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Barnes and Noble-Strategy Essay

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Updated: May 12th, 2020

Abstract

Strategic Management is a concept that is turning to be a key blue print in the management of many companies today. As it can be seen from realities of globalization, rapid changes in technology, increasing competition, changing market and economic conditions and decline in resources are all contributing to the complexity of modern management and thus, necessitating the need for effective strategy policies. Barnes and Noble is one of the leading companies in the book retail industry.

For some time, the company’s growth has been slowed down by entry of key competitors such as Amazon.com, a scenario that has prompted the company to evaluate and re-design its strategic policy. Therefore, this essay will evaluate Barnes and Noble Company, its market position, its capabilities and competitive advantages and strategies it has placed to increase its competitive opportunities in the book market. Key aspect will be on the analysis of strategic management concept.

The world is in a constant state of change, an aspect that is going to persist for a long time. Nevertheless, this state of constant changes affects and influences strategic management whereby strategic planning is required to make decisions that can be utilized now, and in the process guides the organization’s future directions.

Many companies are developing visions for the future and the visions are stimulated by the company’s concerns for survival (Betz, 2002); and to ensure long-term survival, a company needs to possess and demonstrate two strategic capabilities: the ability to prosper and the ability to change (Steele, 1989 cited in Betz, 2002). Betz (2002) defines strategy as ideas about the long-term future involving company’s objectives and leadership.

Worth (2000) observes that “strategic visioning, communicating vision, recruiting and motivating good people, obtaining feedback and taking action that creates shareholder prosperity constitute essential elements in corporate leadership” (cited in Betz, 2002).

According to Schmidt, there are three key aspects for effective and successful corporate leadership, which he identifies as, “setting a strategic vision that is implementable, recruiting, and leading great human beings and worrying about shareholder value” (cited in Betz, 2002). Further, the question that investors need to ask is whether the company’s leadership has the strategy that can win.

Barnes and Noble Company

Barnes and Noble Company started its full operation under the name in early 1970s, having first been established in 1960s as Student Book Exchange by Leonard Riggio while attending New York University (Barnes and Noble, n.d).

In 1974, Barnes and Noble became the first bookseller company to run its advertisements on the American television (Barnes and Noble, n.d). In 1975, in a move that was characterized to be bold, the company became first to offer discounted books, an aspect that prompted the company to expand on the idea by opening a 40,000-square-foot sale store (Barnes and Noble).

Exploiting on the new acquired opportunities, the company expanded and ventured into New York and Boston markets where it established smaller discount bookstores; and at the same time, it acquired BookMasters and Marboro Books to add on its discount chains (Barnes and Noble, n.d).

In 1987, the company in another bold move that left players in field amazed acquired B. Dalton Bookseller from Dayton Hudson, an acquisition that resulted into Barnes and Noble adding 797 retail bookstores a situation that turned the company into a leading national wide retailer and as the second largest bookseller in America.

Early 1990s saw Barnes and Noble greatly modify its concept of superstore and build reputable modern generation of Barnes and Noble superstores that today account for 96 per cent of all retail sales (Barnes and Noble, n.d).

Before mid-1980s, Barnes and Noble sold its books directly through its famous mail-order catalogue but towards late 1980s, the company started experimenting the idea of selling books online where it created Trintex in conjunction with Sears and IBM (Barnes and Noble, n.d). Expanding on the idea, the company in mid-1990s transacted its books through CompuServe before deciding later to establish a full-fledged book superstore online in 1997 (Barnes and Noble, n.d).

Through its online retailing, the company has graduated as one of the largest stores, giving its customers the opportunity to order books at any time and from any part of the world. Toda, the company’s online retailing has been regarded as the largest inventory bookseller online.

During the 2010 EquiTrend Brand Study for the seventh year, the company was identified as the nation’s top brand in bookselling. At the same time, the report ranked Barnes and Noble as the overall brand in bookstore with regard to, “equity, familiarity, quality, and purchase intend” (Business Wire, 2010, p.1).

In accordance to trust, the company was ranked at the second position for the third year running. Currently, the company constitutes the biggest e-commerce location that contains hundred of thousands of titles giving customers a chance to make purchases and read books online (Business Wire, 2010, p.1).

Barnes and Noble capabilities and competitive advantage

The company is endowed with relatively enough resources on which it has established its competitive advantage. Barnes and Noble Company have an established brick and mortar, which has further been enhanced by the recent online development. As a result of development of an online site, consumers have been provided with diverse sale opportunities while at the same time providing the necessary flexibility among the company’s customers (Modi, Durkin, Kass, and Ulin, 2000).

Further, the company has established a strong inventory, giving the company’s procurement and logistics necessary strengths. As part of leveraging its competitive advantages, the company has strong brand recognition as compared to its competitors (Modi, Durkin, Kass, and Ulin, 2000).

Further, the company has put much emphasis on books published by small and independent publishers an opportunity that has enabled the company to develop and build a strong customer loyalty. Moreover, Barnes and Noble have efficient and competent operations, which have resulted into the company to continue enjoy market dominance.

Barnes and Noble’s strategy

The company, in its established strategy roadmap, is seeking to grow its share of consumer book market while at the same time its increase the size of the market. To achieve this, the company visions to increase the customer base and in a quick move extend its brand while remaining closer to its customers.

Additionally, the company is strategically positioned to design its stores and locate them near consumers where extended hours will be adopted. Further, the company has strategically invested in enhancing and improving the aspects of online browsing and shopping for its consumers, which the company envisions to make the whole experience more pleasurable and easy.

To pursue the strategy, the company is positioning the online bookstore as a location for its wide range of products including books, knowledge, information, education, and entertainment. The effort for the strategy is to see further continuous planning aimed at improving the design, layout, and navigation of the online site.

Lastly, the company has laid strategies of establishing, strengthening, and expanding strategic alliances with specific related third-party websites and content providers in order to make more attraction and increase consumer base to its online stores. Today, this strategy is generating fruits since web portal, content site companies such as America Online (AOL), Microsoft, and Lycos have collaborated with Barnes and Noble, and more consumers are being recruited.

Conclusion

The book retail industry is expanding at a faster rate that calls for productive strategies to be developed by companies in the field. Barnes and Noble Company is one of the companies that have realized that, for future survival and continuity, key strategic development is important.

The company has developed strategies that are aimed at improving the company’s position in terms of competitive advantage. Overall, the company’s strategy has put more emphasis on the company’s re-design, market growth, expansion, innovation, and customer service. These key areas have become critical areas for the survival of the company and other companies in the field.

References

Barnes and Noble Company. Barnes and Noble History. Web.

Betz, F. (2002). . MA, John Wiley and Sons. Web.

Business Wire. (2010). Barnes & Noble Ranked the Nation’s Top Bookseller Brand by the 2010 Equi Trend Brand Study. Web.

Modi, T., Durkin, M. A., Kass, C. and Ulin, M. (2000). . Web.

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