MGT CASE

Company Analysis Proposal Barnes and Noble 1. Which company do you choose for the project?

The company we are opting for is Barnes & Noble (B&N). o Barnes & Noble originated in 1886 with a bookstore called Arthur Hinds &

Company, located in the Cooper Union Building in New York City. o They are a content, commerce and technology company that provides customers

access to books, magazines, newspapers and other content across its multi- channel distribution platform.

o In 1992, with the acquisition of 797 bookstores, B&N turned into a nationwide retailer and at the end of fiscal year 1999, the second-largest online bookseller in the United States.

o It first began selling books online in the late 1980s in an early generation venue called Trintex, a joint venture between Sears and IBM, but the company’s website was not launched until May 1997.

o In 2011, Barnes & Noble became the last remaining national bookstore chain in America.

o Is a Fortune 500 company, the largest retail bookseller in the United States, and the leading retailer of content, digital media and educational products in the country.

o The company operates 658 retail stores (as of August 2, 2014) in all 50 U.S. states in addition to 705 college bookstores that serve over 5 million students and more than 250,000 faculty members across the country.

o Barnes & Noble operates in three segments: B&N Retail, B&N College and NOOK.

2. What major issues is the company facing, such as declining demand of existing products, saturated domestic market, obsolete technology, or others?

They face two major issues, one of them being a decline in demand for tangible books and the other being the failing launch of their “Nook” line.

Decline of ‘brick and mortar’ stores in the book and entertainment business sector and the extra expense that goes along with having a tangible place for retail.

The company has to compete with other companies that sell a similar service like Amazon and Apple for e-reader devices as customer’s shopping habits change.

3. What’s the company’s core competency, if any? One of Barnes and Noble’s core competencies is their wide assortment of books both

digital and physical. Also, since they are one of the only remaining retail bookstore chain still viable in this digital market, they are able to be the leaders in ‘brick and mortar’ book sales. They also have a very efficient logistics system along with a reliable software app that is available for many different platforms.

4. What has the company done in the past, and why is it successful or not? In the past Barnes & Noble has really cornered the market of book retailers. They were

successful because of their ability to offer consumers access to just about any piece of literature available. With a Library type feel, minus the dewy decimal system, each section of the store was very user friendly. Along with this easy to follow layout, B&N

was staffed with some of the most knowledgeable personnel. This created a relaxing atmosphere for avid readers and hobbyist alike.

5. What the company should do to deal with the issue, i.e. strategic recommendation? Overall the company should really focus on the development of their products and start

putting more effort into strengthening bonds with partnership groups that are part of their target audience. Certain products like their Nook could have been successful if they didn’t limit themselves by only developing a product for a certain niche of people…avid readers. Creating a product that could multipurpose would have helped make them a more viable competitor to the Kindle Fire by Amazon. The other suggestion is to focus on putting more effort into partnering with groups that are part of your target audience. As college students we know that books are a necessary evil when it comes to school. B&N has already worked its way into the collegiate family (705 college bookstores that serve over 5 million students). By building a better partnership via offering special incentives to those students who use the program, they could increase revenue from those universities. With the book rental game becoming more and more competitive, B&N could leverage their brand strength use it as a means of solidifying their position as the “go to” book retailer for campuses across the US. I am sure we can all attest to the convenience that online book ordering has over traditional book stores. Consumers want the lowest cost and most convenient product, B&N has the ability to offer both of these. They just need to focus on building that awareness among consumers.

http://www.forbes.com/sites/jeremygreenfield/2013/02/06/barnes-nobles-big-problem-and-what- to-do-about-it/ http://online.wsj.com/articles/SB10001424052702303626804579507321532982730 http://www.wikinvest.com/stock/Barnes_%26_Noble_(BKS) http://en.wikipedia.org/wiki/Barnes_%26_Noble http://www.reuters.com/finance/stocks/companyProfile?symbol=BKS

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