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Barnes and Noble, Inc. is a books retailer operating throughout the US. The brand has diversified its business operations, where it currently sells digital media, among other numerous educational products (Barnes & Noble par. 1). Barnes and Noble pursued a new business idea by launching its own eReader device, known as the Nook, in anticipation of the growing demand for browser devices with the ability to access digital content. However, Barnes and Noble’s expectations never materialized, as the Nook failed to attract sufficient demand levels in the market.
I decided to create a storyline that describes the efforts of Barnes and Noble to partner with other firms in the software industry and showcase its products to the masses.
Jack decides to make high quality mobile browser devices, including smartphones and tablets. He agrees to partner with Barnes and Noble to form a business partnership with SofTech, as a way of revitalizing the performance of the Nook. Jack selects Emily as one of his friends who have been an icon in the music industry to showcase the new Nook. Emily is supposed to instill the notion that the new Nook will provide greater value to the customers. She gets the opportunity to use the gadget as an eReader in the presence of potential shoppers. She is also capable of streaming live TV, playing music, and showing movies, which she does in the streets to attract the masses who know her well. As she draws the attention of the masses, she is able to showcase the refurbished Nook as the latest and most powerful software that supports all the additional functionalities. She goes doing this in major public areas like bus stops and subway stations. Here, train passengers awaiting their departure at a subway station scramble to admire a woman holding her latest Nook eReader, as they keep away their devices. Towards the end, the words appear on the screen in bold: New Look Nooke: Explore Your Digital World.
Barnes and Noble, Inc. ranks among the leading retail booksellers in the US. It also deals with digital media, as well as other numerous educational products (Barnes & Noble par. 1). Despite its great business performance over the years, Barnes and Noble is facing greater financial difficulties that threaten to bring its operations to a halt. The trouble currently being faced by the brand emerged when it decided to launch its own eReader device known as the Nook. Although the company anticipated better performance on this front, poor sales of the Nook over the years strained its financial position to a point where the firm now faces serious business challenges. This essay seeks to explain why the brand is troubled. It eventually offers suggestions on ways of improving the company’s current poor performance.
Barnes and Noble as a Troubled Brand
The main reason behind Barnes and Noble’s current woes is technology. The brand was amongst the first in the book retailing industry to launch an eReader device to enable its customers to access digital content available online. The eReader device, known as the Nook, was launched in 2009 and initially registered good results in sales. At some point, it claimed up to 25 percent share of the entire eReader market (Scanlon par. 2). However, the Nook is currently recording lower sales in the market, which are straining the company’s resources extensively. It is prudent to mention that this project must have consumed significant amounts of the brand’s resources to develop, given the extensive capital needed to initiate a successful technology product or idea in the modern day world (Dhillon, Coss, and Hackney 163). Barnes and Noble had greater anticipation that higher market demand for its Nook device would enable the company to recoup its initial capital expended on the project and result in higher profitability. The poor sales of the Nook, however, caused the company to suffer greater financial constraints, as it was not capable to recoup its extensive capital that was employed in initiating the project.
Secondly, Barnes and Noble is also troubled due to the influence of technological advancement, which has resulted in a decrease in the purchase of physical books and other similar publications (Scanlon par. 4). More people are increasingly acquiring devices that have browsing capabilities, such as eReaders, smartphones, and laptops. The devices enable book readers to access such materials in digital form. Although Barnes and Noble had anticipated this kind of transformation long before, leading to its initiation of the Nook, its eReader device failed to attract the right market demand that would eventually ensure higher revenues and profitability for the company. It means that Barnes and Noble’s traditional retail practice of selling physical books has experienced a significant drop in revenues because more readers are opting to access their favorite publications in digital form. With the cost of running physical books’ business remaining high because of the expenses involved in maintaining book stores and paying the numerous attendants in these stores, the brand has struggled to raise adequate revenues and profits and sustain its operations (Dhillon, Coss, and Hackney 163).
Thirdly, Barnes and Noble is struggling because of poor business strategies, especially business strategies that it has employed in its Nook eReader device. It is prudent to point out that the device has not managed to get a strong hold on the eReader market, despite the Nook being the pioneer of the eReader idea early in 2009. Instead, other competitors in the book retailing industry, such as Amazon, have launched their own versions of eReaders, like the Kindle, whose sales have overtaken those of the Nook by far. At a time when numerous devices are presently available in the market for enabling customers to access digital content online, Barnes and Noble has lacked a more formidable strategy to enable it to compete effectively. In terms of marketing strategies, as Lutz (par. 3-4) explains, both Apple Inc. and Amazon have advertised their respective eReaders extensively as devices that can be used for reading books and streaming movies and television shows. Barnes and Noble’s main marketing strategy only focuses on advertising the Nook as a book reader, thus limiting its overall market appeal. This means that most consumers of eReader devices look at iPads and the Kindle as devices with multiple uses compared to the Nook, which only appears as a single-use device. Additionally, the Kindle captured a greater market appeal for successfully positioning itself as a device that was comparatively cheaper to the iPad. Unfortunately, this was not the case with the Nook, which did not adopt any unique foundation to present itself to the market (Lutz par. 5).
Fourthly, Barnes and Noble opted to have its Nook apps developed and hosted on the Windows platform, as opposed to other popular platforms like Android and iOS. Like Loeb (par. 3) rightly points out, Microsoft mobile browsing devices running on the Windows Mobile operating system have been performing poorly in the market compared to Android and iOS devices. It means that Barnes and Noble further limits the chances of online book readers accessing its apps through the most popular platforms in the market.
Moreover, the fact that Barnes and Noble is not primarily a software company, but a book company, also contributes towards complicating the brand’s performance. In essence, Barnes and Noble is not in any better position to innovate its Nook idea to keep pace with the fast changing technological advancements experienced in this industry. This has put the company at a greater disadvantage compared to its other competitors, such as Apple and Samsung, which are chiefly technological firms investing heavily in software development. While Apple and Samsung are able to envisage the market trends accurately and develop devices that will suit the demand effectively, Barnes and Noble lacks such a capacity to focus more on software development and initiate highly competitive eReader devices (Loeb par. 6).
Suggestions on How to Improve the Brand
Barnes and Noble can address the current challenges facing the brand by opting to separate the Nook division from the other retail division. This will be a noble idea because it will enable the management of the firm to focus only on an area that they have greater understanding and control over, as compared to having the two divisions operating jointly. It will eliminate the financial strain that the company is currently facing, which is mainly caused by the poor sales of the Nook. Having the Nook running as an independent division of the physical book retailing division would offer a chance for its management to focus more efforts on ways of achieving a turnaround in its overall operations (Leob par. 5). This may include approaching other firms to offer financial or technical assistance to ensure the division regains a competitive position. It may also offer an opportunity for other interested firms with greater capability to purchase the division fully from Barnes and Noble.
Alternatively, Barnes and Noble can opt to have the Nook division run fully by a third party software firm to enhance its performance. Such an arrangement, as Leob (par. 6) highlights, would ensure that the software firm invests its own money into the project and undertakes operations like extensive technology research and new product development to attract significant market demand. Within such an arrangement, the third party software company should assume total control of the division and the two firms should agree on an appropriate profit sharing arrangement once the project is revitalized. It is still noble for Barnes and Noble to have an eReader device in the market that is customized specifically for its online digital content, the way the Kindle has been sustained by Amazon. This will help to reassure its customers that they stand to benefit optimally by acquiring the Nook device. Additionally, entering into a partnership deal with an established software company will ensure that the Nook competes at par with other well established eReaders, such as the Kindle and Apple’s iPad.
A third alternative that could equally ensure improved performance of Barnes and Noble as a whole is to avail the Nook apps on Android and iOS platforms, rather than the Windows operating system. As already discussed, both Android and Apple’s iOS software are the most common in the US, as well as global markets. More Android and iOS devices are acquired annually, as compared to the number of Windows devices. Availing the Nook app primarily via the Android and iOS software will increase its popularity, making it available in numerous gadgets at any given instance (Richardson and Mahmood 170). It would also mean that customers are not required to acquire a Nook device necessarily, but the app can be downloaded and hosted on Android and iOS compatible devices.
Barnes and Noble’s challenges emanate from a poor sales record of its eReader device, the Nook. Despite being the pioneer eReader device in the market, the Nook has been plagued by poor strategies adopted by Barnes and Noble, which have affected its sales performance negatively. The extensive capital expended in the development of the Nook has not been recovered fully by the parent company, Barnes and Noble, making the paper book retail division of the firm to suffer immense consequences. The marketing strategies employed for the Nook did not focus on positioning the device as one with multiple uses, other than reading online digital content. Additionally, Barnes and Noble is not a technology firm that can compete effectively with established software firms like Apple Inc. and Samsung, which have positioned their iPad devices as alternative eReaders. These factors have contributed towards the poor outcome witnessed at Barnes and Noble. Nonetheless, the firm can opt to separate its operations into two divisions to enable the Nook division run on its own. Alternatively, the brand can work in a partnership arrangement with an established third party software firm to allow it to manage its Nook division on its behalf.
Barnes & Noble. Is This the End for Barnes & Noble’s Nook? 2012. Web.
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Hillon, Gurpreet, David Coss, and Ray Hackney. “Interpreting the Role of Disruptive Technologies in e-Businesses.” Logistics Information Management 14.1 (2001): 163-70. Print.
Lutz, Ashley. 4 Reasons Barnes & Noble’s Nook Crashed and Burned. 2014. Web.
Richardson, John V. Jr, and Khalid Mahmood. “EBook Readers: User Satisfaction and Usability Issues.” Library Hi Tech 30.1 (2012): 170-85. Print.
Scanlon, Jess. Is This the End for Barnes & Noble’s Nook? 2014. Web.