Glob Issues In Business (Barn N Noble going to Ireland) - Essay Example

Barnes and Noble in Ireland Module Identifying Global Business Opportunities In determining the market and feasibility for Barnes and Noble to open stores in Ireland, the organization must look at competition, need, market and other aspects of book readership and sales in Ireland. The largest online and offline bookstore chain in Ireland, Eason and Sons, carries a wide range of books for a wide range of readers and uses. The largest bookseller in Ireland carries college school books, new releases, popular Irish titles, popular titles of American authors, many well known classic British authors, such as Yeats and even the newest Harry Potter novel, Harry Potter and the Deathly Hallows. Eason and Sons has nearly 60 retail locations throughout the four major regions in Ireland. Barnes and Noble would likely become a formidable competitor to Eason and Sons with similarly locates stores. Books appear reasonably price, with the Harry Potter novel at 13.41 pounds, which converts to 18.09 U.S. dollars. Barnes and Noble sells the same title in the U.S. for 20.99. Competitive pricing is feasible with fewer chain stores in Ireland. Barnes and Noble has more competition in the US from both similar bookstores such as Borders and online booksellers such as USAbooks.com. Ireland has many single location booksellers that also offering most of their titles online. Although selections are not as extensive with booksellers such as The Book Nest, located in Sligo, they are limited sources of competition for Barnes and Noble. Competition in Ireland also comes from Amazon.com and booksunlimited.ie, known for selling books at reduced cost. Strengths for Barnes and Noble come from its American and Universally sought after titles, which the company already stocks, Strengths also come from the Bookseller’s features of its online store, such as the individualized shopping cart, customizable searches and customer ratings. Undoubtedly, Eason and Sons has also added as many customizable features as possible within its online store, to compete with Amazon in Barnes and Noble in Ireland 2 Slough, England. Barnes and Noble is ready with similar features. Weakness comes in lack of access and knowledge of popular Irish titles. Barnes and Noble must hire managers in Ireland, who are knowledgeable with books that are in demand, must learn the course books and titles that are used in educational institutions and establish relationships with suppliers in Ireland. Internet usage in Ireland is slightly lower than in the U.S. “50.2% of Irish households have internet access,” (Internet World Stats) compared to over 65% in the U.S., which reduces online sales opportunity slightly. The Eason and Sons online storefront is quite a bit more organized and more family friendly than Barnes and Noble’s online storefront. Amazon will need to optimize its online store to compete with Eason and Sons. While online book sales in Ireland may not be comparable, Barnes and Noble does have an opportunity to provide the types of brick and mortar bookstores that are more welcoming and relaxing, such as the Borders café style stores. Barnes and Noble also offers music CDs to its customers. As Eason and Sons does not offer music, Barnes and Noble can take advantage of the opportunity to increase sales in Ireland. Barnes and Noble can take advantage of the current controversy surrounding Amazon’s move of its call center from Slough to the Irish Cultural Center in Cork, due to “superior language skills ”(Williams, 2006). Critics point out that Amazon has not been honest in providing reasons for the move. They believe that the move is due to tax breaks and other financial incentives, as fewer people in Ireland are fluent in a second language than in England. Such events open the door further for Barnes and Noble to establish itself and trustworthy and customer-centered. Barnes and Noble must pay close attention to how it conducts its sales in Ireland, as one wrong move, such as that of Amazon, can be a threat to its success in Ireland. The only other real threat for Barnes and Noble is in failure to Barnes and Noble in Ireland 3 meet or surpass the reputation of Eason and Sons. Module 2: Analyzing International Competitors Competition from other bookstores in Ireland is fragmented. Amazon, with its bulk purchasing of popular titles and wholesale or below retail prices does compete with Bookstore chains such as Eason and Sons, but not to the degree that another company such as Price.com in the U. S. will compete. Eason and Sons does not face competition from similar bookstore chains in Ireland, as Barnes and Noble does with Borders. The U. S. bookseller has a competitive advantage in providing the most desirable titles such as the most recent Harry Potter novel due to existing supply chains. It also may have an advantage with its book club membership program, which offers members 10% to 40% savings on its books, for a fee of $25.00. This is especially desirable avid readers and college students who purchase books frequently. One of Barnes and Noble core competencies is its streamlined and customizable online shopping processes with shopping cart, membership and discount offerings, search option and store locator. Another competency is its streamlined supply ordering process. Barnes and Noble has “deployed the SupplyWorks program in all of its Barnes and Noble stores,” and “has been integrated with Barnes and Noble’s intranet” (CRM Daily). With the standardization of such processes, the bookseller is able to monitor its supply chain processes and related costs of each individual location from its headquarters. Keeping such measures of standardization in stores it operates in Ireland will make decision making easier on a corporate level. Barnes and Noble does not necessarily need to move its corporate headquarters to Ireland from the start, though it may decide to do so at a later date. Challenges come when overseas suppliers are not able to easily access or link to Supply Works. Some customization may be required to work with Barnes and Noble in Ireland 4 suppliers who provide the Irish titles the bookseller offers. Barnes and Noble offers a standard or typical mix of book and cd titles in its stores. The standard mix that it offers in the U.S. may need to change in Ireland, depending on desirability and taste of its Irish customers. Standardization of online store features is important for Barnes and Noble to compete with both Eason and Sons and Amazon, as both offer many desirable features that make using the online stores easier for customers. Customization may be more desirable for physical store locations, based on the cultural differences and lifestyles among the different regions. For instance, regions with a younger population and located near colleges or universities may include a café in their stores where students can hang out and enjoy coffee, study or listen to music. Other locations where the population is mostly older may want to provide a hot cup of coffee, and where customers might travel farther, some breakfast and/or lunch options. In the U.S., bookstores that include cafes have been operating for about a decade, and are increasing, suggesting they are in the growth stage, but nearing the maturity stage of their life cycle. The typical brick and mortar only bookstore is in the decline in the U.S. Likewise, in Ireland, the brick and mortar bookstore is in the maturity stage, nearing decline, as internet usage increases. Cafes are in the growth stage in Ireland, as the number of students moving to the cities to work and study increases, so cafe style bookstores in Ireland present a new opportunity for Barnes and Noble. The oldest businesses in Ireland, like textile and dish ware manufacturers are more automated, reducing demand for skilled workers. Demand for more educated workers such as managers and automation programmers increases. Location of physical bookstores near colleges and educational institutions becomes more imperative. Most new corporate business in Ireland comes from foreign multinational Barnes and Noble in Ireland 5 corporations. Many such as Microsoft, Intel and Pfizer also own subsidiaries set up mostly for development, with the patent tax exemption and corporate tax rate of 12.5% in Ireland. Prior to the influx of foreign corporations, “Irelands economy was known more for its failures: high unemployment, high emigration, and the loss of skills that produced public debts and a general malaise” (Finfacts Team). Though Irish culture is rapidly changing and becoming “Americanized,” the increased American productions in Ireland creates a feeling of pride for Ireland’s contribution to American history, and a new appreciation for Irish historical and cultural traditions. Some skepticism does exist, however, as demonstrated by the feeling of mistrust that many express over Amazon’s reasons given for relocating its call center. Module 3: Assessing the Economic Geographic Environment Barnes and Noble does not need to use shipping ports and waterways as its American titles can be shipped from its warehouses in the United States. As relationships with Irish or British suppliers will be established for Irish titles, shipping of books will likely occur via land. Barnes and Noble will make use of phone lines and other routes for establishing internet service. Wireless and high speed DSL type services are available in Ireland, though more traditional phone lines may be required in some areas, just as in the United States. Despite some skepticism in Ireland, the economic growth provided by American and other foreign companies has provided more opportunities and a better standard of living for most Irish citizens. More of the Irish population are receiving benefits of higher education than ever before. Barnes and Noble physical book stores will create a need for sales staff, managers and technicians by locating physical stores in Ireland. This will give students and educated professionals more opportunity beyond the call Barnes and Noble in Ireland 6 center environment of Amazon. The economy in Ireland has been stable for the past two decades, particularly during the ‘Celtic Tiger’ era of the 1990s and only saw a slight decline just after 9/11 events. The Irish economy ranks second among Eruopean Union nations to number one ranking Luxembourg. Though the Irish economy is booming, economist warn that as construction accounts for a large portion of job growth, “any slowdown in Irelands vibrant housing market would have ramifications for continued GDP growth”(U.S. Department of State). The per capita GDP for Ireland in 2006 is $44.087, compared to that of the U.S. for the same year at $43,444. The figures indicate that business should be good for Barnes and Noble in Ireland, provided it becomes knowledgeable about Irish readership and purchasing habits, particularly for books and music CDs. Discretionary income, or that left over after paying for essentials, is what will be used to purchase books in Ireland, with the exception of those used for college courses. As indicated by the 2006 per capita GDP, it is likely that book sales will be steady for Barnes and Noble, given no drastic economic changes occur in Ireland in the near future. Module 4: Assessing the Socio-Cultural Environment In Ireland the highest population exists in the 0-14 age range, at 21% of the total population, followed by 17% made up of the 25-34 group. The 65 and older group makes up merely 11% of the population. Those under age 25 make up 43% of Ireland’s population, though the birth rate is declining. The “peak number of births was recorded in 1980”(Ireland-information.com). The largest age group in Ireland will read children’s books, short stories, poetry, novels and will use large quantities of instructional books for their education. In the U.S., Barnes and Noble focuses on the largest segment which is the ‘baby boomers’ born from 146 to 1964. The largest Barnes and Noble in Ireland 7 segment in the U.S. reads novels, mysteries, self-help guides, travel guides, financial and investment topics. This age group also begins to require large print and has a well developed taste for particular authors and writing styles. In many ways they are a more difficult group to please. Barnes and Noble must keep in mind the largest age group it will cater to in Ireland. New authors from the U.S. will be easier to introduce to an age group that has not necessarily developed preferences or favorite authors yet. On the other hand, the book seller will need to increase orders of children’s books and keep up with the latest child authors in the U.K. Barnes and Noble also must carry school books or titles that assist children with their studies. History, Math, Social Studies, Atlas, Encyclopedias and others are used frequently by school age children. Most literature is read in English, as very little traditional Irish language is spoken, though children must learn both languages in school. All children of Ireland are required to attend school from ages 6-15. Public or State-funded schools are the norm, with very few private schools. Children study all subjects in the first and second levels, which are the equivalent to elementary and middle schools in the U.S. Education is of great importance in Ireland and the literacy race equals that of the U.S. and all other nations within the EU. There are two public colleges in Ireland, Trinity College in Dublin and National University of Ireland, with campuses in Dublin, Cork, Galway and Maynooth, The two private colleges are The University of Limerick and Dublin City University. Barnes and Noble must strategically locate its physical stores so that most college students can easily access them by any means. Teens in Ireland love their music and listen to CDs like children in the U.S. Music styles are very similar and the company has an opportunity to, again, introduce more musical artists from the U.S., while locating Barnes and Noble in Ireland 8 popular Irish artists as well. Service sector jobs account for over 60% of jobs in Ireland, though industry is the largest contributor to economic growth. There are well over 600 American companies in Ireland, along with others from Germany and the U.K. Over 600,000 workers in Ireland work for foreign companies located in Ireland and Irish workers are known for their friendliness and hard work. Barnes and Noble will not have much trouble finding skilled, educated workers for their bookstores and even some technology workers to oversee the technical aspects of its supply chain. Technology jobs are increasing as companies such as Microsoft and Intel have operations and development centers in Ireland. There are also increasing third level, or college level technology programs of study to meet this demand. Ireland is known for its ‘pub culture’ which has not changed much, other than the increasingly younger age of its patrons. Keeping this in mind with setting up its bookstores, Barnes and Noble can easily design café style stores with a pub atmosphere in locations near large industrial and service job centers. Though traditional families are still the norm in Ireland, bookstores need to focus on accommodating the largest groups in each region, while offering something for the other groups as well. Legislative initiatives of the early 1990’s have focused on economic improvement and development for all Irish citizen’s. Ireland welcomes foreign investments and businesses, and relies on them to keep the economy strong. Tax structure for business is lower than in any other offshore location for U. S. companies. Combined with a well educated work force, such environment creates an opportunity for Barnes and Noble to become very competitive and successful in Ireland. Barnes and Noble in Ireland 9 References barnesandnoble.com. Accessed 22 May, 2007 from http://search.barnesandnoble.com/booksearch/isbninquiry.asp BooksIrish.com. Accessed 21 May, 2007 from http://www.BooksIrish.com booksunlimited.ie. Accessed 21 May, 2007 from http://www.booksunlimited.ie Eason and Sons, online. Access 23 May, 2007 from http://www.eason.ie Internet World Stats (2003). Accessed 22 May, 2007 from http://www.internetworldstats.com/eu/ie.htm Ireland-Information.com Accessed 23 May, 2007 from http://www.ireland- information.com/reference/educat.html Finfacts Team, (2005). US Multinationals Overseas Profits: Ireland’s patent income tax-exemption may fund over 5% of Irish Government annual spending in 2006. Finfacts Business News Center. 21 Nov. ed. U.S. Department of State, Bureau of European and Eurasian Affairs, (2007). Accessed 22 May, 2007 from http://www.state.gov/r/pa/ei/bgn/3180.htm. Wrolstad, J. (2001) Barnes and Noble Deploys SupplyWorks System. CRM Daily. Williams, C.,(2006). Amazon in Ireland? More Like Amazon in Liarland! The Register. 06 Mar.ed. Read More