Sophia Sharmat
12/02/15
Mr.Giordano
Economics H
Barnes and Noble Incorporated: Is the Corporation Worth Investing in? Barnes and Noble Incorporated is currently the largest book and media-content retailer in the United States. Founded in 1873 in Wheaton, Illinois by Charles Montgomery Barnes, who had started it as a family business, it has since evolved into the biggest book marketplace of our time. Although Barnes and Noble has had a long-run of success, it is currently near the edge of bankruptcy. It’s lack of sales and the shift of interest in reading physical books has forced most book retailers to “close-up shop”, with Barnes and Noble being next on the list. Therefore, Barnes and Noble is not worth investing in, because of its loss
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Charles Montgomery Barnes, a Wheaton College graduate, decided to start a second-hand book store, selling discounted textbooks to Wheaton College students. In 1873, that same year, he decided to expand his business by moving to Chicago. He established his own firm by 1904 by the name of the C.M Barnes company. The firm was maintained as a family business until 1917, when Charles’ son, William, made partner with Gilbert Clifford Noble and his company, Noble and Noble. Gilbert Noble had entered the book business after graduating from Harvard University, and entering a partnership with the owner of Arthur Hinds and Company. Gilbert Noble eventually bought ownership of the company, changed the name to Hinds and Noble (then to Noble and Noble), and of course entered the partnership with William Barnes. The bookstore’s name was changed to Barnes and Noble, which was maintained, even into the present, despite Noble’s share being sold and his death in …show more content…
Their inception in the book-selling world began with textbooks and other materials at discounted prices for the struggling student. The company established itself as college bookstores, which it still does today, on campuses like Harvard and New York University. In 1971, the business was purchased by Leonard Riggio, a bookseller himself, who decided to employ the idea of discounted books, but expand their demographic past college students. Leonard Riggio aimed to open the business more to the everyday shopper, and as such began offering best-selling fiction and nonfiction books to the general public. Throughout the 1970’s, Barnes and Nobles continued to open over a dozen larger retail discount stores, starting their own publishing house, and even starting their own catalogue, thus expanding their business to all over America. In 1974, Barnes and Noble was identified as the largest bookseller in the world. Leonard Riggio stated “As booksellers we are determined to be the very best in our business, regardless of the size, pedigree or inclinations of our competitors. We will continue to bring our industry nuances of style and approaches to bookselling which are consistent with our evolving aspirations.” In the 1980’s, Barnes and Noble began selling books online, and began their own book review website. In 2009, Barnes and Nobles staked their claim in the digital era by announcing the
In contrast to Borders Group, Barnes & Noble which is a leading bookstore in the US recorded an 11% increase in their share value in the past year with the introduction of their e-book reader “Nook”. It is clear that Barnes & Noble were not “Myopic” in their approach and were able to retain and even grow their customers as well as profits by embracing a new product.
The bookstore chain has been decreasing in profit in the US over the past 20 years. Most of the books retailers are shutting down their operations and only a few are still operating in the country. Barnes and Noble has become the largest bookseller in the book retailers industry. The firm has integrated its business philosophy into web presence though eBook marketplace. This business strategy assisted the firm to be able to reach a large scale customers and remain as a strongest competitor in the book retailing market.
Barnes & Noble does business -- big business -- by the book. As the #1 bookseller in the US, it operates about 650 superstores throughout 49 states and the District of Columbia under the banners Barnes & Noble, Bookstop, and Bookstar, as well as about 200 mall stores using the names B. Dalton, Doubleday, and Scribner's. The company's GameStop subsidiary is the #1 US video game retailer with about 1,500 stores under the names Babbage's Etc., GameStop, and FuncoLand. Barnes & Noble owned about 75% of online book seller barnesandnoble.com after purchasing Bertelsmann's interest in 2003; Barnes & Noble then purchased all remaining shares and took the company private in May 2004.
While value is a competitive advantage for Barnes and Noble’s retention of market share, their prices are not low enough to impose a low cost strategy.
Bezos’ entrepreneurial vision perceived new opportunities in the rapid growing usage of the Internet. He believed a 2300 percent increase in web trafficking every year could develop into a new sphere of commerce. After reviewing top mail order business, Bezos discovered that no mail order catalogue existed for selling books. Big name libraries like Barnes and Nobel considered that a catalogue including all the feature titles would need thousand of pages therefore making it expensive to mail. Bezos saw an Internet database as a solution to this issue and decided to serve this unattended market by launching
We chose go to Barnes and Nobles, because we are fascinated by their ability as a company to target multiple age groups and sustain being successful. Their target market are people that love to learn and enjoy reading. They appeal to all age groups not just one market segment and are able to do so as a result of their variety of different sections. They stack the shelves, as you can see in the pictures below, abundantly full with their products, however when shopping we noticed they are almost too cluttered with too many things on them to make a choice simple.
1-In order for Barnes and Nobles to use the Value Chain and Competitive Force Models they needed to be ingenious with their tactics. First, publishers are on B&N side and they are doing everything to make sure that B&N stay at float because they are basically their “bread and butter”. So B&N is securing supplier intimacy with the publishing companies which will lead to strengthening its loyalty relationship with its customer in the store and digitally. Second they are securing their niche in the market, they are doing this by having the stores advertise and communicate to their customer that a there is a specific book that “is a big deal” and B&N is offering an extensive inventory of physical books and it enhance its core competency. Microsoft announced in 2012 that they would be investing $300 million in B&N Nook tablet, e-reader business and its college division. This will enable them to included Windows 8 operating system in Nooks application; this is a space where it will have a product differentiate.
When Leonard Riggio opened Barnes & Nobles he wanted it to be more of a social gathering verses just a bookstore. It was a BIG HIT, one of a kind. 1995 Amazon.com emerged. In 1997 Mr. Riggio launched the barnesandnoble.com in order to keep up with the customers wants. This is a continual battle Barnes & Nobles is fighting, constantly changing their company to fit the world around it.
Indigo’s objective to enrich Canadian lives through books has taken a turn due to the growing influence of the digital era. The company is reforming their corporate strategy to adapt to the new realities of the market place. Indigo addresses their new ambition to “create a cultural department store;” their strategy is evolving to meet the emerging needs of the customers. The company strives to increase physical book sales by adjusting their merchandise mix, in order to maximize profits. As a part of their strategy reformation, Indigo is shifting their primary focus away from the core offering of books and is instead emphasizing on the customer experience within the store. Indigo now offers a wide variety of products that compliment the readers
Barnes & Noble's new strategic approach should be successful due to its early entry into the e-book market. Their strategy is unique in the fact that compared to competitors they have proven themselves by current success in this market, but are now feeling the effects of price inflation. By assessing Barnes & Noble's disposition from a contentious model, one can obviously see that no pressure would arise from the traditional competitors. However, it does not ensure the future of their book
Barnes & Noble is now the leading bookstore in the United States with over 1,200 retail bookstores and over 35,000 employees. Both B&N and Borders sold a wide variety of products including books, music, DVDs, CDs, magazines, toys and etc. However, B&N marketed themselves to a broader audience by selling college text books and sold their products at affordable prices which attracted more customers. B&N also gained competitive advantage over Borders for partnering with Starbucks to deliver in-house cafés.
Barnes & Noble are taking different tacks with regard to agreements with authors agents, and publishers. Amazon is pulling content off the market and padlocking it to their Kindle. In response, Barnes & Noble is refusing to stock Amazon published titles in its brick-and-mortar stores. Barnes & Nobles' investment in the well-received, well-reviewed Nook appears to have been a solid business decision, the ripples of which will continue to be felt for some time. In fact, the Nook is the proverbial finger in the dike as the waters of Amazon continue to threaten the very infrastructure of the publishing business by eroding the relationship between publishers and bricks-and-mortar stores.
However, Amazon compete with them very well. Also, due to wide variety of products, their competitors ranges from retailers, merchandise retailers, online internet retailers,etc. In the late 1990's it provide competition to the bookselling industry and forced Barnes & Noble to launch their online website. Barnes and Noble offers books, DVDs, and CDs, which directly competes with Amazon.com's media segment. Amazon.com competes against all competitors on selection, convenience, and customer experience as well as price. Barnes & Noble had not been successful in online business and they decided to partner with Amazon.com
The Book Depository was founded by an Amazon employee and was later acquired by Amazon. What this mean for their customers was a wider selection of titles to better the customers experience.
Barnes & Noble, Inc. operates as a content, commerce, and technology company in the United States. It provides access to books, magazines, newspapers, and other content through its multi-channel distribution platform. The company sells its products directly to customers through its bookstores and on barnesandnoble.com. Barnes & Noble conducts its online business through Barnes & Noble.com, one of the Web’s largest e-commerce sites, which also features more than 3 million titles in its eBookstore. Through Barnes & Noble’s NOOK eReading product offering, customers can buy and read eBooks on the widest range of platforms, including NOOK eBook