1. A Case Analysis of Barnes & Noble
MGMT 4842 – Strategic Management
A Case Analysis of Barnes & Noble
Robert Daigle - Sidney Best - Jack Zeigler - Charlie Smith
Jessica Whitley - Josh Cornwell

2. Company Background
The Barnes family's history in the book business started in 1873
The company revolutionized bookselling by introducing giant, supermarket-style stores with deeply discounted books in the 1970s
As of July 2010 B&N operates 717 retail bookstore locations in all 50 states and 633 college bookstores
These stores stock between 60, ,000 book titles

3. Issue 1
Barnes & Noble needs to address the company’s lack of effective leadership in its effort to sell the company
Alternative 1: The first alternative is for the company to attempt to handle the sale of the company in-house.
Alternative 2: Another option to resolve this dissonance in the boardroom is hire a third party consultant to handle the sale of this company.

4. S.W.O.T Analysis Strengths Weaknesses Opportunities Threats
Barnes & Noble is an established brand with a solid market presence which correlates into a strong competitive advantage.
Barnes & Noble enters into the digital market and shows a strong presence with its multi-channel strategy.
Price conscious customers are attracted to Barnes & Noble’s discount pricing.
Barnes & Noble offers benefits to their customers.
Barnes & Noble’s acquisition of Barnes &Noble College has propelled the company into the college bookstore market.
Weaknesses
Barnes & Noble’s profitability has been harshly impacted by legal proceedings.
Competitors are causing weak margins.
Reliance on a small number of
suppliers.
College textbooks sales shifting to renting textbooks or digital textbooks.
Falling profit margins cause less investment opportunities.
Opportunities
Considerable growth expected from the eReader and eBook areas .
With the acquisition of B&N College, Barnes & Noble has forayed into the college textbook market .
Barnes & Noble launches a “go-green” line of products .
Barnes & Noble will become the leading and largest retailer of magazines and newspapers in America.
Threats
Barnes & Noble’s growth opportunities are negatively affected by competition and price wars.
Decreasing physical book sales are reported even though digital product sales increase .
College enrollment is declining due to a decrease in state funding .
Barnes & Noble embroiled in boardroom issues.
Barnes & Noble sees decline in holiday sales.

5. Issue 1 Alternatives Alternative 1 Alternative 2 Pros
Less expensive than hiring a consulting firm
Would eliminate the 2 controversial parties having direct contact
Cons
Slower results
Consumes company time and resources
Bias can still be prominent
Pros
Non-Bias interpretation
Shareholders interests in mind
Results produced in a timely manor
Cons
High costs
Vulnerable to consultants having access to information
Difficulty in agreement on consultant

6. Issue 1 Recommendation
Recommendation: Alternative 2- hire a third party consultant to handle the sale of this company.
Addresses the companies need for decisions to be made in a timely manner.
Important the decisions be made quickly before the situation becomes worse than it is.
This alternative will also provide stability for the company.

7. Issue 2
Barnes & Noble faces a reduction in its profit margins. This is caused by increases in competition, government regulation, and online sales.
Alternative 2: The second alternative is for Barnes and Noble to market eBooks and eReaders inside its bookstores.
Alternative 1: The first alternative is to increase product differentiation.

8. Issue 2 Alternatives Alternative 1 Alternative 2 Pros
Product differentiation can lead to increased profit margins
Utilizing physical stores
Cons
Hard to establish a truly “unique” product
Pros
Using stores to promote new eReader technology
Provides a one-on-one experience
Cons
Can lose traditional book readers to the eReader
Can potential make physical stores obsolete

9. Recommendation: Alternative 1- Increase product differentiation
Issue 2 Recommendation
Recommendation: Alternative 1- Increase product differentiation
Makes B&N more appealing in the marketplace
B&N have started this process by introducing its NOOK in a color version

11. Issue 3
Barnes & Noble faces is its decline of physical book sales . This is due to a changing consumer trends towards digital technology.
Alternative 2: The second alternative is to create special offers for college students.
Alternative 1: The first alternative is to expand the company’s eBook sales with select and exclusive products.

12. Issue 3 Alternatives Alternative 1 Alternative 2 Pros
Offering exclusive products can build a loyal customer base
Cons
Issues with obtaining licenses or rights
Shifting to digital media can be costly
Can make physical stores obsolete
Pros
Dramatic increase in repeat purchases
Can be marketed to any level of education
Possibility of renting eReaders
Cons
Decrease in printed textbook sales

13. Issue 3 Recommendation
Recommendation: Alternative 1- Expand the company’s eBook sales with select and exclusive products.
Increases customer loyalty and increase brand recognition for the Nook.
By increasing brand recognition and consumer loyalty B&N may be able to beat Amazon for dominance over the industry market share.

14. 11/29/10
Questions and Answers