A Case Analysis of Barnes & Noble

1. A Case Analysis of Barnes & Noble MGMT 4842 – Strategic Management 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 60,000-200,000 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 2: Another option to resolve this dissonance in the boardroom is hire a third party consultant to handle the sale of this company. • Alternative 1: The first alternative is for the company to attempt to handle the sale of the company in-house.

4. S.W.O.T Analysis

5. Issue 1 Alternatives Alternative 1 Alternative 2 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 • 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

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 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 • Pros • Product differentiation can lead to increased profit margins • Utilizing physical stores • Cons • Hard to establish a truly “unique” product

9. 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 Dramatic increase in repeat purchases Can be marketed to any level of education Possibility of renting eReaders Cons Decrease in printed textbook sales • 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

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. Questions and Answers