Strategic Issues and Opportunities for Barnes and Noble - Term Paper Example

Strategic Issues and Opportunities for Barnes and Noble Introduction The strategies that are implemented among organizations are able to determine their success or failure. This not only coincides with the beginning initiatives, mission statement and foundation of the organization. There is also the need to build various types of strategies that are dependent on the growth and changes that are occurring in society. When evaluating the bookstore of Barnes and Noble, it can be seen that specific strategies are creating problems with the changes and trends that are currently within social and cultural expectations. Specifically, this bookstore is required to match the information and technological specifications that are in demand. By doing this, there is the ability to create a different set of strategies and to manage the business in an alternative manner. Further, this will provide more alternatives to create growth among the company. Description of the Organization The mission of Barnes and Noble is to provide a wide variety of high quality products within the retail industry. Specifically, there is the need to provide a diverse range of books that aren’t available among competitors. The styles and innovations of selling books is one that is incorporated into the mission statement, specifically with a way of finding different ways to bring more varieties of books to consumers and to offer customer satisfaction by offering diversity among readers who are interested in various genres and forms of writing. The corporation began in 1960 with Leonard Riggio who began to sell books while he was going to college at New York University. As a bookseller, he decided that the services and structure of the college bookstore was inconvenient. The solution that Riggio thought of was to open a competing bookstore that provided more variety and options for students. The initial name of the store was SBX, also known as the Student Book Exchange. By the 1970s, the bookstore was one of the most popular in New York and provided over 150,000 textbooks to students while serving over 600 campuses at a national level (Barnes and Noble, 2010). The 1980s and 1990s with Barnes and Noble led to one of the most popular times for the company. By this time, the main approach was to offer discount rates of different bookstores, and was considered one of the first competitors to offer both variety within the books offered as well as lower prices to consumers. This also led to expansions throughout the 1980s to different states, which allowed Barnes and Noble to become one of the leading bookstores on a nationwide basis. They are also known as one of the first bookstore providers to evolve on the Internet and have created niches such as selling used books and out of print titles. Today, Barnes and Noble is not only working with these specific methods, but also has begun to print books with a specialized book publishing company, which is combined with the Internet and physical locations of the store. The brand of Barnes and Noble has been able to expand as one of the top providers in books, especially throughout the 1980s and 1990s. The consumer demand has followed this with a sense of loyalty that matches the main attributes of the bookstore with the brand name and ability to provide diversity and quality with books (Barnes and Noble, 2010). Even though Barnes and Noble is known as one of the largest providers of books at a national level, it is now facing several new problems because of the economic climate and trends within the social needs of consumers. The Barnes and Noble national locations are beginning to move through layoffs, downsizing and are closing several of the physical locations for books. The company has now officially closed several of its smaller branches as well as some of the beginning stores, including the locations in New York that initially began the business. The main consideration for the closing of the stores is because Barnes and Noble can no longer sustain the monetary value of the store. Rising rents and the inability to stay in demand through physical locations are the two main problems that are being noted. The continuous downturn in the economy, as well as changing competitions is known to add into the main problems that are associated with the bookstore. More importantly, most consumers are choosing to go online for their books, not only from Barnes and Noble, but also through competitors such as Amazon.com and Apple. These competitors are offering lower prices for the books as well as the same quality. More importantly, more variety is available through the online book stores, which is taking Barnes and Noble out of the market for being one of the largest and most diverse providers of books. As online bookstores continue to expand at both a national and international level, Barnes and Noble are left with a change in the brand name. The competition for pricing, value and diversity that is available with the books is now beginning to alter according to the new competition that is beginning to set businesses up at a different level while providing opportunities for new consumer demands and trends (Pruitt, 2010). Strategic Issue and Problem Even though Barnes and Noble began with a mission, vision and strategic plan for book consumers, the plan is now being overtaken by competition as well as changes that are within technology. The first main issue that is being noted is based on the rising prices of rent. The economic changes in the United States have led most of the commercial buildings to move prices to almost a double amount. For booksellers that are sustaining at the same level from past years is the inability to meet the commercial building rates, which is causing a loss of money for the corporations. The inventory that takes a certain amount of money, payment of employees and extra services and products all have added into this increase, which is making the physical locations difficult to maintain and sustain at different levels. When combining the costs with the fluctuations of the market, it makes it difficult to retrieve the amount needed to sustain the main corporations at a physical level. Most economists are noting that there won’t be a drastic increase in the economic changes occurring, which is leaving several of the physical locations with the inability to meet the demands of consumers at a physical level. The information age is known to contribute with this, as most consumers are moving into trends that are based on Internet expectations and vitality. The concept of the new economy, which is based through Internet portals is changing the productivity growth, capital accumulation and is directly impacting physical locations. This is combined with the recession that is currently occurring, which is leading most consumers into a different set of trends based on money saving alternatives and the need to find cheaper prices from different retailers (Brookings Institution, 2001). The second strategic issue that can be noted through Barnes and Noble is from the technological competition that is taking place. Barnes and Noble are known for having an online bookstore in which individuals have the ability to be a part of. However, others are also competing with Barnes and Noble through technological means. Most of the competitors are not responsible for physical locations but are looking at components that are strictly online. Since the mission, vision and infrastructure of the bookstore is set for technological growth, it immediately creates strong competition against Barnes and Noble. In return, the physical basis of Barnes and Noble is immediately being lost to other competitors who are basing their business around technological systems. The pricing structure, strategies for sales and other components are then creating difficulties with sales for Barnes and Noble, while allowing other competitors to take over the main revenue for consumers that are interested in books not only at a national level, but also on a global basis. It should be noted that technology as well as alterations in trends among consumers is directly related to the movement into the information age. Currently, there are trends for those in society to move into different online portals that are considered trustworthy and which have a strong brand name. For this to work effectively, consumers are being drawn toward establishing what is known as web intelligence. The more that a consumer knows about technology, the more likely they will establish a sense of trust among businesses as well as others that are online. Media, communication portals, education, marketing and publishing are all known to contribute to the trust levels among consumers as well as the web information that is available. To further this, there is the need to create a stronger level of web intelligence among consumers and to begin to establish stronger levels of understanding. Those that are technologically savvy are also creating different ways of educating others while creating trends among users on the Internet for established businesses (Yao et al, 2001). For Barnes and Noble to continue to compete is the need to work with those who have a high level of web intelligence and to become a part of the social trends that are incorporated into those who are interested in becoming online consumers. Techniques and Models for Evaluation For Barnes and Noble to continue to compete among other booksellers is the need to create new techniques and models for those who are selling books. The main concept that has to be considered is to change the concept from being a physical bookstore to one that is based online and which provides global opportunities for those interested in books. Diversifying the number of books, altering prices and changing the main structure to fit with the information age will help Barnes and Noble to begin to transfer over the profits from the physical locations to technological additions. More importantly, the changes that are occurring in the market with physical locations and demands will not be affected at the same level and will provide Barnes and Noble with opportunities for physical and technical growth. The first option to look into for Barnes and Noble is to begin restructuring the online database that carries different books. For this to work effectively, Barnes and Noble has to reconsider the infrastructure. Establishing an e – business strategy that is based on the main book competitors of Amazon and Apple will help Barnes and Noble to increase revenue and demand. The first part of this strategy is to analyze exactly how Barnes and Noble are moving against other performers that are working within the industry. The analysis should include an understanding of the products, price and target market of other bookstores as well as how they are able to move into the competition of others. The analysis can then lead into strategies that help to redefine the brand of Barnes and Noble. Currently, the bookstores are basing their main sales on low – cost informational sources that are available as well as diverse sets of products. For Barnes and Noble to compete with this, they will need to analyze how the competition is working with this business plan as well as what they can offer to remain with the main Internet based bookstores at a global level (Clay et al, 2003). The second consideration to make for Barnes and Noble when competing with others through the bookstore industry is to build the brand name at a different level. Currently, Barnes and Noble is a known industry because of the brand name and the expectation of providing a diverse number of books through physical locations. For Barnes and Noble to continue succeeding, there is the need to create a stronger brand name not only through physical locations, but also online. The main ideology is to build a brand that creates trust through online strategies. More importantly, Barnes and Noble will begin to change the way in which it is providing books, not only through a national focus, but also at an international level. To do this effectively, Barnes and Noble will have to look at the buying behaviors of those that are using technology. From this, there has to be a change in the reputation of Barnes and Noble for both physical and technological establishments. By doing this and by looking at buying behaviors, Barnes and Noble will immediately be able to change the way in which they work. The web strategy that will be developed will help to establish trust at a different level among consumers while building brand identity through the online portal that is similar to others that are selling online (Lim et al, 2006). For Barnes and Noble to continue to compete with others, there needs to be a transitional phase for the books. The main concept that needs to be considered is to offer a brand name that provides a sense of loyalty and trust to the store. Since the bookstore has existed for more years than others, there is an advantage from other competition that offers opportunity to continue building the brand name. Since Barnes and Noble are also opening a publishing company and have the established Internet basis, this can provide them with more options for expansion by using the brand name in a different way. Restructuring the main components of technology and using this with the combination of brand pricing will then provide Barnes and Noble with a new set of opportunities. For the brand identity of Barnes and Noble to work efficiently, there needs to be a change not only in the brand name, but also in the way in which the company is focusing on other competitors. Moving more into the information age is one of the components to consider. The driving forces of other competitors are to provide diversity at a global level through Internet portals. This is combined with the ability to use the technology available to provide lower prices among competitors. Lower overhead costs, the need to provide low amounts of inventory and the different components that are available for offering books through new technological innovations are allowing other companies to continue to move forward. While Barnes and Noble are working toward specific innovations, they remain behind in the competition and are unable to continue to gain momentum with the right perspective. Changing the analysis to finding competition through online portals will begin to change the way in which the corporation works with finding new avenues for sales. Conclusion The changes in retail and in bookstores are beginning to change in the United States because of consumer trends and social demands. The first way this is changing is through the recession in the economy as well as the rising prices on commercial buildings. For physical locations, this is providing new challenges and concerns that are needed for bookstores to continue to compete. This is combined with innovations in technology through businesses that are leading them into one of the main sources of competition. For Barnes and Noble to continue competing with their brand name is the need for them to change their strategies and focus for working online. The two components that are combined with this is to establish a different brand name as well as to create pricing strategies that work with the competition. By doing this, the business will be able to establish a stronger basis while creating a different sense of brand loyalty that is effective with different consumers. For Barnes and Noble, this strategy will provide sufficient growth and the ability for the company to remain established in a different manner. Word count: 2739 References Barnes and Noble. (2010). Mission and History of Barnes and Noble. Retrieved from: http://www.barnesandnobleinc.com/our_company/history/bn_history.html. Brookings Institution. (2001). Brookings Paper on Economic Activity. New York: Brookings Institution Press. Clay, Karen, Ramayya Krishnan, Eric Wolff, Danny Fernandes. (2003). “Retail Strategies on the Web: Price and Non – Price Competition in the Online Book Industry.” Journal if Industrial Economics(50), (3). Lim, Kai, Choon Sia, Matthew Lee, Izak Benbasat. (2006). “Do I Trust You Online, and If So, Will I Buy? An Empircal Study of Two Trust Building Strategies.” Journal of Management Information Systems (23), (2). Pruitt, A.D. (2010). “Century 21 Moves Up Town, Replaces Barnes and Noble.” The Wall Street Journal (September). Retrieved from: http://blogs.wsj.com/metropolis/2010/09/01/century-21-moves-up-town-replaces-barnes-noble/. Yao, YY, Ning Zhong, Jiming Liu, Sestuo Ohsuga. (2001). “Web Intelligence Research Challenges and Trends in the New Information Age.” Notes in Computer Science (2198). Read More