Barnes & Noble Case Analysis Harvard Case Solution & Analysis

Introduction

            The paper attempts to describe the situation synopsis of the case along with the problem faced by the company. The paper also attempts to provide a detailed external and internal analysis of the company. In external analysis, the paper describes the industry structure and trends along with competitive situation analysis with the application of the model Porter’s Five Forces. Furthermore, in internal analysis the paper highlights the financial analysis of the company along with the application of SWOT analysis. Moreover, the paper provides strategic alternatives along with recommendation and implementation.

Situation Synopsis

            Barnes & Nobles (B&N) is a traditional Brick and Mortar retail store which has been facing various challenges due to the entrance of technology in the publishing, distribution, and selling of the books electronically. The emerging of the new competitors such as Apple and Amazon have launched their product for electronic books, while the position of B&N remains crumbling in the industry. The competitors in the e-book have made it difficult for the traditional retailers to survive in the industry.

            Along with this, B&N would have to decide future strategies and how it shall be competing in the industry for a longer period of time. The case enables the understanding of traditional industries which are attacked by competitors which have adopted digital technologies to disrupt the market leadership.

Problem Statement

            Due to the emergence of electronic book technologies by the competitors of Barnes & Nobles, the company has to make future decision for its sustainability. The company has to make decisions regarding how to compete in the ever-changing industry, as well as, the company would need to develop standards for their distribution. Furthermore, the company would also need to decide if it has to develop a separate digital business for their e-book technology or it shall construct an integrated strategy.

External Analysis

Competitive Situation Analysis

Amazon

Amazon is the world’s largest online retailer and a bookseller which has focused its business model on satisfaction of customers as its strategies are based on customer centric approach. The company also focuses on low-cost operations while managing low inventory as the company manages millions of unit of sticks in a single warehouse. Amazon competes with Barnes & Noble through its distribution channel along with the market and customer segments.

Apple

            Apple initiated the concept of publisher-friendly approach towards entire book publishers which allowed the electronic book market to grow which made the industry willing to listen the offers made by Apple. The success of the company became prominent when it offered iPod to its customers, while introducing smartphones allowed the company in become the market leader of electronics around the world.

Borders Group

            Borders is second in the market for traditional book retailer after B&N, however as discussed in the case, B&N had outlasted its particular competitor when Borders had admitted that the market had been shrinking in the year 2011. Borders opened its first online book store in the year 1997, but due to heavy losses in four consecutive years, the company had to close down its operations and develop a mutual partnership with Amazon.

Porter’s Five Forces

Threat of New Entrants

            There are various competitors in the industry as there are over 10,000 Brick and Mortar retail stores in the United States. The figure would tend to rise in the online retailer segment since minimum of capital is required due to low inventory;therefore, this makes the threat of new entrants high.

Barnes & Noble Case Analysis Case Solution

Threat of Substitutes

            The substitute for reading books include watching television, watching movies, playing games, spending time with friends, and participate in sporting events. Therefore, the threat of substitute is higher for companies present in the industry. Moreover, there are many technological gadgets which are competing with books this include smartphones and tablets.

Competitive Rivalry

            The rivalry in the industry is also high as major competitors such as Amazon, Apple, Google, and Borders are competing together. The growth for Brick and Mortar retail stores is declining where the growth for online book store is increasing. Therefore, companies which are developing customer-driven strategies are gaining success, amongst which the major example include Amazon whose business model is based on customer-centric approach.

Bargaining Power of Buyers

            Since technology has played its role in the particular industry, it has provided customers with various options to purchase their products. This makes the buying power of buyers very high. Along with this, customers can compare prices over the internet through easy access which allows them to distinguish and differentiate from other competitors in the industry. This was never possible in the case of traditional retailers.................

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