A%20Case%20Analysis%20of%20Barnes%20

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A Case Analysis of Barnes Noble
MGMT 4842 Strategic Management
Robert Daigle - Sidney Best - Jack Zeigler -
Charlie Smith Jessica Whitley - Josh Cornwell
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Company Background

• The Barnes family's history in the book business
  started in 1873
• The company revolutionized bookselling by
  introducing giant, supermarket-style stores with
  deeply discounted books in the 1970s
• As of July 2010 BN operates 717 retail bookstore
  locations in all 50 states and 633 college
  bookstores
• These stores stock between 60,000-200,000 book
  titles

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Issue 1

• Barnes Noble needs to address the companys
  lack of effective leadership in its effort to
  sell the company

• Alternative 1 The first alternative is for the
  company to attempt to handle the sale of the
  company in-house.

• Alternative 2 Another option to resolve this
  dissonance in the boardroom is hire a third party
  consultant to handle the sale of this company.

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S.W.O.T Analysis
Strengths Barnes Noble is an established brand with a solid market presence which correlates into a strong competitive advantage. Barnes Noble enters into the digital market and shows a strong presence with its multi-channel strategy. Price conscious customers are attracted to Barnes Nobles discount pricing. Barnes Noble offers benefits to their customers. Barnes Nobles acquisition of Barnes Noble College has propelled the company into the college bookstore market. Weaknesses Barnes Nobles profitability has been harshly impacted by legal proceedings. Competitors are causing weak margins. Reliance on a small number of suppliers. 4. College textbooks sales shifting to renting textbooks or digital textbooks. 5. Falling profit margins cause less investment opportunities.
Opportunities Considerable growth expected from the eReader and eBook areas . With the acquisition of BN College, Barnes Noble has forayed into the college textbook market . Barnes Noble launches a go-green line of products . Barnes Noble will become the leading and largest retailer of magazines and newspapers in America. Threats Barnes Nobles growth opportunities are negatively affected by competition and price wars. Decreasing physical book sales are reported even though digital product sales increase . College enrollment is declining due to a decrease in state funding . Barnes Noble embroiled in boardroom issues. Barnes Noble sees decline in holiday sales.
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Issue 1 Alternatives

• Alternative 1

• Alternative 2

• Pros
• Less expensive than hiring a consulting firm
• Would eliminate the 2 controversial parties
  having direct contact
• Cons
• Slower results
• Consumes company time and resources
• Bias can still be prominent

• Pros
• Non-Bias interpretation
• Shareholders interests in mind
• Results produced in a timely manor
• Cons
• High costs
• Vulnerable to consultants having access to
  information
• Difficulty in agreement on consultant

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Issue 1 Recommendation

• Recommendation Alternative 2- hire a third party
  consultant to handle the sale of this company.
• Addresses the companies need for decisions to be
  made in a timely manner.
• Important the decisions be made quickly before
  the situation becomes worse than it is.
• This alternative will also provide stability for
  the company.

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Issue 2

• Barnes Noble faces a reduction in its profit
  margins. This is caused by increases in
  competition, government regulation, and online
  sales.

• Alternative 2 The second alternative is for
  Barnes and Noble to market eBooks and eReaders
  inside its bookstores.

• Alternative 1 The first alternative is to
  increase product differentiation.

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Issue 2 Alternatives

• Alternative 1

• Alternative 2

• Pros
• Product differentiation can lead to increased
  profit margins
• Utilizing physical stores
• Cons
• Hard to establish a truly unique product

• Pros
• Using stores to promote new eReader technology
• Provides a one-on-one experience
• Cons
• Can lose traditional book readers to the eReader
• Can potential make physical stores obsolete

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Issue 2 Recommendation

• Recommendation Alternative 1- Increase product
  differentiation
• Makes BN more appealing in the marketplace
• BN have started this process by introducing its
  NOOK in a color version

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Issue 3

• Barnes Noble faces is its decline of physical
  book sales . This is due to a changing consumer
  trends towards digital technology.

• Alternative 2 The second alternative is to
  create special offers for college students.

• Alternative 1 The first alternative is to expand
  the companys eBook sales with select and
  exclusive products.

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Issue 3 Alternatives

• Alternative 1

• Alternative 2

• Pros
• Offering exclusive products can build a loyal
  customer base
• Cons
• Issues with obtaining licenses or rights
• Shifting to digital media can be costly
• Can make physical stores obsolete

• Pros
• Dramatic increase in repeat purchases
• Can be marketed to any level of education
• Possibility of renting eReaders
• Cons
• Decrease in printed textbook sales

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Issue 3 Recommendation

• Recommendation Alternative 1- Expand the
  companys eBook sales with select and exclusive
  products.
• Increases customer loyalty and increase brand
  recognition for the Nook.
• By increasing brand recognition and consumer
  loyalty BN may be able to beat Amazon for
  dominance over the industry market share.

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• Questions and Answers