SWOT ANALYSIS ON Barnes & Noble -
November 25th, 2010
Barnes & Noble, Inc. is the largest book retailer in the United States, operating mainly through its Barnes & Noble Booksellers chain of bookstores headquartered in lower Fifth Avenue in Lower Manhattan, New York City. Barnes & Noble also operated the chain of small B. Dalton Booksellers stores in malls until they announced the liquidation of the chain.
The company is known for large, upscale retail outlets, many of which contain a café serving Starbucks Coffee, and for competitive discounting of bestsellers. Most stores also sell magazines, newspapers, DVDs, graphic novels, gifts, games, and music. Video games and related items were sold in the company's GameStop retail outlets until October 2004, when the division was spun off into an independent company. Barnes & Noble is also known for selling the Barnes & Noble Nook, as well as a teddy bear named "Barnsie".
The company operates 717 stores (as of July 31, 2010) in all 50 U.S. states and the District of Columbia in addition to 636 college bookstores, which serves nearly 4 million students and 250,000 faculty members across the country.
On Aug 3, 2010, the company announced that its board was considering a sale of the company, possibly to an investor group led by its chairman, Leonard Riggio.
• It has a strong presence regarding its products.
• Included in Fortune 500 list of companies.
• Product line includes: books, music, movies etc.
• Globally recognized as the largest book retailer.
• Strives for integrating such an environment that creates a connection with its customers.
• It has also established itself as an e-retailer (9% of its sales takes place through internet, 89% sales on stores)
• It is the market leader in book retailing with over 1,357 stores worldwide, with approximately 637 stores on college campuses. (May1, 2010)
• It has strong brand equity, and partnering with Starbucks who have cafes in these stores attracts a lot of customers.
• Uses multiple channels for product distribution, online as well as stores that cover a large network.
• Asset Leverage is yet another advantage that Barnes and Nobel incur.
• Effective communication through their stores by placing different kiosks and boards.
• Research and development is very high regarding the company.
• Innovation regarding new technology.
• Customer loyalty that is integrated with the brand itself.
• It is gradually growing online due to the way the new generation is changing.
• Management team has a strong sense of direction and customer feedback.
• Financial position is very strong.
• Also offers e-books.
• Large inventory and distribution center that support current operation.
• Nook, a new electronic product introduced by the company that stores more than a million books, with amazing features like Wi-Fi. Even Newspapers can be read read from this product with its high resolution display.
• Majority of the stores are established in the US, which shows a strong dependence on the US market.
• Recently the company is lacking in performance.
• Depends on a few particular suppliers.
• They should penetrate on a combination of making such an environment in stores that focus on selling books, music, movies, coffee and also they should indulge more in publishing books.
• Electronic commerce is growing and B&N should make use of the internet to cover more domains that would diversify the risk factor attached to the US market.
• Consumer spending is potentially increasing.
• It can start acquisitions in new markets if not established (financially strong).
• Takeovers and joint ventures of smaller yet significant companies that have good brand equity.
• Public libraries and companies such as Amazon.com are real threats to the company.
• Competition in both retailing book stores as well as online is getting tougher.
• Piracy and illegal downloading and copy of hard books in different markets is defecting the share of the company largely.
• Product substitution (books are being substituted for ebooks).
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