Why Amazon Suceeded and Borders Failed
Amazon.com compared to Borders Books
A look into the History of these two companies and how Amazon became profitable while Borders ended in Bankruptcy.
By Robert H. (Bob) Travis
Strayer University
Winter Quarter, 2012
BUS 302 – Management Concepts
Professor Charles Wittenberg
Abstract
This paper will examine the history of both companies, Amazon.Com and Borders Books. In addition, I will highlight some of the critical decisions that each company made that have led to the wild success of Amazon.Com and to the eventual liquidation and closure of Borders Books. I will examine how the internet, changing demographics of readers in general and the introduction of the e-reader and e-books have forever changed the face of the bookselling industry. I will answer the question, “How did the newer, more nimble company (Amazon.Com) prosper while the more established and older company (Borders Books) fail.”
In the immortal words from a Grateful Dead Song from the 1980’s, “What a long, strange trip it’s been” for Jeff Bezos and Amazon.com. Mr. Bezos decided in 1994 to leave his lucrative position as a Senior Vice President at D.E. Shaw, a Wall Street Investment Bank firm and move to Seattle, WA with an idea to make money from the burgeoning idea of the internet and selling products over the internet. He had read that internet usage was growing at 2,300 per cent per year, and he was confident that this was his opportunity to make his million. Mr. Bezos hit upon books – with over 3 million in print at any one time, he knew that no physical bookstore could stock more than a fraction of that number. His idea then of a virtual bookstore that could offer a much greater selection and compete comfortably on price because there were less overhead costs, made sense to him. He also saw that the dynamics of book publishing were also favorable. He knew that there were over 2,500 publishers in the United States and the two largest retailers, Barnes and Noble and
A look into the History of these two companies and how Amazon became profitable while Borders ended in Bankruptcy.
By Robert H. (Bob) Travis
Strayer University
Winter Quarter, 2012
BUS 302 – Management Concepts
Professor Charles Wittenberg
Abstract
This paper will examine the history of both companies, Amazon.Com and Borders Books. In addition, I will highlight some of the critical decisions that each company made that have led to the wild success of Amazon.Com and to the eventual liquidation and closure of Borders Books. I will examine how the internet, changing demographics of readers in general and the introduction of the e-reader and e-books have forever changed the face of the bookselling industry. I will answer the question, “How did the newer, more nimble company (Amazon.Com) prosper while the more established and older company (Borders Books) fail.”
In the immortal words from a Grateful Dead Song from the 1980’s, “What a long, strange trip it’s been” for Jeff Bezos and Amazon.com. Mr. Bezos decided in 1994 to leave his lucrative position as a Senior Vice President at D.E. Shaw, a Wall Street Investment Bank firm and move to Seattle, WA with an idea to make money from the burgeoning idea of the internet and selling products over the internet. He had read that internet usage was growing at 2,300 per cent per year, and he was confident that this was his opportunity to make his million. Mr. Bezos hit upon books – with over 3 million in print at any one time, he knew that no physical bookstore could stock more than a fraction of that number. His idea then of a virtual bookstore that could offer a much greater selection and compete comfortably on price because there were less overhead costs, made sense to him. He also saw that the dynamics of book publishing were also favorable. He knew that there were over 2,500 publishers in the United States and the two largest retailers, Barnes and Noble and
References: Amazon at 10: Profitable at Last. Introduction to E-Commerce. Retreived January 26, 2012 from Pearsonhighered.com/samplechapter/0131736160/pdf. Austen, B. (2011 November) The end of Borders and the Future of Books. Bloomberg BusinessWeek. Retrieved January 23, 2011 from www.businessweek.com/magazine. Jaffe, T. (1998, September 21). Borders overboard? Forbes Magazine, 104, Retrieved January 23, 2012 from http://elibrary.bigchalk.com Norris, M. (2011) Borders: A Case Study of Bookselling Gone Wrong. Book Publishing Report, volume 36, Number 2. Retrieved January 23, 2012 from www.bookpublishingreport.com.