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Better World Books Case Study

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Updated: Sep 25th, 2019

Introduction

Online business operations require a lot of strategizing and planning before any implementation is done. Business objectives based on workable principles are necessary for the success of any new business venture. However, all implementations should be done based on right business models and procedures such as customer value, connected activities and capabilities amongst other models.

The strength of an online business is normally based upon its ability to stage unique capabilities in its brand image. The image is very vital in the process of promoting and selling the company’s products. This is since according to consumers, the value of a company is always attached to its brand image (Norton et al 2010, 1-12).

Company introduction

Better World Books (BWB) is a self-sustaining company characterized by economic, social, and environmental value. The company’s core products are used books stocked in warehouse having a capacity of three million books. The company engages in the business of collection, transportation of books and ultimately turning them into money.

BWB has the mission of salvaging thousands of books which might have been otherwise sent to landfills on an annual basis. BWB aims at picking donations of used books from college students and converting into financial resources which could be utilized to engineer funding of various projects, such as non-profit literacy focused organizations.

The company’s main target is to promote literacy within the most adverse countries by shifting resources from the most literate part of the world (Norton et al 2010, 1-3). BWB boast of being a triple bottom line venture and at the same time added value to the community by creating job opportunities. Their main mission of recycling books contributed to environmental conservation since their mission helped in clearing environmental hazards in the name of landfills.

The company’s contributions through social ventures added some significance to their image and reputation since such missions provided necessary assistance to the needy institutions. Their first venture was a success and involved running a book drive for the benefit of Robinson Community Learning Center’s after school reading program, the venture realized great revenue from collection and selling of books and ultimately 50% of the returns were donated to the center (Norton et al 2010, 1-3).

Better World Books was built on four major components of business model i.e. building relationships with non-profit partners sponsoring book collection drives, coordinating book collection drives in college campuses, utilization of online channels to sell books and sharing of the profits with non-profit partners. BWB was established on the basis of being a for-profit company with aim of building strong social networks with communities and employees. The market-based and for-profit structure promoted self-reliance (Norton et al 2010, 1-12).

The management team contributed much assistance through innovative ideas which enabled the company to stabilize financially. Such decisions included the kind of books to sell as well as their appropriate pricing. The discussions also centered on the necessary compensations to be granted to other non-profit partners for their tireless contributions towards BWB’s goal and the strategies necessary for handling inflow and outflow of the used books.

The overall manager being a creative and innovative young man started at an early stage by creating business websites. Together with the help of close friends they were inspired to give back to the community in a socially positive way. And because they were young they needed much mentorship which they got from the CEO of Fledging enterprise (Norton et al 2010, 2-3).

Description of the situation

The situation in this case is about establishing a bookstore dealing with old books, the idea became an initiative of two young men who in their early stages in school got interested in building websites, but ultimately desired to indulge in a social venture which would benefit their various communities. This brought about putting together appropriate business models which ultimately resulted into creation of Better World Book store (Norton et al 2010, 1-3).

The business required start-up capital for the purposes of building the required business resource base. However, at the preliminary stages most of the banks withdrew their loan sponsorship from the company citing reasons concerning their social ventures which according to financial institutions, were never working out.

At some point, this interfered with the company’s capital base which was required for the building of considerable assets (Norton et al 2010, 1-3). Ultimately BWB formed good partnership with Good Capital which contributed much to their capital investment since the company also dealt with social ventures.

Other difficulties experienced by BWB originated from the fact that the company was so much inclined to backroom operations, hence affecting the building of distinctive brand. This is since most of their sales were made through other online booksellers making the company’s brand invisible (Norton et al 2010, 1-5). Such a process made it difficult for the company to win loyalty of their customers, since differentiating a brand in such like a scenario seem impossible.

The other challenge was on pricing where the online booksellers ranked used books by their price points. The pricing structure on the website posed a considerable challenge since the company dealt mostly with used books hence the cost structure seemed different to that of Amazon. The question was still on whether to price their direct sales to consumers differently from big on-line companies such as Amazon (Norton et al 2010, 1-5).

The company also faced problems on pricing structure since they dealt mostly with used books hence found it difficult to price the books the same way as new books. The issue on pricing became more complicated since they were not sure on whether to use the same pricing utilized by other direct selling websites such as Amazon.

On the other hand the issue on attracting the right kind of customers presented another challenge, since price sensitivity contributed much towards consumer attitude on the products. Marketing president found out that the use of discounted pricing promotions was very challenging yet presented one of the ways BWB could use to capture considerable market segment.

College bookstores’ aggressiveness in e-commerce continued to present great threat to BWB on-line sales; this is since the company depended mostly on college students’ book donations which comprised of lower quality books. Such kind of books attracted lower sales hence proved somehow difficult to monetize. The other challenge was posed by conscious consumerism from other competitors who resorted to social and environmental missions to build their brands.

Research revealed that nine out of ten Americans were known to be conscious consumers who were willing to buy from companies based on their role in environmental and social activities. American consumers are known to be much concerned about their values and hence buy more from companies with good objectives towards every aspect of life (Norton et al 2010, 5).

Amazon as one of the top competitors in the market recorded high volume sales with streamlined processes. They charged lower prices on books making their logistics superior to Better World Books. Such advantages on book prices and wide scale, made Amazon attractive to independent bookstores which preferred using the company to source their books.

The company used superior innovative features in their website giving assisting recommendations to customers, making direct searches easier for customers. This presented a big challenge to BWB which was struggling to build a brand name, since majority seemed to consider and recommend the most trusted brands, in this case Amazon (Norton et al 2010, 6).

The process of building the brand became a major challenge which needed attention of the marketing vice president. The company seemed not attractive towards the right kind of customers and at the same time consumer sensitivity on prices seemed not to work well with the books being sold at premium prices compared to other book sellers. Over-pricing would only help them in eliminating a considerable market segment.

This brought about an urgent need of increasing the company’s relevance with the growth of e-commerce (Norton et al 2010, 9). However, the increase in the number of un-saleable books made it difficult to increase the market input of books. The idea was to eliminate such kind of books through brick-and-mortar stores and this idea proved to be capital intensive. In addition the social mission made the company incur a lot of expenses than its competitors (Norton et al 2010, 7-9).

Solutions and recommendations based on the analysis

The idea BWB employed on recycling books and old furniture assisted in saving on costs hence maximizing on profits, the company at the same time recovered used shelves from other libraries which further reduced the expenses. The issue of recycling old books worked well in building the company’s business model on resource capabilities. Such innovative actions from young entrepreneurs assisted in raising much needed funds for the non-profit literacy efforts all over the world (Norton et al 2010, 1-2).

At the same time BWB solutions to such problems as building distinctive brand was the creation of personal branded online retail website. The internet business model adds some value to digital products and services since there is capability of handling financial transactions and information. This would enable direct selling of books to consumers helping in building identity within the growing book industry.

Direct selling would also help in reducing costs by eliminating the commission paid to other online book selling partners (Norton et al 2010, 7). Achieving a stable brand required that BWB utilize the use of search advertising on search engines like Google. BWB also encouraged other non-profit partners to drive traffic to their newly launched website from their personal websites. The need for wide press coverage is also very vital for building the brand image and also helping in attracting more visitors to the site.

Book donations from students were flattening and were characterized by low quality in terms of market standards due to their old nature. The installation of the custom software made the work of pricing and efficient scanning easier. The software also enabled efficiency in tracking of the unsalable books available for donations and recycling thus was further improved by the development of a proprietary inventory management system which gave the company a lot of competitive advantage.

In order to deal with the problem on making sales through other online companies, BWB created their own website. This was their own branded online website used to make direct sales of books to customers. This strategy assisted in curving out BWB’s identity within the expansive book industry. The strategy also helped in cutting on costs since the commission charged by the virtue of using other sites was eliminated by direct sales (Norton et al 2010, 7).

Still on building the brand, the company went a head to focus on search advertising through the use of internet search engines. They resorted to encouraging their fellow non-profit partners to consider beefing up BWB website by driving traffic towards the site through marketing communications. In addition the expansive media coverage the company received assisted in spreading and building the brand image within the market.

BWB decided to replicate everything consumers desired about Amazon. Also inclusive was the strategy to offer consumers free shipping deals since majority preferred companies with such offers. In order to promote environmental friendliness which was a boost to the brand, the company adopted the use of carbon-neutral shopping card which encouraged eco-shipping.

Such strategies which promoted programs such as; efficient delivery, product availability, affordable pricing as well as social mission, made a significant impact on the company’s progress within the global market (Norton et al 2010, 1-12).

Improvement on their relevance within the marketplace required the company to strategize on how to supply quality relevant books to consumers. BWB resorted to wide mobilization of people ready to donate books on a regular basis.

The company resorted to utilizing partners with national retail chains where collection bins were provided at such points with the aim of making collections and at the same time selling the company’s brand. There was the use of online buyback program which proved of great asset to online sellers, whereby they offered to pay a little higher than other individual proprietors.

Strategies applied on the channel of sales and distribution impacted the level of the company’s profitability. The books were virtually priced within the range of less than one dollar to over $ 30000 for rare books of antiquarian origin granting them competitive advantage within the market (Norton et al 2010, 2). In order to improve on collections and sales the company decided to engage fully their non-profit partners by allowing them to act silently through lending of their brand names.

The creation of BWB consolidation centers enabled easier delivery of book donations from nearest schools, hence reducing acquisition and transport costs. Implementation of pre-screening device enabled easy sorting of unsalable books hence making the strategy on pricing more accommodating (Norton et al 2010, 1-12).

The use of market segmentation would enable BWB serve small business segments to the satisfaction of consumers. Operation of numerous book stores within the United States and getting involved in social missions and environmentally friendly programs acted as a boost in attracting more investors.

BWB could find it easier performing multiple works through their own website, hence able to regulate their own prices and at the same time easily tailor their services to consumer needs at affordable rates. The company launched the use of management soft-wares which assisted in providing online inventory data and at the same time connecting BWB with other online libraries and colleges, hence making it easier for selling and collections from interested parties including students (Norton et al 2010, 1-12).

The need to involve silent brands in the marketing processes proved effective since low costs were incurred. This made it difficult for the consumers to recognize brands of other organizations involved hence making it easier for customers to locate resources they required at one stops under one major brand.

Operating online services involves high costs which require further financial strategies. The analysis reveals that increased level of sales could only be realized after winning partnership with top online stores which at some point helps in shifting operating costs. The process of delivery should be accompanied by customer service telephone follow up on a twenty four hour basis (Norton et al 2010, 1-12).

Conclusion

The whole issue requires critical analysis of other competitors’ intentions and strategies which would assist in granting useful counteractive approach. Good management team is also a necessity in enhancing the provision of competitive brand image as well as articulating all the elements of marketing mix. The processes through which products are priced and ways of marketing always require review for growth and realization of profits.

Lessons learnt and why

For an online company to cope with the ever changing market demands there should be readiness to invest on ways of improving the quality of their services. Companies should also consider stepping up their technological abilities which are necessary for modifying their supplies in terms of quality and quantity. Conservative ways of operating businesses could at times turn detrimental to the success of a company.

This is because there is possibility of such measures interfering with investment and at the same time hinder favorable competition within the market. It is usually not easy for companies to obtain quick returns from freshly introduced products within the marketplace since proper strategies has to be put in place and at the same time takes quite some time to deliver. Quest for quick returns on investment at some point slows down productivity since there is possibility of incurring unnecessary expenses leading to losses.

Reference List

Norton, Michael, Fiona, Wilson, Jill, Avery & Steen burgh, Thomas. “Better World Books”. Harvard Business School, (2010): 1-12

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