- 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.
Bargaining Power of Buyers
The bargaining power of buyers is high. The increasing use of the internet has provided the buyers with many alternatives for accessing and buying books. The customers are able to purchase books online and can access them through their smart phones and eReaders. Furthermore, having more online options such as Amazon provides consumers with the availability to select stores that provide lower prices.
Rivalry from Competitive Companies
The major competitor for Barnes and Noble is Amazon. Other competitors include Apple and Google. Based on the case, Barnes and Nobles market capitalization is about $1 billion. Amazon’s market capitalization is at $98 billion, which gives Barnes and Noble a high competition range to cover.
Threat of substitute Products
Threats of New Entry
The book industry has highly been affected by the introduction of the Internet. According to the case study, companies such as Borders have collapsed owing to the increase in demand of digital books. This makes it difficult for new publishers and book retailers to enter the market unless they have to offer new digital options in the book industry. Furthermore, setting up a new online store is costly owing to the information technological infrastructure.
Supplier Power
Supplier power is moderate. The chances of having a high success book are low, and the industry is saturated with a high number of suppliers, which makes the publishers and retail stores have more options in the business.
- How are B&N and the book publishers changing their business models to deal with the Internet and e-book technology?
Barnes and Noble has been involved in the development and marketing of Nook series of e-readers and tablets. Based on the case study, the market share of Barnes and Noble for this development opportunity has increased significantly. The purchase of digital e-books has increased compared to the books sold via the physical bookstores. Additionally, the sales from e-books have increased to almost $970 million, in 2011, which is more than the sales from the traditional bookstores.
- Will B&N new strategy be successful? Explain your answer
This strategy by Barnes and Noble is likely to be successful. Technological advancement is increasing in the internet, and new apps are being developed. Furthermore, based on the case study, in 2012, Microsoft invested $300 million for a 17.6% in the company and thus that the Nook application will be included in the Windows 8 application and this is likely to generate more sales.
- Is there anything else B&N and the book publishers should be doing to stimulate more business?
According to Greenfield (2013), the sales of e-book, retailing have dipped a little. However, the option to handle this is to increase the retail experience for consumers. For instance, the use of enhanced e-books can provide more user experience for consumers.
References
Can This Book store be Saved? Case study
Greenfield, J. (2013, February 6). Barnes & Noble's Big Problem -- and What to Do About It - Forbes. Information for the World's Business Leaders - Forbes.com. Retrieved August 22, 2013, from http://www.forbes.com/sites/jeremygreenfield/2013/02/06/barnes-nobles-big-problem-and-what-to-do-about-it/
