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Macro Environmental Factors-Pestle Analysis - Case Study Example

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This study "Macro Environmental Factors-Pestle Analysis" discusses an analysis of the history of Borders Group and its subsequent liquidation indicated that failure to adapt to market changes and technological advancement coupled with faulty investments and financial decisions lead to the demise…
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Macro Environmental Factors-Pestle Analysis
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Download file to see previous pages The reality segment itself consisted of airport stores and other small stores opened at various locations in the US, Europe, Australia, and Singapore. This structure was a result of various acquisitions that have taken place over the period of time.  The founders of this group are also the pioneers when it comes to superstores in published books industry after Barnes & Noble (Peterson, 2011). The traditional image of small-scale alley shops was replaced by Tom and Louis Borders in 1971 when they opened major stores in different states. In addition to many published books available under one roof, their Book Inventory System which was originally designed to support their sales and inventory management, also formed a major part of the products that they were offering. Following Borders group’s stake in published books market, it was purchased by Kmart however the deal was not as successful as expected and later on lead to divestment in 1995. After this separation, the Borders group expanded its operations internationally in Europe, Australia and Singapore (Fundinguniverse, 2011). With over 500 stores working in the United States only, Borders group aimed at capturing a major share of the books industry. However, with the arrival of e-books, online versions and other electronic devices coupled with online libraries, the landscape of global published books industry changed in the late 1990s. Although Borders group attempted to retain its original stature through franchising and establishing self-owned stores however due to excessive market competition in physical book stores and also other market players like Amazon, Borders group faced aggressive competition. Due to this market condition, Borders group sustained immense losses and filed for bankruptcy in the United States followed by subsequent closure of over 30 stores only in the UK. As of now, all the directly or partly owned stores of Borders groups have been sold or closed down (Fundinguniverse, 2011). It is important to note that Borders group’s problem was not the changing market space and consumers’ demand but its rather sluggish approach towards the adaptation of changes. With major capital invested in physical stores, the cost of running the stores became extremely high. It did try to create an online presence in 2001 after the emergence of Amazon.com and other e-book retailers however the results were not encouraging enough. Where Amazon was in the market after 1995 and had a stable establishment by 2000, it was already too late for Borders group to compete with the diverse and highly personalized nature of service offered by it (Wasserman, 2012). After being unable to have a successful presence, Borders group formed an alliance with Amazon which proved fatal in the long-run. The alliance ended in 2007 with another attempt of forming online presence in 2008 however increasing overhead, operations and interest expenses along with many changes taking place in organization’s management, the group was struggling to stay liquidated which further resulted in further bankruptcy of the group in 2011. ...Download file to see next pages Read More
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