Case Analysis: Leadership Online: Barnes & Noble vs. Amazon.Com
Msc. Management (FT)
Strategic Management (2007)
Assignment
Case Analysis: Leadership Online: Barnes & Noble vs. Amazon.com
Answer all three questions. All questions carry equal marks.
Q1. Based on your own experience of traditional bookselling and your exploration of online bookselling, compare willingness-to-pay for books supplied by these two business models. In the US, the traditional bookselling had a market of about 26 million dollars in the year 1996 and had grown to about 33 million dollars in the year 2001. It is growing at the rate of about 4.8 % per annum. An average American citizen buys about 10 books a year in 1996. Book buying usually increases during the weekends and during the fourth quarter of the year. Usually individuals between the ages of 35 to 75, buy books. In the US, more than 50, 000 new titles are published every year. However, people read both old and new releases. When considering traditional bookstalls, it is important to take into consideration the publishers, wholesalers and the retailers. One of the most popular publishers in the US is Simon & Schuster (which hold a 11 % share of the market). In recent years, many of the small publishers have been taken over by the larger ones as they were facing loses and it was increasingly becoming difficult to maintain relationships with writers and retailers. In the traditional system of book vending, the publishers for bulk purchasers offer huge amounts of discounts to retailers and wholesalers. Retailers are offered a discount of about 55 %, whereas wholesalers are offered a margin slightly above that. However, there has been a lot of controversy in this regard, due to apparent favoritism. Hence, many of tee publishers are now made to sign agreements with the retailers and the wholesalers, regarding the amount of discounts that could be offered. In the traditional system, the retailers and the wholesalers can return books to the publisher and they would get a full
Strategic Management (2007)
Assignment
Case Analysis: Leadership Online: Barnes & Noble vs. Amazon.com
Answer all three questions. All questions carry equal marks.
Q1. Based on your own experience of traditional bookselling and your exploration of online bookselling, compare willingness-to-pay for books supplied by these two business models. In the US, the traditional bookselling had a market of about 26 million dollars in the year 1996 and had grown to about 33 million dollars in the year 2001. It is growing at the rate of about 4.8 % per annum. An average American citizen buys about 10 books a year in 1996. Book buying usually increases during the weekends and during the fourth quarter of the year. Usually individuals between the ages of 35 to 75, buy books. In the US, more than 50, 000 new titles are published every year. However, people read both old and new releases. When considering traditional bookstalls, it is important to take into consideration the publishers, wholesalers and the retailers. One of the most popular publishers in the US is Simon & Schuster (which hold a 11 % share of the market). In recent years, many of the small publishers have been taken over by the larger ones as they were facing loses and it was increasingly becoming difficult to maintain relationships with writers and retailers. In the traditional system of book vending, the publishers for bulk purchasers offer huge amounts of discounts to retailers and wholesalers. Retailers are offered a discount of about 55 %, whereas wholesalers are offered a margin slightly above that. However, there has been a lot of controversy in this regard, due to apparent favoritism. Hence, many of tee publishers are now made to sign agreements with the retailers and the wholesalers, regarding the amount of discounts that could be offered. In the traditional system, the retailers and the wholesalers can return books to the publisher and they would get a full
References: Barnes and Noble (20070, Books, [Online], Available: http://www.barnesandnoble.com/bookstore.asp?z=y, [Retrieved: September 10, 2007]. Bianco, A. (1997), "Virtual Bookstores Start to Get Real," Business Week , Chapman, A. (2005), Porter 's Five Forces Model, [Online], Available: http://www.alanchapman.com/portersfiveforcesofcompetition.htm, [Retireved; 2007, September, 10]. Gheemawat, P. (2004), Leadership Online (A): Barnes & Noble vs. Amazon.com, Harvard Business School. Hahn, A. L. (2000), Barnes&Noble.com gearing up to pose a threat to Amazon, The Investment Dealers ' Digest, pg. 1. Hoursburgh, S. & Palowski, H. (2006), “Strategy and the Business Landscape”, Custom Publishing, 2006. Knecht, G. K. (1996), "How Wall Street Whiz Found a Niche Selling Books on the Internet," Wall Street Journal Krystallis, A Patton S. (2001), Barnesandnoble.com fights back. CIO, Framingham, Vol. 14, Iss. 23. pg. 78