Strategic_Choice_and_Evaluation

Running head: STRATEGIC CHOICE AND EVALUATION Barnes & Noble Strategic Choice and Evaluation Niska L. Soles University of Phoenix STR/581 Dr. Sam Sanders Barnes & Noble Strategic Choice and Evaluation After conducting both internal and external analysis, in order to have a complete understanding of strategic decision-making, redefining my focus was necessary. Barnes & Noble is a Fortune 500 company, and is the largest bookseller in the world. They did not get there by resting on their laurels. Having a good mission and vision statement is key. While the mission statement conveys the reason for the business, the vision statement should tell where the company is going. Giving strategic course details being taken by management and how the company will be led into the future. Barnes & Noble has a very specific direction specified in their vision statement. It is to gain a significant share of exciting new markets of digital and online sales and to place a Barnes & Noble bookstore in every reader’s pocket (Barnesandnoble.com). Most companies seem to do nothing when faced with an eroding core business but Barnes and Noble did not take that course. Their main competitor Borders ended up in bankruptcy and later closed although they attempted to get with the sign of the times. The creation of e-books and the e-reader forever changed the way people read. Books in print declined while e-books are growing at nearly 150% year by year (Wunker, 2011). Flowing with the technology changes instead of fighting them is the only way to go. Being able to purchase, download and read books instantly is appealing. In response to the changing times B&N created their own version of the e-reader which is affectionately known as the NOOK. Then to further their relevance they purchased the Fictionwise Company in 2009. At that time, they were a leader in the e-book marketplace. With the purchase of the company they launched the world’s largest eBook store. Generic Strategy Todays’ business managers are faced with the challenge of evaluating and choosing the right direction to move their company in. In order to move ahead, one must have a strategy or a combination of strategies that the company must implement. These strategies need to be researched and chosen by management and then evaluated to determine the success or need for adjustment. According to Pearce, a generic strategy is a core idea about how a firm can best compete in the marketplace. There are three generic strategies which entail low cost leadership, differentiation and focus. Value Discipline Determining the value discipline is one of the first steps. In the case of B&N, theirs is customer intimacy. Customers are able to talk to specialist in the store unlike those who favor the competitions Kindle. There is a desk inside of each store that is solely dedicated to the NOOK. The people at the desk are specifically trained on the features of the NOOK and can provide one on one training regarding the customers purchase. They also offer training classes in store at no charge to the consumer so that one can maximize their use of the product. Customer service is one of the focuses of B&N. In fact, they have a commitment to ensuring that they deliver a superior experience for all customers. In 2010, they were 9th on the Customer Service Champ list. This was ahead of Amazon who had previously held the #1 position the year before. In 2010, Amazon fell to the 11th position. Grand Strategies There are several grand strategies to choose from. One where a firm directs it resources to the profitable growth of a dominant product is concentrated growth (Pearce, 2011). In our text concentrated growth strategies lead to enhanced performance. A way for B&N to do this is to focus on the NOOK. The base of their business is making money but all of it is invested into the digital side of the business. Market Development Market development can be related to a switch in the way one advertises. While NOOK is advertised on television, looking at digital advertising options is worth consideration. Now days, most everyone is on the web in one way or another. Whether it is via a smart phone, tablet, lap top or desk top, consumers are accessing social media sites. Since more students are obtaining the electronic version of text books, an e-reader is a cost effective option. Having their product in front of more people and entice more customers. Product Development Product Development is all about substantial modification of existing products. Developing new product features and additional models and/or sizes also falls under this category. B&N has done all of that. The first edition with the e ink only had a touch portion at the bottom of the device. Now with the additions of the Simple Touch, NOOK Color, and the newest black and white reader with the glow light this has been explored and implemented. Their 8G version of the tablet style reader is comparable in price to that of the Kindle Fire. Divestiture The sale of a firm or major components of it are considered divestiture. Barnes & Noble could benefit from this. While other divisions of the business are making a profit, there are some that could be unloaded. According to their website, their main businesses currently consist of retail stores, internet, publishing, digital, and college bookstores. The college bookstore division may be one of the division to look at for divesting. Since students are looking more to renting the books or at the electronic versions, their sales in this area have decreased. They have adapted a rental version as well but they are not experiencing growth in their college bookstore business. Joint venture Joint venture is also another grand strategy. In this companies create a co-owned business that operates for their mutual benefit (Pearce, p.206). The Nook division’s growth has come at enormous financial cost, weighing down on Barnes & Noble’s bottom line and prompting the strategic review. This year B&N has taken advantage of this. In April they created a partnership with Microsoft. In this venture where Microsoft invested 300 million dollars, it provided them 17.6% of the business. This provided B&N with a larger and stable financial partner. This gives them breathing room to and additional funds toward developing and improving NOOK devices. The new company which has yet to be named, are parts of the company’s strategy that will capitalized on the quick growth of the NOOK business. According to B&N’s CEO William Lynch, it will also solidify their position as leaders in an exploding digital content market and education markets (De La Merced, 2012). Barnes & Noble Mission Statement: "Our mission is to operate the best specialty retail business in America, regardless of the product we sell. Because the product we sell is books, our aspirations must be consistent with the promise and the ideals of the volumes which line our shelves. To say that our mission exists independent of the product we sell is to demean the importance and the distinction of being booksellers. "Above all, we expect to be a credit to the communities we serve, a valuable resource to our customers, and a place where our dedicated booksellers can grow and prosper. Toward this end we will not only listen to our customers and booksellers but embrace the idea that the Company is at their service." Keeping focused on these words will help the management constantly reviewing the changes going on around them and making decisions that will keep them moving forward. Long term objectives and strategies are important to the success or failure of the business. This paper looked at a combination of strategies that B&N are using and suggested some for them to use in order to move their company forward and increase market share. References “Barnes & Noble Booksellers.” Barnes & Noble, Inc..N.p., n.d. Web. 5 June 2012.