An E-Business Analysis - Research Paper Example

­ and number An E-Business Analysis of BarnesandNoble.com ­ submitted Executive Summary Barnes and Noble.com serve millions of consumers who have preferences for movies, books, and music. The company has effectively served its customers both offline and online. Barnes and Noble.com has employed different strategies in order to maintain its competitive advantage within the online book industry. Internet has played a significant role in asserting its position within the industry. Among the e-commerce metrics used by the company is the brick and mortar. e-Commerce is faced with four major barriers such as legal issues, language barrier, market access issues and financial issues. An E-Business Analysis of BarnesandNoble.com Company History and Background Barnes & Noble history can be traced to its acquisition in the early 1960s by Leonard Riggio; this is the period when he began his bookselling profession while in New York University. By 1970, the company was succeeding and it included 6 other college bookstores; it acquired trade name Barnes & Noble and the flagship bookstore in Manhattan. Between 1970s and 1980s the company made several significant moves. In 1974, it became the first bookseller in U.S. to put an advert in television; the “Of Course! Of Course!” advert. In 1975, Barnes & Noble made a bold move and became the first bookseller by offering discount books in the United States; it offered New York Times bestsellers at a discount of 40 percent off the publishers’ list prices (Barnes & Noble, Inc., 2011). The company has been offering book services for close to 25 years, it began with the mail order catalogue in 1970. The company tested selling the books online in the late 1980s through Trintex, an early generation venue. Trintex was a joint venture between IBM & Sears. The company sold its books on the CompuServe in the mid-1990s and later it opened a full-fledged a book superstore on the America Online in 1997. Barnes & Noble.com website (www.barnesandnoble.com) was launched in May 1997. Presently, the company’s website is the largest store and it enables the customers to order a book regardless of the time and place. The consumers have access to millions of out-of-print and used book titles, music DVDs and CDs through Barnes & Noble.com (Barnes & Noble, Inc., 2011). The company’s publishing has been expanded through the purchases of SparkNotes.com and Sterling Publishing in 2001 and 2003 respectively. In 2009, the company acquired Fictionwise, a company leading in eBook in the marketplace. The company has its headquarters in New Jersey; it was founded in 2000 by Scott and Steve Pendergrast. In July 2009, Barnes and Noble introduced the world’s biggest eBookstore (a digital strategy). In October 2009, the company launched nook, the most advanced eBook Reader (Barnes & Noble, Inc., 2011). Needs Addressed BarnesandNoble.com and the Customers Pursued Barnes & Noble provides the online customers the Web’s premier services such as eBooks, toys & games, DVD and Blu-ray, books, magazines, music, video games and other related services and products. The company is capable of delivering over 1 million titles to its consumers making it the largest online bookseller. With the many titles in the warehouse, the consumers are offered an easy way to find what title they want through the company’s search engine (Barnesandnoble.com, 2011). The search engine offers the customer the capability to locate the books by author, keyword, or title in the shortest time possible. To assist the consumers further, the company provides reviews and descriptions and the company’s See Inside program allows the consumer to read excerpts from a number of titles. Other things offered to the consumer include customer reviews and editor recommendations on a number of titles. The launch of nook (the most advanced eBook reader with a color touchscreen) has made it easy for the readers to download books in seconds (Barnesandnoble.com, 2011) Other than books, there are other services and products offered by the company. Barnes & Noble Kids offers the best in children’s videos, music, and books. The section is further strengthened by age-based recommendations and specialty stores that provide Harry Potter and other major titles; this makes it the ultimate place for the kids. For movie lovers, Barnes & Noble is the place to be, the company’s DVD & Blu-ray Stores over 60,000 movie titles and they range from Art House rarities, Kid’s, and Blockbusters movies. The movie previews are numerous and this makes the site customer friendly (Barnesandnoble.com, 2011). The company’s Music Store is the premier site for Jazz, World Music, Rock, and Classical; the store also offers free downloads, exclusive interviews, over a million sample audio clips, numerous music reviews and artist biographies. The following product lines have been added in the recent years and they include; (a) Home & Gift section – offers office items, electronics, and writer’s aids, (b) web Toys & Games store that is filled with unique hard-to-find titles, (c) Magazines stores that provides thousands of subscriptions, and (d) PC & Video Games store that is meant to fill the desires of the gamer with numerous new and used titles, accessories, strategy guides, and consoles (Barnesandnoble.com, 2011). The Role of Internet in Strategy In 2008, Barnes & Noble unveiled a strategy to keep the customers on its Website. Barnes & Noble Inc. ventured into social networking phenomenon by launching an interactive program, My B&N. The integrated web service gives the users the capability to develop their personal profiles around their preferences in movies, literature, and music and they can choose avatars and pen names from a collection of characters, switch the consumer ratings and reviews, and get updates on events in the local stores. The new feature offers the customers the reason to keep close to the Barnes & Noble site, permitting the bookstore chain to advertise their specials better (Briggs, 2008). The company has committed itself to making every aspect of the shopping and browsing in the company’s online store pleasurable and easy. B&N.com has adopted a strategy of putting focus on the sale of a wide variety of education, knowledge, entertainment, and information related products. There are continued efforts to improve the layout, navigation, and design of the website as well as the competitive performance metrics. This is in regard to the page download time and the search function speed. There are efforts to strengthen and expand the strategic alliances with content providers and third-party websites to attract users to the company’s online stores. The brand name and the consumers have been exposed to the online stores through marketing agreements with main contents sites and Web portals such as Microsoft, American Online, and Lycos (Durkin et al., 2000). The use of over 500 Barnes & Noble retail superstores network and the relationship with Bertelsmann (it is among the largest integrated media company in the world); this will assist bn.com to get a considerable advantage in co-promotion programs and cross-marketing. This has further been assisted by the negotiations with the distribution partners, media companies, and online portals (Durkin et al., 2000). BarnesandNoble.com EC Metrics Electronic commerce frequently demand fast decision making cycles. The organizations have to meet simultaneous requirements of having short response times, becoming consumer oriented, and maximizing quality and minimizing the costs. Linking the Balance Scorecard concept and Just-in-Time (JIT) philosophy increases the effectiveness of both the philosophy and the concept. JIT is defined as a collection of manufacturing philosophy or concepts and techniques of conducting business that reduces the inventory levels and enjoys the benefits of that venture. A number of companies and in particular online companies such as Amazon UK and BarnesandNoble.com have engaged in electronic commerce; they have effectively utilized the JIT approach to decrease the inventory costs. The control over activities is stressed rather than the costs and at the same time maintaining an organizational long term approach to assessment (Ramesh and Tiwana, 1999). Barnes and Noble bookstore chain is click and mortar businesses that possess a number of stores in the states and operates on its Web site an e-commerce. The section of the business that produces Internet sales is indulged separately from the section of the business that controls the local stores. The company does not charge sales tax on the internet. The Website and the stores sell a number of identical products; they are involved in joint advertising and do their best to create a brand identity common in the minds of the potential consumers (Mazerov, 2001). BarnesandNoble.com Online User Types and e-Commerce Considerations Barnes and Noble e-commerce infrastructure handles and drives the Website that receives 10 million unique visitors every month. The Website offers “real time selection on an in-stock inventory of about 1 million titles” (Maguire, 2002). Barnes and Nobles combines its brick-and-mortar and online outlets into a one shopping experience. When a consumer in a Barnes and Noble store makes a request to a book that is not in the stock, the bookseller accesses the online inventory and ensures the book is delivered to the store or the consumer’s home; this depends on the consumer’s preference. Leveling Barnes and Noble position in the offline and online world, the consumers can return their online purchases at the local store (Maguire, 2002). The Impact of Internet Regulation The entrance of Internet has witnessed rivalry within the retail channels online. Industries that have low entry barriers face enormous competitive pressure in the process and thus, the reduction in the market prices and aggregate profitability. IT infrastructure investment and other branding and marketing costs tend to increase the entry barriers. Within the online book industry, Amazon spends approximately 32 percent of its sales on advertising and Barnes and Noble.com spends approximately more than 50 percent of its sales on advertising (Cassiman and Sieber, 2002). “Offline, Barnes and Noble and Borders spend only between 14% and 20% of sales on advertising” (Cassiman and Sieber, 2002). The entry costs seem to be low for some dotcoms; this is because the new companies are capable of outsourcing their IT software and infrastructure, thus decreasing their initial investment. The easy entry to the capital market decreases the financial entry barriers. Thus, the increasing rivalry will eventually lead to an increase in price competition (Cassiman and Sieber, 2002). EC Security Used By BarnesandNoble.com The EC security is found within the privacy principles of the company. Barnes & Noble values its consumers and understands that the customers care about their privacy and security of their personal information. Barnes and Noble Privacy Principles applies to the storage, disclosure, sue and collection of personal information that can be collected by the company when the customer interacts with Barnes and Noble in situations such as participation in the company’s Member program, visiting the company’s website or stores or when dealing with the customer service. Protection of the security and privacy of the consumer’s personal information is given priority at Barnes & Noble. The company does its best to make sure that the personal information is handled in a responsible and safe manner in accordance with the Privacy Principles; clarity, security and integrity (Barnes & Noble, Inc., 2011). BarnesandNoble.com Competitive Advantage in Technology Barnes and Nobles infrastructure consists of know-how that is related to the wholesalers and retailers and the proper information systems. The implementation of the just-in-time replenishment books system has led to high in-stock positions. The BookMaster system has resulted into better store level productivity through efficient means of cashiering, returns, and receiving processes. The online business has leveraged the existing back end operations and avoided extraordinary start-up investment. The distribution network has offered a considerable competitive advantage for the company. The company is able to deliver online services overnight to consumers at gross margins and this has permitted the company to provide deep discounts (Durkin et al., 2000). Barriers to Global E-Commerce The barriers to global e-commerce include the following; (a) legal issues – some of the legal issues include jurisdiction issues, user technology limitations, and privacy protection, (b) market access issues – the creation of an IT infrastructure that is able to accommodate all forms of data and users is desired, (c) financial issues – they include electronic payment systems, customs and taxation, and money exchange, and (d) language – language barrier is a big challenge (Cao and Schniederjans, 2002). References Barnes & Noble, Inc. (2011). Barnes & Noble history. Retrieved from http://www.barnesandnobleinc.com/our_company/history/bn_history.html Barnes & Noble, Inc. (2011). Privacy Principles. Retrieved from http://www.barnesandnobleinc.com/misc/privacy_policy.html Barnesandnoble.com. (2011). About Barnes & Noble.com. Retrieved from http://www.barnesandnoble.com/help/cds2.asp?PID=8184 Briggs, B. (2008). Barnes & Noble shoppers now can create ‘literary identities’ online. Retrieved from http://www.internetretailer.com/2008/10/29/barnes-noble-shoppers-now-can-create-literary-identities Cao, Q. & Schniederjans, M. J. (2002). e-Commerce operations management. London, UK: World Scientific. Cassiman, B. & Sieber, S. (2002). The impact of the internet on market structure. Barcelona, Spain: University of Navarra. Durkin, M. A., Kass, C., Modi, T. & Ulin, M. (2000). Strategic audit: Barnes & Noble. Retrieved from http://teknirvana.com/documents/BarnesAndNoble.pdf Maguire, J. (2002). Case study: BarnesandNoble.com. Retrieved from http://www.ecommerce-guide.com/news/trends/article.php/1451131 Mazerov, M. (2001). A five-year extension of the internet tax “moratorium” would further erode the tax base of states and localities. Retrieved from http://www.cbpp.org/cms/?fa=view&id=351 Ramesh, B. & Tiwana, A. (1999). Towards a composite metric for electronic commerce ROI: An extension of the balanced scorecard. Atlanta, GA: Georgia State University. Read More