audience and gain a leading position in the industry. Soon after acquiring its dominate position, the introduction of the internet caused the industry to be shaken as individuals were now able to make book purchases online. Later the introduction of e-readers again shook the bookstore industry and caused physical book sales to decrease significantly. Though the e-book brings forth new services and new opportunities, it also brings forth new issues and parameters in which the organizations must adapt to. As internet sales increase so significantly, the need for shelf-space decreases, which in turn reduces costs and price. The need for people to physically visit the store to see a book or inquire on a purchase is not as dominate when the internet allows people to be able to access information at any time of the day, at any location at their own convenience. In 1997, Barnes & Noble saw this change in the market and opened an online store offering over 400,000 titles in order to adapt to the new technological changes, which eventually became the second leading seller for internet book sales. As technology further advanced, the demand for virtually books increased. The introduction of e-readers again affected the physically book sales. In 2007, Amazon adapted even further with the vastly changing market trends by offering the Kindle, which lead to the birth of the largest competition Barnes & Noble digital market would face.
Problem
With the growing demand for digital books, media, and devices, Barnes & Noble must develop the best, most effective and efficient way to adapt to these changes in market trends. First, should the organization continue to operate its practices as a traditional, physical book retailer, alongside offering digital services under the same establishment? Or, should Barnes & Noble develop a new, independent establishment under its name to develop and introduce new e-readers to the market? Microsoft, a leader in the technological industry, has offered to collaborate with the retailer to invest $300 million into its digital efforts in exchange for equity. These conditions would allow the Barnes and Noble Nook to be pre-installed in devices in which will offer the Microsoft 8 software. This offer also creates the issue for Barnes & Noble if they should continue their efforts to be a competitor to Amazon in order to create a leading device, or if their focus should be on collaborations with leaders in the technological and digital industry?
Analysis
With the rapid changes in the technological industry, Barnes & Noble has an opportunity to develop and establish a new division of its organization, which will allow the organization to operate separately from its traditional, brick and mortar industry. This division can place an emphasis on research and development, along with new product development and marketing research. This new digital division will hold the strong brand name of Barnes & Noble, which has a strong sense of loyalty from avid-readers and reach a new, wider audience of those who are early adapters in the market and prefer digital media. However, this establishment will also allow Barnes & Noble to keep its main division of the brick and mortar industry, which will hold its physical book sales. Although the e-book and e-reader industry is rapidly growing, the traditional books will never fade away. This separation of divisions can allow Barnes & Noble to have separate management divisions, separate goals, and separate funding. These measures will allow each division to hold a strong focus on their specialization, which will allow the end product to best satisfy the customer. The traditional Barnes & Noble will continue to appeal to its existing customers, while the new division can focus on growth and reaching new customers with its adaptations to the changes in market trends. By collaborating with leaders and giants in the technological industry, such as Microsoft, Google, and Apple.
Barnes & Noble has the potential to reap many benefits. By using the channels, Barnes & Noble will be able to join with these organizations to better serve the end user. These collaborations will allow the organizations to collaborate in terms of research, development, product development, market trends, etc., which will allow the organizations to reduce individual costs of pursuing these ventures alone, as well as enter new areas which may not be feasible to enter without the teamwork. These collaborative ventures will allow Barnes & Noble, as well as its partners, to develop new plans, ideas, frameworks, and products which will allow these companies to reach more consumers and new markets than before. Along with these collaborations, the strong brand image of these leaders will join together to create a strong partnership in which will have a loyal following from existing users. The companies can join together on this collaborative measure on marketing and advertisement campaigns in order to reach a wide audience, while continuing to serve its existing
audience. The development of the new digital media division of Barnes & Noble will allow it to develop a team to focus on the issue on piracy within the technological industry. With the joint collaboration with the leading technological companies, such as Microsoft, Apple, and Google, measures can be placed in terms of the software used by these organizations in order to place DRM (digital rights management) in which will allow these e-books to be protected by Barnes & Noble and the organizations in which the company is teamed with. This will protect the e-book industry, allow the authors to be rightfully served and protected, and reduce the amount of illegal transport of the e-books.
Recommendations The analysis conveys the importance of pursuing the avenue of developing a new division to focus on the development of the new digital business, as well as the collaboration with technological industry leaders. I recommend Barnes & Noble to pursue this collaborative strategy with Microsoft. A majority of personal computers used are operating under Microsoft operating system. This venture will allow Barnes & Noble Nook device application to reach an entire new audience and reach more people than its existing plans. Any person who purchases a computer or device operating on Microsoft 8 will be able to use this Nook application on its device. This can be particularly beneficial to those who wish to have an application to download e-books with ease; yet do not want to spend money on purchasing multiple devices. I recommend Barnes & Noble to go even further with its intention in terms of collaborative measures and take steps to build relationships and build collaboration plans with other leaders in the technological industry. By teaming with Google and Apple, the Nook can reach a number of new people than it has previously, as well as continue to grow in terms of popularity. These joint ventures will allow the company to take full advantage of internet channels, reduce competition, and strengthen relationships. Properly implemented channels and collaborations will allow us to research changes and trends in the industry, develop innovative products, deliver reliable purchasing experiences, collect effective consumer data, reduce advertising and production costs, provide competitive services and pricing, along with reaching new markets. We will be able to provide more services at lower costs due to these partnerships, which will allow the door to open for opportunities to focus on niche marketing.
I recommend using profit-sharing strategy in which profits through sales will be shared with those in which we are taking collaborative business measures. This will provide incentive for the digital companies to team with Barnes & Noble. Since Barnes & Noble holds a strong brand and company image, the digital companies will benefit from the partnership as well, leading in a potential for an increase in market share, increase in consumers, and increase in profits for both companies.
I also recommend Barnes & Noble to open a separate division of its organization in which will solely focus on the development of the e-books and e-readers. This division will seek to grow and develop new relationships with technological giants, as well as strengthen existing relationships. This division will also focus on market research and developing new ideas to meet the changes in market trends. I recommend the new division of Barnes & Noble to have a goal of innovation, which will allow the organization to have its focus on changing the face of the e-reader industry and implement innovative ideas along with its new collaborations. This will allow Barnes & Noble to strengthen the services and products it offers, without having the end goal of simply competing with Amazon. By taking the focus away from Amazon and the Kindle, and bring the focus to building new relationships, developing innovative new services and products, and keeping its traditional division, Barnes & Noble has a potential to see great success in new areas, as well as remain a leader in traditional divisions.
References