Barnes and Noble strategies
B&N has adopted various strategies to improve its market share and enhance its competitive position in the bookselling industry. Concentric diversification is one of the strategies that B&N has implemented. The firm has added an assortment of new but related products such as toys, movies, music, book signing events, and so forth. Increasing the number of products offered leads to increased visits to stores and improved in-store sales. Customer satisfaction is also enhanced, as well as loyalty to the brand.
B&N has modeled its stores to be like community centers. Community centers provide the customer with an opportunity to sample various books before making a purchase (Bronner, 2018). B&N stores offer the customer a satisfying experience by providing a comfortable environment where you can read and interact with other book lovers. They have comfortable lounges, coffee shops, and knowledgeable employees to provide buyers with intimate reading experiences. Local bookstores cater to the tastes of the local community and provide an in-person experience. This has bolstered the reputation of the brand and customer loyalty.
Barnes and Noble have also diversified into the online business where it has made significant investments, especially on the Nook reader. The company has invested significant resources into the Nook reader to improve its competitive position against similar products such as Amazon’s Kindle. The latest version of the Nook reader has been rated as the best in the market. B&N also sells e-books through its online platform and controls 26% of the e-book market (Wunker, 2011). The firm aggressively promotes its online products on various platforms, including its physical stores.
Grand Strategy Matrix; strategies and assumptions
Various strategies have been identified using the Grand Strategy Matrix for B&N’s two divisions; in-store sales and online sales. The assumptions made in applying the matrix are also discussed.
In-store book sales fall under quadrant IV. Two assumptions have been made in arriving at this conclusion; strong competitive status and slow market growth. B&N has a strong competitive position in this division because it owns numerous book stores and records high in-store sales (Hall & Gupta, 2010). The brick-and-mortar stores provide customers with a relaxing environment to revel in their reading experience. Employees at the firm’s stores also offer excellent customer service, enhancing the competitive status of the firm.
The second assumption is slow market growth of in-store sales. Changes in the bookselling industry and technological advancements have affected booksellers significantly (Gregory, 2018). These changes include an increase in the popularity of e-books, an increase in the availability of smartphones, a decline in time spent reading books, among others. These changes have resulted in a decline in sales in the bookselling industry. The market is thus experiencing slow growth as more customers shift to online platforms to obtain their favorite books.
The strategies identified for in-store sales include concentric diversification and joint ventures. Provision of new products or services closely related to those B&N already deals in can significantly influence market growth. Diversification into new products can increase store visits and in-store sales. Getting into a partnership with similar firms such as independent booksellers in the form of joint ventures is also a viable strategy. Joint ventures can result in increased sales and reduced costs.
The online sales division of B&N falls in quadrant II. The assumptions made are that the firm has a weak competitive position and the market growth is rapid. B&N has a weak competitive position in online sales. Amazon, B&N’s main competitor, has invested heavily in technology and specializes in online commerce. B&N has not managed to compete effectively in this division. B&N has tried to penetrate the market by offering and promoting its products online, but still has significant strides to make to operate at Amazon’s level.
The market growth of online sales is high. This is largely attributable to technological advancements that have made digital content more attractive and convenient. Content is mainly distributed through electronic means, rather than print media. People prefer e-books and audiobooks instead of hard copies. Technology has also made digital devices more affordable, thus contributing to the increased demand for digital content and surge in e-commerce. The market growth of online book sales is thus bound to continue rising in the future.
The online sales of B&N fall under quadrant II, which provides several feasible strategies. Market penetration is one key strategy the firm can use. B&N can expand its operations in online platforms to gain an improved position in the online market. Market development should also be pursued to obtain new markets. B&N should also execute a product development strategy. A variety of products results in an increased number of clients and improved returns. B&N should improve their website infrastructure and features to make it more attractive and easier to use for customers. Integration and diversification are also possible strategies.
Conclusion
Some of the strategies in place at Barnes and Noble have been effective in achieving desired outcomes. Concentric diversification has been useful in increasing the firm’s market share and competitive position. However, B&N should increase the assortment of products it provides to include more home goods such as furniture, cookware, and so forth. Diversification into the provision of online products has also enabled the firm to penetrate the online market. It has obtained a good share of the online market, though Amazon is still the dominant player.
Designing book stores as community centers has enhanced brand loyalty and improved the overall customer experience. B&N also holds events and offers merchandise to customers to strengthen the community and promote the brand. However, a few of the strategies have not been effective. The Nook reader has enabled the firm to penetrate the online market but it has generated little returns compared to the investments made (Bronner, 2018). The firm should drop the production of the reader and redirect the resources to other profitable ventures.
References
Bronner, D. W. (2018, January 17). 5 things Barnes & Noble can do right now to save itself. Retrieved June 12, 2020, from https://money.cnn.com/2018/01/17/news/companies/save-barnes–noble/index.html
Hall, W., & Gupta, A. (2010). Barnes & Noble, Inc.: Maintaining a competitive edge in an ever-changing industry. Journal of Business Case Studies, 6(4), 9-22. Retrieved from ProQuest.
Gregory, W. (2018). “Barnes & Noble: Business Analysis” Undergraduate Theses and Professional Papers. 192. Retrieved from https://scholarworks.umt.edu/utpp/192
Wunker, S. (2011, June 29). Barnes & Noble’s Smart Strategy. Retrieved from https://hbr.org/2011/06/barnes-nobles-smart-strategy