Bad Company Strategy: Borders Books
* Borders Group, Inc. was founded in 1971 in Ann Arbor, Michigan. * At one time operated well over 500 stores and had close to 20,000 employees. * Borders Group Inc. was acquired by Kmart in 1992 who then tried to merge it with Waldenbooks. * Traditional brick and mortar bookstore that tried to expand internationally, as well as through e-commerce. The Borders Group, Inc. for many years was seen as a dependable international book and music retail store. Consumers could enjoy browsing through a wide array of books, CDs, and magazines, all while sipping on coffee and interacting with other customers. Bad Strategies:
There are many reasons why Borders failed. As with many companies that fell short, Borders neglected to keep up with the times and adapt. They were to slow to move and did not change their strategy to be in line with the latest trends. Borders got themselves deeply in debt and went overboard trying to become a multi-purpose retailer. * Borders came far too late to the web in terms of establishing their own website with their own products. For many years they outsourced their services to Amazon, which hurt the company in the long-run, as well as took away from its profits and consumer base. * Borders opened far too many retail stores and expanded too quickly. Many Borders stores opened in towns that already had a Barnes and Noble’s, which in turn gave customers an excess of bookstores. The overload of bookstores did not sit well as consumer interest turned towards online shopping. * Similar to coming late to the web, Borders did not move quickly enough to foster the e-book revolution. They did not create their own e-reader such as nook or kindle and only as of 2010 had an online e-book store. * Borders carried excessive debt on its accounting books. The company tried to restructure in an attempt to pay down the debt, but could never quite pull itself out of the pit....
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