Barnes & Noble: Managing the E-Book Revolution Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Problem Statement

The problem which Barnes & Noble has been facing is the fact the dynamics of the industry have been changing quite rapidly. For instance, the rival firms such as Amazon, Google, have come up with the electronic book technology which has been the new introduction in the industry. In such a situation, Barnes & Noble has to decide the upon the distribution standards. Moreover, it has also decided upon the fact, whether B&N shall be developing a separate integrated strategy or should it develop a digital business for the company.

EXTERNAL ANALYSIS

Porter’s five forces model

Threat of New Entrants: High

The industry is highly competitive in terms of new entrants. As the case states, most of the rivals have been looking to explore the market by entering into online book store services. Along with this, the number of brick and mortar stores in the country hasalso been increasing quite rapidly which again is a symbol of threat. The low capital investment and the limited inventory requirements the industry is a good opportunity for new entrants.

Threat of Substitutes: High

The threat of substitutes is high for the industry. The reason for this recommendation is entirely based upon the fact that the alternatives to reading are quite large in number with low switching cost. For instance, television, sports, spending time with friends, movies all are alternatives to reading books.

Competitive Rivalry: High

The rivalry among competitors is quite high for the industry. It is high because the number of competitors is quite high. As the case states, the major competitors in the market are Amazon, Google, Apple, Borders, etc. Since the traditional retail stores are becoming obsolete, the online mode of reaching customers has emerged and hence the completion has increased along the way.

Bargaining Power of Buyers: High

The power of buyers in the industry is relatively high. The reason for it being high is entirely based upon the fact that the prices offered by the online stores are quite low as compared to the traditional stores. Moreover, the difference between the products offered by the industry players is also quite similar and alike.

Bargaining Power of Suppliers: Low

The bargaining power of supplier is low in the industry because of the fact that the services provided by the suppliers are entirely based upon the wholesale rates and the suppliers in the industry are offering similar services also.

Competitor analysis

The competitors which are currently operating in the industry and are directly posing threat to Barnes & Noble are Amazon, Google and Apple. The competitors in the industry are competing on prices, distribution network, and network of distribution. In addition, all the competitors have been offering limited prices which make the industry highly competitive where the profit margins have reduced quite significantly.

The capability of different competitors has been diverse and different. For instance, the capability of Amazon has been its online network, whereas Apple has been quite well placed in terms of its distribution network. This indicates that different rivals offer different features and therefore the competition becomes stiff and challenging.

Barnes & Noble Managing the E-book Revolution Case Solution

Key success factors

The KSF’s have been the broader product assortment. Along with this, another KSF has been the high quality customer service that is being offered to the customers. Moreover, the relationship amongst the suppliers and the company have been quite long term and well organized. The presence of different organizations over the internet makes it a key success factor. Along with this, the human resource department has been a KSF too.

Opportunities:

The presence over the internet can be the most attractive opportunity for the company Barnes & Noble

B&N can also offer course text books, magazines and articles.

Enter new markets in the international market

Threats:

The increase in competition is a major threat

Switching cost is also a threat for B&N

INTERNAL ANALYSIS

VRIO

VRIO analysis basically helps a firm to identify its major strength which provides the firm with sustainable competitive advantage in the industry. The rare attribute for B&N has been the fact that it has been the first company that has been offering regular discount offers.

Along with this, B&N has been the largest traditional retailer in the United States. This has been the temporary competitive advantage for the company. At the moment, the company lies under the quadrant of temporary competitive advantage because; the current value resource of the company can be copied in the future by the rival firms. ........................

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