Case Analysis: Leadership Online: Barnes & Noble vs. Amazon.Com

3556 Words Mar 1st, 2013 15 Pages
Msc. Management (FT)
Strategic Management (2007)
Assignment
Case Analysis: Leadership Online: Barnes & Noble vs. Amazon.com
Answer all three questions. All questions carry equal marks.

Q1. Based on your own experience of traditional bookselling and your exploration of online bookselling, compare willingness-to-pay for books supplied by these two business models. In the US, the traditional bookselling had a market of about 26 million dollars in the year 1996 and had grown to about 33 million dollars in the year 2001. It is growing at the rate of about 4.8 % per annum. An average American citizen buys about 10 books a year in 1996. Book buying usually increases during the weekends and during the fourth quarter of the year. Usually
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They also have mail order book services and book clubs. Barnes and Noble also set up shop in Canada, but it has major operations in the US. The procurement of books for the malls and superstores of Barnes and Nobles has been centralized. Jeff Bezos had founded Amazon.com in the year 1995 and it reached sales of about 16 million dollars in the year 1996. About 7600 employees were present in the organization in that year. Amazon.com can reach much more people compared to Barnes and Noble, but it can sell only online, unlike Barnes and Noble. Online booking selling seems to have one disadvantage over store book selling. The customers in the stores are able to feel the book and read excerpts of the book. In such a circumstance, they would be more interested in buying the book and would find the book its money’s worth. With time, the internet is beginning to change, and many of the manufacturers are beginning to show case the product and actually permit the customer to sample it using the internet. With the bookshelf model, it does seem that it would be costly to get the investment to setup the place, build shelves and get the logistics. In comparison, an online store does not require much of investment and infrastructure. The customer can access the online bookstore from almost any part of the world and can select the book. The user would need only a computer, an Internet connection, and

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