Barnes and Noble Company and Amazon.com - Essay Example

? Barnes & Noble vs Amazon.Com November 29, Executive Summary The following shows the financial analysis of the two competing companies. The two companies are Barnes and Noble Company and Amazon.com. Background information. Both companies were well established. The Barnes and Noble Company generates profitable background information. William Barnes and William Clifford Noble, established the Barnes and Noble Company in 1917. On the other hand, Jeff Bezos established an online website to start selling his physical books and CDs in the 1990s. The company branched out to sell E-books. Jeff Bezos persuaded its current and future customers to benefit from the time-saving and travel money-saving benefits of online shopping for Amazon.com products. Management Styles. Both companies implement effective management styles. The Barnes and Noble Company focuses on the consultative management style. The style includes taking into consideration all positive and unfavorable feedbacks and inputs. The inputs include the feedback from the parties. On the other hand, Amazon uses persuasive management style. Management uses persuasion to convince its current and future employees eagerly implement company policies, increasing customer service quality. Product Launch and handling of products and services. Both companies have different product launch versions. The Barnes and Noble Company offers several products in different genres. The products are sold over 800 United States stores. On the other hand, Amazon’s product launch is focused on website selling. The company opens its www.amazon.com website to initially sell physical books and other related products. Marketing products and services. Both companies use different marketing strategies. The Barnes and Noble Company sells various products and services in over 800 stores in the 50 states and its website. On the other Amazon.com only uses online selling. Future challenges that each competitor faces. Each company must muster enough efforts to increase its revenues and profits. Barnes must imitate Amazon to keep abreast with Amazon. Amazon must do whatever it takes to prevent Barnes and Noble Company from catching up with Amazon’s financial performance. Brief Comparative Statistics (possibly) The above statistics table shows that Amazon.com performed better than Barnes and Noble Company. The Amazon.com’s financial statistics show that its revenues better than Barnes and Noble Company’s revenues. Amazon.com’s net income is better than the dismal net loss of Barnes and Noble Company. The sales figure prods investors to funnel their investment in Amazon.com. With more Amazon.com customers, the investors must choose Amazon.com as their investment destination. Amazon’s better implementation of the marketing aspects contributed to its being a market segment standout. Amazon.com sells quality products at reasonable prices. The company promotes its products at the easiest place to buy, the internet. Statistical Comparison                         Barnes &         Amazon   Noble     Year   2011   2011     Sales $ 57.26 billion $ 7.16 billion     Net Income (net loss) $ 40 million $ (69.44 million)     Market Share   26%   3%     Employees   56,000.00   35,283.00     Stores   1 online   800+     Equipment   No printing Press   Printing Press                 CONCLUSION. It is very clear that Amazon.com’s financial and business performance is higher than Barnes and Noble Company’s business performance. Unquestionably, investors must pick Amazon.com as the better investment destination. MEMORANDUM TO: FROM: DATE: SUBJECT: The following shows the financial analysis of the two competing companies. The two companies are Banes and Noble Company and Amazon.com. Background information. Barnes & Noble. The Barnes and Noble Company generates a profitable background information. Charles Barnes and Clifford Noble, separate bookstore sellers decided to joined hands during the 1800s. The company started selling physical books to its 1800s current and future customers. In 1917, during the First World War, New York’s Clifford Noble sought the partnership of Illinois bookseller, Charles Noble. When Charles Barnes died, his son went New York to accept the Clifford Noble invitation to form a bookselling partnership. The son, William Barnes, consummated the Barnes and Noble bookstore, which has grown by leaps and bounds into many stores within the United States today (Morgan, 2009). Amazon.com. Amazon has successful company background information. During the 1990s, Jeff Bezos created the Amazon.com universe. Bezos started by selling physical books on its online website. In 1998, the company branched out to sell CDs and DVDs to its current and future online customers. Jeff Bezos quit his high paying job to travel around the United States to promote his online marketing website. Bezo’s unwavering positive attitude gave the adventurer more than enough energy to fulfill his vision and mission to supply the nation easier purchasing of books. Jeff Bezos persuaded its current and future customers that it would be less tiring to click the mouse when buying one’s next book or other Amazon.com products. Jeff Bezos persuaded the current and future customers that online purchasing would reduce the trips to the physical bookstores, saving the buyers both precious time and scarce travel money resources (Byers, 2006). Management Styles. Barnes & Noble. The Barnes and Noble Company implements the consultative management style. The style includes taking into account the inputs of all affected parties. The parties include the current and future customers, the marketing personnel, supply and other sectors. The inputs include the feedback from the parties. Management support includes taking advantage of feedbacks to uplift the employees’ morale Management motivates the employees to give their 200 percent to their job responsibilities (Lussier, 2011). Amazon.com. Amazon uses persuasive management style. Management offers enticing salaries and other offers to its employees. The above average benefits encourage the current and future employees to exert extra efforts to excel in their current responsibilities. However, management makes the final decision as to what activities should be implemented. The persuasive management style effectively increases the employees’ performance outputs (Seperich, 2006). Product Launch and handling of products and services. Barnes & Noble. The company offers several products in different genres. The company is engage in physical bookstore sales. The company also sells music and software products. The company sells in-store coffee (starbucks) products. The company also publishes books. The company distributes books from other publishers. The products are sold in the company’s more than 800 stores in more than 50 states of our nation (Plukett, 2008). Amazon.com. Amazon’s product launch is focused on website selling. The company opens its www.amazon.com website to initially sell physical books and other related products. The company branched out to selling online books, and other physical products. All amazon.com products are sold through the company’s website. Marketing products and services. Barnes & Noble. The Barnes and Noble Company sells different products and services. The company sells its products in over 800 stores in the 50 states. The company sells different products. The products books. Another company product is publishing. The company also sells sandwiches and other snacks and Starbucks coffee. The company also sells stores and music DVDs and movie DVDs. The company owns the original Sterling company (Plunkett, 2008). Amazon.com. The Company is an e-commerce company. The company’s major business is selling its products online. The company sells its online books using the Kindle e-book software. Currently, the company is one of the world’s top online book retailers. The company also offers its current and future customers monthly rental of its cloud computing services. Cloud computing allows the Amazon customers to save their files in the clouds, in Amazon’s online hard disks. The company’s website, www.amazon.com, offers state of the art technology, built-in traffic, and industry-leading fulfillment and top of the line customer service processes by with its partner company’s products (Cummings, 2009). Approach to e-commerce that sets one rival company apart from the other. The Barnes and Noble Company’s major line of marketing is physical book selling. On the other hand, the Amazon Company focuses a majority of the marketing efforts online. Future challenges that each competitor faces. Barnes & Noble: The Company established during the pre-information technology days (1917), the Barnes and Noble Company has been overstepped by Amazon. Initially, Amazon was recognized as one of the rain-drenched forests of the Amazon River. During this time, Barnes and Nobles was the number one bookstore choice. With the continuing online success of Amazon’s online bookstore starting during the 1990s, Barnes and Noble Company the demand for Barnes and Noble Company’s physical book sales customers started to have a steep dive. Many of the Barnes and Noble Company customers shifted to the reading online books of its Goliath rival, Amazon.com. Consequently, the Barnes and Noble Company’s warehouses were filled with unsold physical books as people moved on to use the online PDF books files and Amazon’s kindle version of the Barnes and Noble physical books (Schlie, 2011). Amazon.com. The Amazon Company faces a very volatile situation. The company’s stock market price fluctuates according to the company’s sales and profit inputs. The company is currently facing challenges from its former business partner, Barnes and Noble Company. Barnes and Noble previously sold many online Amazon books. The recent Barnes and Noble banning the sale of Amazon online books challenges Amazon’s sustaining its financial growth trend. Amazon must also preserve its current leadership in the online e-commerce selling of its top products. The company’s top products include books sold in over 200 countries, music DVDs, auction, travel products, electronics, toys, and other profitable products (Megginson, 2005). Important decisions made by the two competitors and how those decisions affected their company when facing past challenges. Barnes & Noble: Barnes and double decided to enter the online marketing segment. After realizing that its physical books marketing was drastically losing to the online marketing strategies of Amazon.com, Barnes decided ton buy an online website domain. Barnes and Noble Company purchase the company that owned the popular website domain www.books.com. After realizing that it was losing the book sales to its online competitor, Amazon.com, Barnes and Noble decided to compete against Amazon in the e-commerce marketing segment (Fiore, 2006). The Barnes and Noble Company strategic moves to sell online products and create its own nook eBook reading software effectively drives many Amazon eBook customers to Barnes and Noble Company eBook sales sites. Amazon.com. The Company has not faced any formidable competitor in its market segment. Consequently, Amazon can continue using it current marketing strategy. Strategic moves made by one rival that might affect the other. Amazon’s strategic moves included setting up a business that generates profits. One its initial bookstore marketing strategies was to sell products that will encroach on physical bookstores’ current and future customers. The company decided to focus on selling the online versions of physical bookstores’ products, during the 1990s. Today, the online marketing strategy catapulted the company to its present leadership stature. Further, another strategic move included Amazon’s major decision to cut its marketing ties with its former physical bookstore partner, Barnes and Noble Company. Instead, Amazon decided to restrict all its online books to current and future customers who purchased Amazon’s Kindle software. The Amazon kindle software only reads books that are formatted using the Amazon’s kindle requirements. In addition, Amazon allows its self-publishers copyright security. The current and future customers can only open the Amazon kindle books if Amazon grants the customers online access. Consequently, the book buyers cannot transfer or copy the books to other forms or computers without permission from the authors. The Amazon copyright concept is called digital rights management (Boxwell, 2011). The Amazon strategy seeks to generate more Amazon sales, affecting the Barnes and Noble Company sales. Fundamental differences in each company’s vision of its industry’ future (for instance, do they both agree on what consumers want, what products to deliver, and so on. Barnes & Noble. Barnes and Noble Company woke up realizing that its insistence to sell physical books feel on more deaf ears. The company took very long to realize that the increasing marketing trend was for customer preference for eBooks. The company’s success stories include the company’s profitable entry into the e-commerce market segment. The company website, http://www.barnesandnoble.com/, sells a nook eBook software version of its physical books. The company also sells other online products. The products include toys and games, home and gifts, movies and television, music, gift cards, and other products. Amazon.com. Fundamentally, Amazon blazed the new uncharted trail in book marketing. The company was created to mainly sell online books. After several years, the Amazon marketing plan reaped bountiful profits. The people were caught in the bandwagon called information technology. Consequently, Amazon is the top seller of online books, outdoing the sales of physical books of its competitors (including Barnes and Noble Company). Amazon’s success stories include branching out to selling online products in other marketing segments. The marketing segments include gold box, black Friday, cyber Monday, top holiday deal, coupons, and other discounted bargains to its current and future customers. The company successfully entered the online electronics, jewelry, video games, collectibles, food, and clothes marketing strategy. Specific competitive advantages of each rival. Barnes & Noble: The Barnes and Noble Company sells physical books. The company caters to the elderly populations demand for physical books. In addition, the company sells snack foods and musical DVDs to augment its book sales. Its main book rival, Amazon, does not cater to the physical books demands. Amazon.com. The Amazon.Com Company focuses on filling the increasing demand for online products. The online products include online books. The company sells its physical goods in its online store. The products include cameras, watches, laptops, cell phones, television sets, jackets, toys, and other products (http://www.amazon.com). Brief Comparative Statistics (possibly) Statistical Comparison                         Barnes &         Amazon   Noble     Year   2011   2011     Sales $ 57.26 billion $ 7.16 billion     Net Income (net loss) $ 40 million $ (69.44 million)     Market Share   26%   3%     Employees   56,000.00   35,283.00     Stores   1 online   800+     Equipment   No printing Press   Printing Press                 http://finance.yahoo.com/q/is?s=AMZN The above table shows that shows that Amazon.com generated better statistical business performance compared to Barnes and Noble’s statistical business performance. Amazon.com generated a higher sales production compared to Barnes and Noble. Similarly, Amazon.com generated a net income amounting to $40 million during the 2011 annual accounting period. The amount is higher than the unfavorable $ 69.44 million net loss generated during the same accounting period. The Amazon.com company also generated a higher 26 percent of the entire market segment. The amount is higher than the Barnes & Noble Company’s 3 percent market segment share. The Amazon.com company sells all its products online without need for any printing press equipment. The Barnes & Noble Company uses printing press equipment to publish its paper-based physical books. ANALYSIS. The above discussion clearly shows that one company clearly shows that one company glaringly outshines or outperforms the other company. The Amazon.com’s financial statistics show that its revenues are higher than the competing Barnes and Noble Company’s revenues. The net income statistics shows that Amazon’s net income is higher than the dismal net loss of Barnes and Noble Company. The sales figure is used by financial analysts and investors for making better decisions. The sales and net income statistics shows that Amazon has more customers when compared to the customers of Barnes and Noble Company. With more customers, investor would prefer to invest in Amazon.com. By investing in Amazon.com, the investors will have better chances of receiving returns on their investments. Taking into consideration all my scholastic knowledge, business economics dictates that it is best to invest in a company where there is a higher demand for its products and services. Using my economics knowledge, Amazon.com is the better investment choice. The sales figures show strong proof that Barnes and Noble has lagged behind the current marketing strategies of Amazon.com. Consequently, it is better to invest in a company that uses better marketing strategies. With higher sales outputs, Amazon has proven itself to have implemented a better customer-based marketing strategy. Amazon’s marketing strategy includes incorporating the four P’s of marketing. Amazon sells quality products that are reasonable. By peaking at the company’s website, www.Amazon.com, the company sells the products at customer-based reasonable prices. The company’s selling its products in the internet offers the current and future customers the ease of buying the company’s products (place aspect of marketing). The company’s using a network of business partners to promote its online products complies with the promotion (advertising) aspect of marketing. Using the four P’s of marketing, it is highly recommended that the investment priority should be Amazon.com. CONCLUSION. Summarizing the important points of the above discussion, it is very clear that countless accolades should be given for Amazon.com’s financial and business performance. Using all the above discussion points, Amazon.com has outperformed Barnes and Noble Company. Unquestionably, Amazon.com should be the better investment alternative. References: Amazon, Amazon Products, retrieved November 29, 2012 from Amazon, Amazon.com Financials. Retrieved November 29, 2012, from Barnes and Noble, Barnes and Noble Products. Retrieved November 29, 2012 from Boxwell, M. (2011). Make an Ebook: The Complete Guide. New York: Greenstream Press. Byers, A. (2006). Jeff Bezos: The Founder of Amazon.com. New York: Rosen Press. Cummings, T. (2009). Organization Development & Change. New York: Cengage Learning Press. Fiore, F. (2006). Launching Your Yahoo Business. New York: Que Press. Lussier, R. (2011). Management Fundamentals: Concepts and Applications. New York: Cengage Learning Press. Megginson, W. (2005). Introduction to Corporate Finance. New York: Cengage Learning Press. Morgan, K. (2009). Barnes and Noble: Groundbreaking Entrepreneurs. New York: ABDO Press. Plukett, J. (2008). The Almanac of American Employers 2009. New York: Plunkett Press. Plunkett, J. (2008). The Almanac of American Exmployers 2009. New York: Plunkett Press. Schlie, E. (2011). Simply Seven: Seven Ways to Create a Sustainable Internet Business. New York: Palgrave Macmillan Press. Seperich, G. (2006). Managing Power and People. New York: Sharpe Press. Read More