Barnes & Noble Case Study Solution
Key Problems/Issues
Overview
Barnes and Noble is a book publishing company established in 1873 in Wheaton, Illinois. The company expand itself through acquisitions. In 1990, the company soldbooks through super stores and presently the company has world’s largest bookstores and has approximately 1000 stores.
Problems/Issues
Company started to face issues after 1990 when internet created a huge impacton the lives of people. After technology innovation people started to move towards e-books which drastically deteriorated the position of the company. To overcome this issue company decided to enter into E-book market but before entering into this market company has many concerns, it wantsto know about the general, industry and competitive environment of this new business.Furthermore,it also has a concern to know about the segments and forces of general and industry environment which can affect its performance.
As till now company operates on the traditional method therefore, it wants to know about its resources, capabilities, weaknesses and competitive advantages along with this it also has a concern to know either these are sustainable or need improvements.
The other issues which are faced by the company areabout its strategies. The company has concern about its functionalstrategy; it wants to know either the proposed strategy is an appropriate one or not or either it will enhance its position or not. Along with this, company also has a concern about its growth strategies and current structure. The problems which are faced by the company is related to the issue that either the proposed strategy to grow the company will be in accordance with the goals of firm or not.
Lastly,company wants to evaluate its position. To achieve this, its intends to compare its position with the competitor and the industry. Along with this, it also wants to know about the change in its positions in the last few years and the effectiveness of its leadership.
External Analysis
We can analyze the general environment, industry environment and competitionby conducting PEST analysis and Porter’s 5 Forces model. PEST analysishas four elements Political, Economic, Social and Technological.
General Environment
Political
Under political factors we can evaluate the political stability of the country in which the company operates.Furthermore, it will also enable us to evaluate the policies, laws and factors taken by government which can affect the company. Barnes and Noble is an international company therefore, it may face many problems if conflicts arise between two countries.(Eliza Bivolaru, 2009)
Economic
Under the economical factor one can evaluate the purchasing power of the locals, number of consumers, interest & inflation and exchange rate and currency stability. Barnes and Noble operates in book publishing industry therefore,this factor will be beneficial for it because it is necessary for the company to understand consumers interest so that it can publish the books in accordance with the consumer’s interest. Furthermore, due to this factor company can evaluate the stability of the currency of different countries as Barnes and Noble is an international company therefore, this factor will help in planning the countriesinwhich company can start operations.(Eliza Bivolaru, 2009)
Social
Under social element we can analyze the lifestyle of locals,their preference their education levels and others.Afteranalyzing thisfactor,book publishing companies can evaluate the lifestyle of locals of the country in which they operate.By conducting this analysis,companies can evaluate the literacy ratio of the country and by obtaining this information company canpublish books which will be in accordance with the locals.(Department of Business Management, 2012)
Technological
Under technological factor one can evaluate the technological innovation which can affect the company. As this is a technology oriented era therefore, it is essential for the companies to evaluate the effects of technology to the particular industry. Barnes and Noble is a book publishing company and we can see that technology affects publishing industry more severely. Companies moves towards e-commerce and therefore it is essential for Barnes and Noble to consider this factor.(Department of Business Management, 2012)
Factors of general environment which should be consider by firm
Barnes and Noble intends to enter into e-business as this method of business will be technology based business therefore, company should keep itself in touch with the innovation in industry. Furthermore, as this method converts the company into a global operation therefore, company should also take care ofsocial and political factors of the general environment.
Industry Environment
Industry environment can be analyzed using Porter’s 5 Forces. By using this model, one can evaluate the five competitive factors which shape an industry.By this model one can determine the industry’s strength and weaknesses. The five forces which are dealt in this model are follows:
Barnes & Noble Harvard Case Solution & Analysis
Bargaining Power of Supplier
This force determines the ability of the supplier to fluctuate the price of raw material. This force can be affected by many factors like number of suppliers in the industry, suppliers size, uniqueness of the service and etc.(Karagiannopoulos, 2006)
E-book industry innovates very rapidly as customers want effective form of books like graphic books, books on android and others. There are few suppliers in the industry who provide these services therefore, the bargaining power of supplier is high....................
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