Case Study: Can this Bookstore Be Saved?
- Use the value chain and competitive forces models to evaluate the impact of the Internet on book publishers and book retail stores such as B&N.
Due to the emergence of e-business, the customers have found a useful tool to compare and choose the product that best suits their requirements. This has increase the bargaining power of the customers (Laudon and Laudon, 2013) and online businesses have been forced to adopt to advanced competitive advantages strategies to remain in the online business. In the case study, we can observe that B&N are facing the same pressure due to the effects on the internet and e-books business on B&N and book publishers.
Looking at the situation of B&N from a Porter’s Competitive Model (Laudon and Laudon, 2013), we can see that they need not to worry from their traditional competitors. The aggressive strategies of B&N, the independent bookstores were already on the back foot. Due to their failed business strategies, Borders have already been eliminated as a threat. The main competitors that have emerged as tough contenders are the e-book ecommerce websites like Amazon and Apple store. B&N already has its suppliers in place for its paper books, but to compete in the present e-book market, the pricing strategies definitely need to be re-visited. It is obvious that e-books have emerged as the substitute products to traditional paper books. For B&N, it has been observed that the number of e-books sales has increased over the past few years while the sales of paper books has decreased clearly showing the future book market trends. I believe that B&N and publishers need to address this changing trend in book reading. Form the case study we can conclude that they have identified this trend and are taking steps to remain a major stakeholder in the book business.
- How are B&N and the book publishers changing their business models to deal with the Internet and e-book technology?
Publishers are aware of the fact that they need to adopt to the e-book phenomenon as soon as possible to remain in the book publishing market. Their ultimate survival rest in this adaptation process. That is why they are helping B&N in any way possible to increase their e-book customer base. In the case study it has been identified that research has indicated that only one third of the people who buy a book from a bookstore go inside the bookstore with an intension of making a book purchase. It signifies the “still” importance of the physical book stores. B&N uses its physical books stores to market the books from its publishers and make them visible. So when people come to their bookstore, they have an image of the displayed book and might want to buy an e-book of the same title.
The introduction of B&N’s Nook tablet and e-reader has also brought in positive results. Microsoft has also agreed to invest $300 million in the Nook project. They will allow for the Nook application to be hosted on their Windows 8 operating system with a hope that it would increase the sales of e-books by B&N. Overall, B&N has been successful in implementing business model changes to not only remain in the book market but to be the main contender.
- Will B&N’s new strategy be successful? Explain your answer.
The new steps taken by B&N to provide their readers not only e-boos but also an e-reader and its application is a good step forward. Partnering with Microsoft to include their application on Windows 8 had the potential to bring millions of new customers in as Windows is already a major part of the personal computers. This will definitely provide a new window to B&N to present their books and other products to their existing and potentially new customers. Having said that, I believe that the competition is not going to be easy in the presence of e-book giants like Amazon and Apple, who already hold a major share in the e-book market and have monopoly over e-book prices. They are the main threats in the e-book market. The success of B&N as an e-book provider depends on their strategies to counter the business strategies of Apple and Amazon. Apple offer electronic books on their iPad and iPhone while Amazon has a Device called Kindle for it. B&N would need to develop its Nook e-reader to be as good as the competitor e-reading devices.
- Is there anything else B&N and the book publishers should be doing to stimulate more business?
I believe that the stimulation of business is dependent on understanding the needs and requirements of the customers. Therefore, B&N and the book publishers need to have competitive prices. The customers can compare prices for any online products within seconds and they will definitely buy the cheaper one with the same specifications. Customers experience means a lot to the success of a business. To improve customer’s experience, B&N need to make the online purchasing process simple and user interactive with attractive graphics but less browsing delays. There need to be many online purchasing facilities like Paypal, Credit Cards and other e-payment processing facilities. B&N would need to improve their e-readers and the application they operate on more user interactive to their customers. People who read books with e-readers might have unique expectations from it. To find out their expectations, customer surveys can be conducted and product prototyping can be done for a better understanding and to improve their future e-reading devices and applications.