Borders Group Inc. Case Study

2787 Words Nov 25th, 2011 12 Pages
Borders Group Inc.

Professor: Simon Dekker
Student: Yanhui Zheng
Student ID: 021244231
Date: 02- -2010

Introduction
Borders Group Inc. is one of leading and well-known retailers of books, CD, and other educational items. Its idea is “To create richer, more satisfying lives through knowledge and entertainment.” In order to accomplish its mission, Borders provide additional services to make its customer enjoy spending in the store. Borders’ store is not just a bookstore that people go in, buy books, and leave. More likely, it is a place that people can relax and learn knowledge at the same time. Despite the stores throughout nationwide, Borders also has stores in Australia, Malaysia, New Zealand, Oman, Singapore, and United Arab
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What is worse is that the costs are increasing boomingly. Only 1 year the cost of goods sold goes up by 10%, and operational activities costs also is increasing. Of cause, the profit is keep going down.
Compared with Borders, Amazon is skyrocketing growing. Its sales went up from 3.1 billion in 2001 to 34.2 billion dollars in 2010, especial it grew by approximately 10 billion dollars in 2009. The last three years analysis is showing in the following chart:
Chart 4: 2008-2010 Amazon.com’s performances | 2008 | 2009 | 2010 | Total sales | 19,166,000 | 24,509,000 | 34,204,000 | COGS % | 77.72% | 77.43% | 77.65% | Admin/sales | 17.89% | 17.96% | 22.34% | Net income | 645,000 | 902,000 | 1,152,000 | Amazon did not only make more sales or profit, it also had obviouly lower cost of goods sold and admin/sales ratio. Most important thing is Amazon still growing while Borders already