Ateneo De Davao University

Jacinto St., Davao City

(3-172) MGT 313 05:55P 07:25P
S.Y 2016 -2017

Case Study: Can this bookstore be saved?

Members:
Ang, Kathleen
Bandija, Jhon
Estoesta, Rogelbert
Lada, Nickzel
Nardo, Aireen
Rubio, Rolcy
BSBMgt. 3C

Submitted to:
Mrs. Lovely Joy Paasa

Date of submission:
July 28, 2016

Summary

Under Porters Competitive Forces Model, B&N no longer has to worry about
traditional competitors like B. Dalton, Borders, and small independent book stores.
However, it must now contend with many new competitors in the e-book
marketplace. Suppliers are basically the same publishers who supply books to all
the booksellers. However, pricing models are different for some publishers selling
to B&Ns competitors. Substitute products for its traditional hardbound books are
prevalent in the marketplace so its good that B&N is working so hard toward
increasing its market share of e-books.
Publishers are doing anything they can to support B&Ns efforts to stay afloat,
because the survival of physical book retailers is important to effectively market
and sell books. Bookstores spur publisher sales with the browsing effect.
Surveys have shown that only one-third of the people visiting a bookstore and walk
out with a book actually arrived with the specific desire to purchase one.
Its going to be a tough uphill climb for B&N to make its new strategy successful.
Its helpful to partner with Microsoft and include an e-reading app in the nev/
Windows 8 operating system. That will increase its exposure to computer users and
make it easier for them to purchase books and products from B&N. However,
Apple and Amazon have made tremendous strides in the e-book marketplace
making it difficult for B&N to compete.

PROBLEM SOLVING PROCESS

I.
Problem identification
Profit margins are decreasing for Barnes and Nobles

II.
Solution design
To increase product differentiation.
To expand the companys eBook sales with select and exclusive products
Focus more on the e-content market with their Nook they should also
develop technologies to get consumers into their stores.
III.

Solution evaluation and choice

First Alternative
Advantage:
Barnes and Noble can benefit if theyll set apart themselves from
the amazon.com in trying to increase profit margins. To keep the
consumers interest they should utilize its current assents. One of it
is the store, the customers or consumers can experience the oneon-one or face to face interactions with the employees working in
the said store. And it is the thing that amazon.com dont have.
Disadvantage:
In Barnes and Nobles, it is hard for them to change its
consumer preferences and to set apart in the marketplace.
They have the Nook, which is similar to kindle that is
introduced by Amazon, and they were trying to compete
with that.

 Alternative II
Advantage:
Since the B&N first expanded their Nook e-reader last October
2009 of October, their profit sales has increased to 20% so, if
theyll expand more their companys e-book sales market there
would be possibilities that their company will increase more of its
sales.
Disadvantage:
It will take a lot of time for them to expand their company sales
market if they are almost losing their market sales.
Alternative III
Advantage:
Barnes and Noble gone through ups and downs. They also must
focus on their e content market with their e reader Nook. With
this, their target subjects will get their attention with their newly
advanced and developed technologies to get their specific
consumers into their shoes.
Disadvantage
If B&N will deeply focus in their e content market, they will
forget the consumers who are into traditional way on buying
books. Even though the e-book is the easier way the face to face
interaction between the consumer and employee would still be
effective.
In case the number of consumers will avail the newly advanced
and developed technologies decrease, less consumer means that
the e content market will be useless and all the expenses will be
wasted.

IV.

Implementation/ Recommendation
Barnes and Noble are well positioned to implement a strategic plan that
will produce sustained growth in their company. Chiefly, the company
must make effort in the market development and product differentiation
to increase market share in the specialty Nook niche. Achieving this
objective will have suited achieve this goals is market development. By
using a combination of product differentiation and acquisition, the B&N
will be able to build a larger brand that encompasses a much larger
geographic region than the Amazon and Apple. The B&N products will
be targeted some specific consumers will a goal of creating brand loyalty
in new regions. Also, the adaptation of operational excellence as a value
discipline will improve supple chain efficiency as the company expands.
This will allow the company to set prices that are competitive with other
firms such as Amazon and Apple, while remaining highly profitable at
the same time. The ultimate result of these recommendations will provide
Barnes and Noble with greater operation flexibility and growth to its
company market share.

V.

Contingency plan

Whether the product diffentiation will be successful or not, if the company highly
differentiate its product from the competitors, it will be more unique and appealing
in the marketplace. If the solution or any kinds of failure in increasing the profit of
B&N is not effective they need to benchmark to their competitors and sell their
products in cheaper price and much more quality. They must have discounts or
sales and gimmicks in order to sell and be known by the customers as a quality
product. When any of products have been corrupt or malfunction the company will
change it for free in our nearest branches, B&N will expand its selling worldwide
to serve the customers better. It is a lot easier to sell our products by using
advertisements in social media in which giving our customer idea where they want
to buy ebooks. The purpose of this plan aims to minimize the impact of a
foreseeable event and to plan for how the business will resume normal operations
after crisis.