Barnes and Noble Case Study

Topics: Bookselling, E-book, Bookstores Pages: 9 (3518 words) Published: December 4, 2013
Barnes and Noble (B&N) bookstore was started as a student book-exchange store. It later evolved into book retail superstores, and also incorporated online retailing, college bookstores and an ebook store. With more than 600 stores today, B&N is the largest bookstore in the nation. As large as they are, they have faced a lot of challenges as well. B&N started as a very innovative business. In fact, they were the first bookstore to air television ads. They were very memorable and still remain in the heads of truly loyal customers even 40 years later. They were also the first bookstore to sell best-selling books at a huge discount in order to sell more and get their name out there. They expanded throughout the country and it was almost as though they became an instant favorite overnight. They made their stores friendly with cafes and comfortable seats to sit in, so one could enjoy a book without the hassle of everyday life to get in the way. They tended towards the slower lifestyle and wanted their customers to be able to have a place they could escape to with their story and enjoy.

As can be seen, B&N was incredibly versatile and able to change with customer demands. They were a superstore giant and received great respect, even from those working against them. Decades ago, B&N’s main competitors were Borders, Waldenbooks, local bookstores and libraries. Borders, their biggest competitor, went out of business in 2011 due to their inability to maintain their brick and mortar stores based on their declining sales. That left Barnes and Nobles in the lead, and their other competitors have also had to downsize or were wiped out of the competition.

In an attempt to investigate B&N further and provide more background information, a SWOT analysis was performed.

One of the main strengths of Barnes & Noble is the wide variety of selection of books and book-related products they offer. For seven consecutive years, they were awarded the title of “Pinnacle of all bookseller brands.” They also foresaw the rise of mobile devices and concentrated on technological changes. They opened an ebook store to sell online items such as electronic books, newspapers and magazines. Their website and applications were made available not only on desktops and laptops, but also on iPads, iPhones and several other digital platforms. Investing early in the digital market initially gave them a competitive edge . Also, as a result of being able to hold a dominant market position, the company can negotiate lower prices and thus provide customers with savings.

One of their biggest weaknesses is having to spend so much money on legal proceedings that affect profitability. Lawsuits such as reduction in salaries and shareholders’ complaints against board of directors have massively incurred expenses on the company. Also, when compared to their competitors Amazon and Walmart, B&N has a much higher fixed cost, which leaves them prone to price wars, dropping revenues and economic declines. Furthermore, B&N depends on limited inventory suppliers. This puts them in a risky situation since they do not have a long standing agreement made with any of their suppliers. There is no guarantee that B&N will not face a blackout in the delivery of merchandise by their suppliers.

The hold B&N has on the college market, with revenues increasing year by year already, has a big potential for growth since the college textbook market is stable. Many individual bookstores are operating at a loss and that provides opportunities for B&N to acquire them. B&N’s image also can be put into one of those “Go-Green” groups since one of the publishers they purchased in 2003, Sterling, publishes eco-friendly planners, articles and journals. B&N is also one of the top players in magazine and newspaper retail. With the customer trust they have gained, and the dominant market presence they have acquired, B&N has much potential to...
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