Comparison between Amazon.com and Borders Books - Essay Example

? Comparison between Amazon.com and Borders Books 11 January Introduction: Amazon.com represents an online website providing its customers with books as well as different other products. Online businesses and marketing being a highly common and significant business with several companies getting involved, the growth and maintenance of a company seems to be difficult in its own respect. It can be found that several online companies start their businesses and then without gaining success end their businesses as well. Thus studying about an online business would give some understanding on the business strategies that can be followed in order to avoid such failures in businesses. Another concern of the present study is the Borders Books that represents a bookstore publicly held spreading its business through a large number of stores and encountering different stages of business. Thus the current study focuses on the two different companies- Amazon.com and Borders Books- and conducts a learning on their histories, business approaches, management and marketing and how they have gone through their successes and failures and thus try to recommend some policies that might enable the companies to have better marketing conditions. History of Amazon.com and Borders Books: The Amazon.com Company was started in the year 1994 by Jeff Bezos. The origin of the company was in Washington. Bezos’ idea regarding the business was appreciated and investments were supported by Nick Hanauer who was a businessman by profession. Then the company had plans to go online and spread its business. Initially the business was not as shining as it is known to be in the present times. In the early times of its initiation, the website was not very attractively designed and hence lacked the attention of the customers. By the year 1995, a person named Tom Alburg helped the company through further investments and thus the website was designed newly which then started attracting customers. Gradually the company introduced several products and within a short span of time, the company gained huge success as well as profits (The History of Amazon.com, 2011). The history of Borders Books reflects the contribution of several stores of books that include the Borders, Waldenbooks and Brentano's. The Borders Bookstores were started by two brothers, Tom Borders and Louis Borders, in the year 1971. Initially the store was opened in Ann Arbor. Later stores were also opened in Michigan, Atlanta and Indianapolis. Their books were also sold through other booksellers. The first superstore of the company was established in the year 1985. By the year 1988, the Borders bookstores, which later went online, proved to be huge success and delivered efficiently (Peterson, 2012). Business Approach, Management and Marketing of Amazon.com and Borders Books: As far as the business approaches of the two companies are concerned, it has been observed that the Amazon.com and Borders Books both had its focus on the increasing sales and the satisfaction of the customers. While Amazon.com has been found to initially struggle and later on efficiently managed success till the present times, the Borders Books have been found to initially achieve success but later the company failed to maintain its position in the market and lost to bankruptcy. It has been found that the concept of internet marketing was much more effectively understood and utilized by Amazon.com rather than by Borders Books (Volcanic, 2009). Amazon.com had its focus on the customers’ preferences and the manner in which there website could be more attractive to them. Thus initially when the company had received financial assistance it focused on the design of the website that resultantly gained more customers for the company. The company was so concerned with the customers’ satisfaction that they even introduced systems to receive feedback from the customers, thus giving the customers the feeling of being significant. When the company encountered severe losses in 2001, it initiated new measures that could lead to the continued selling of their products and books (The History of Amazon.com, 2011). Borders Books had their initial strategies focused on the establishment of their bookstores in different locations that could reach out to their customers. With the online marketing becoming significantly prevalent and successful, Borders Group also turned their focus on the online selling of their books. However in their path of business, when difficulties in retailing had arisen, and the company had to suffer from losses, they lost their focus on the online website as well. They did not realize the utilization of the online marketing. By the time they could realize it was becoming late and they failed to make up their position in the market as they had in the early times (Peterson, 2012). From the success and failure stories of these two companies, their internet marketing capabilities and their levels of management can be reflected as well. It can be understood that the marketing and management capabilities of Amazon.com have always been more efficient that led the company to its current position of success. On the other hand, Borders Books have not been capable of keeping its constant focus on the website that it had initiated, and when it encountered failures in its business, it shattered its positive plans. Moreover, when ultimately the company tried to enter the business, it was unable to gain the attention that it looked for. It proves the lack of marketing and management power and ability of the Borders Group unlike the case of Amazon.com. Reasons for Amazon.com’s Success and Borders Books’ Failure: Amazon.com Company had in its initial business years suffered huge losses. In spite of such losses, the company was able to turn around and reach success at a level that the company is highly popular among its customers till date thus leading to success and profits for the company. Three reasons can be considered to have affected this success of the company. Firstly, the company had its focus on the customer satisfaction which led the company take measures that could attract greater number of customers. Secondly, the company’s marketing capabilities are strong that allowed the company to realize the significance of the online marketing and take utmost advantage of the online facilities for its product selling. Thirdly, the management team of the company proved to be highly efficient that did not allow the company to lose its focus. Rather, when the company was suffering from losses, the team planned for new strategies and selling their products through other sources that effectively helped the company to come back to its own position in the market. Borders Group on the other hand initially gained success but later they lost their position to an extent that they had to file Chapter 11 for bankruptcy. The status of this company also reflects three major reasons that might have led to the failure of the company. Firstly, the company’s focus on the delivery and functioning of the products/books was not efficient enough to have been able to continue even in times of difficulty. Even though the company initially gained profits, the strategy of the company could not prove to be successful in maintaining its position. Secondly, the online marketing capability of the company was less. It can be understood that the company did not have expertise in this field and it could not realize the importance of the online support. Thirdly, the company’s management team proved to lack focus and effectiveness and lost their power once they were encountered with losses. They could not come back to their position in the market. It is necessary to reflect at this point that the management teams of both the companies had tried to come up with their modified and changing disciplines to cope up with the new strategies of the companies focusing on online marketing. However, the success and failure, respectively for Amazon.com and Borders Books resulted from the ability and inability of the companies to continue with the management of the strategies that they planned for. While Amazon could manage to continue and keep its focus, the Borders Group failed. Recommendation: It is necessary that companies should prepare and be ready to adapt themselves to the changing market conditions. The following three recommendations might help companies in such scenarios: The management teams of companies require making decisions on planning for unexpected events as well when they plan strategies for their businesses. This is primarily required in cases when a company incurs huge losses. The company’s should recruit such people who are expert in the understanding of different strategies that would also include the online marketing facilities as well. Proper knowledge is significantly required for the success of a business. The marketing plans of a company should be conducted by a company considering all the difficulties that might be encountered in the long run and in any situation, the company should not lose its focus on its objectives and customer satisfaction. Conclusion: The study focused on the business results of two companies that entered into the industry of online marketing. While Amazon.com initially struggled but ultimately proved to be successful till the present times, the Borders Books initially gained success but failed to continue its position in the market. It can thus be concluded from the study that only initiating a business is not sufficient to gain success. It is important to have proper knowledge about the industry, about the policies that would prove to be beneficial for the company and help the company to maintain its success. Moreover, the marketing capabilities and the efficiency of the management teams are significant factors that companies need to take into consideration such that in situations of crisis, the companies are able to manage to handle the crisis and turn around to their original successful business position. References 1) Peterson, V. (2012). Borders’s Group History- The History of the Borders Group Chain of Bookstores, about, Retrieved on January 12, 2012 from: http://publishing.about.com/od/BooksellersAndBookselling/a/The-History-Of-The-Borders-Group-About-The-Borders-Group-Chain-Of-Bookstores.htm 2) The History of Amazon.com (2011), essortment, Retrieved on January 12, 2011 from: http://www.essortment.com/history-amazoncom-21180.html 3) Volcanic (2009). Be Relevant! Amazon.com vs Borders.com email marketing strategy, webdesigncompany, Retrieved on January 12, 2012 from: http://www.webdesigncompany.net/be-relevant/ Read More