Barnes & Noble and Amazon.com had been in constant fight between each other since the explosion of online purchasing. Before the mid 1990’s online purchasing introduction, Barnes & Noble had big dominance in bookselling, as it was the largest bookstore in the world. With the entrance to the book market by Amazon.com, Barnes & Noble found a big competitor, as it represented a new and innovative way of purchasing a book. Making a financial analysis on both companies, we could notice certain differences that mark advantages for both sides. The financial study was done in a span of 4 years of operation for Barnes & Noble (1992-1996) and 6 years of operation for Amazon.com (1995-2001). Given numbers can be seen in Exhibit 1 and 2 for both companies. Now, with both financial reports, we can create many conclusions about both enterprises. First of all, we will talk about the increase in revenues that both experienced throughout their years. Barnes & Noble
Now, taking into consideration Barnes & Noble’s chart, we can see that there is a constant growth in revenues from year to year. The average growth from year to year was of 22.52% in the four year analysis. This is an important factor as we can notice that the company’s sales were always increasing and that the growth rate would not fluctuate throughout the years.
Regarding Amazon.com’s chart, we can see that there is a huge exponential growth. On the first years of operations, Amazon suffered of a big growth in sales, having almost 3000% more sales from 1995 to 1996. Now it is important to notice how the rate lowered throughout the years to reach a 31.50% from 2000 to 2001. We can see a huge growth in the first years because Amazon.com was something new to people as online bookselling wasn’t that famous. As people settled to the idea and competitors like Barnes & Noble adjusted to this change, sales growth went down to a normal growth rate, which in average was still...
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