Swot Analysis of "Leadership Online (B): Barnes & Noble vs. Amazon.com in 2005" written by Pankaj Ghemawat includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Barnes Noble facing as an external strategic factors. Some of the topics covered in Leadership Online (B): Barnes & Noble vs. Amazon.com in 2005 case study are - Strategic Management Strategies, Internet and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Leadership Online (B): Barnes & Noble vs. Amazon.com in 2005 casestudy better are - – supply chains are disrupted by pandemic , increasing energy prices, increasing household debt because of falling income levels, wage bills are increasing, increasing commodity prices, competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%,
geopolitical disruptions, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Leadership Online (B): Barnes & Noble vs. Amazon.com in 2005
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Leadership Online (B): Barnes & Noble vs. Amazon.com in 2005 case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Barnes Noble, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Barnes Noble operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Leadership Online (B): Barnes & Noble vs. Amazon.com in 2005 can be done for the following purposes –
1. Strategic planning using facts provided in Leadership Online (B): Barnes & Noble vs. Amazon.com in 2005 case study
2. Improving business portfolio management of Barnes Noble
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Barnes Noble
Strengths Leadership Online (B): Barnes & Noble vs. Amazon.com in 2005 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Barnes Noble in Leadership Online (B): Barnes & Noble vs. Amazon.com in 2005 Harvard Business Review case study are -
Effective Research and Development (R&D)
– Barnes Noble has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Leadership Online (B): Barnes & Noble vs. Amazon.com in 2005 - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Barnes Noble is present in almost all the verticals within the industry. This has provided firm in Leadership Online (B): Barnes & Noble vs. Amazon.com in 2005 case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Organizational Resilience of Barnes Noble
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Barnes Noble does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Barnes Noble has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Barnes Noble to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Strategy & Execution field
– Barnes Noble is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Barnes Noble in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Barnes Noble has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Leadership Online (B): Barnes & Noble vs. Amazon.com in 2005 Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Barnes Noble digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Barnes Noble has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Sustainable margins compare to other players in Strategy & Execution industry
– Leadership Online (B): Barnes & Noble vs. Amazon.com in 2005 firm has clearly differentiated products in the market place. This has enabled Barnes Noble to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Barnes Noble to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Barnes Noble has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Barnes Noble has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Ability to recruit top talent
– Barnes Noble is one of the leading recruiters in the industry. Managers in the Leadership Online (B): Barnes & Noble vs. Amazon.com in 2005 are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Low bargaining power of suppliers
– Suppliers of Barnes Noble in the sector have low bargaining power. Leadership Online (B): Barnes & Noble vs. Amazon.com in 2005 has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Barnes Noble to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Barnes Noble has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Leadership Online (B): Barnes & Noble vs. Amazon.com in 2005 HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Leadership Online (B): Barnes & Noble vs. Amazon.com in 2005 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Leadership Online (B): Barnes & Noble vs. Amazon.com in 2005 are -
Lack of clear differentiation of Barnes Noble products
– To increase the profitability and margins on the products, Barnes Noble needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, Barnes Noble has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Leadership Online (B): Barnes & Noble vs. Amazon.com in 2005 HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Barnes Noble has relatively successful track record of launching new products.
High bargaining power of channel partners
– Because of the regulatory requirements, Pankaj Ghemawat suggests that, Barnes Noble is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Slow to strategic competitive environment developments
– As Leadership Online (B): Barnes & Noble vs. Amazon.com in 2005 HBR case study mentions - Barnes Noble takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Interest costs
– Compare to the competition, Barnes Noble has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Barnes Noble is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Leadership Online (B): Barnes & Noble vs. Amazon.com in 2005 can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Low market penetration in new markets
– Outside its home market of Barnes Noble, firm in the HBR case study Leadership Online (B): Barnes & Noble vs. Amazon.com in 2005 needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
Barnes Noble has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Barnes Noble supply chain. Even after few cautionary changes mentioned in the HBR case study - Leadership Online (B): Barnes & Noble vs. Amazon.com in 2005, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Barnes Noble vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– It come across in the case study Leadership Online (B): Barnes & Noble vs. Amazon.com in 2005 that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Leadership Online (B): Barnes & Noble vs. Amazon.com in 2005 can leverage the sales team experience to cultivate customer relationships as Barnes Noble is planning to shift buying processes online.
Opportunities Leadership Online (B): Barnes & Noble vs. Amazon.com in 2005 | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Leadership Online (B): Barnes & Noble vs. Amazon.com in 2005 are -
Learning at scale
– Online learning technologies has now opened space for Barnes Noble to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Leveraging digital technologies
– Barnes Noble can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Barnes Noble can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Leadership Online (B): Barnes & Noble vs. Amazon.com in 2005, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Barnes Noble can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Building a culture of innovation
– managers at Barnes Noble can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Manufacturing automation
– Barnes Noble can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Creating value in data economy
– The success of analytics program of Barnes Noble has opened avenues for new revenue streams for the organization in the industry. This can help Barnes Noble to build a more holistic ecosystem as suggested in the Leadership Online (B): Barnes & Noble vs. Amazon.com in 2005 case study. Barnes Noble can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Barnes Noble can use these opportunities to build new business models that can help the communities that Barnes Noble operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Barnes Noble in the consumer business. Now Barnes Noble can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Barnes Noble can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Barnes Noble can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Barnes Noble has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Barnes Noble can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Threats Leadership Online (B): Barnes & Noble vs. Amazon.com in 2005 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Leadership Online (B): Barnes & Noble vs. Amazon.com in 2005 are -
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Barnes Noble in the Strategy & Execution sector and impact the bottomline of the organization.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Barnes Noble.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Barnes Noble can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Barnes Noble demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Barnes Noble needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Increasing wage structure of Barnes Noble
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Barnes Noble.
Shortening product life cycle
– it is one of the major threat that Barnes Noble is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Barnes Noble high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Barnes Noble can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Leadership Online (B): Barnes & Noble vs. Amazon.com in 2005 .
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Barnes Noble with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Stagnating economy with rate increase
– Barnes Noble can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Weighted SWOT Analysis of Leadership Online (B): Barnes & Noble vs. Amazon.com in 2005 Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Leadership Online (B): Barnes & Noble vs. Amazon.com in 2005 needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Leadership Online (B): Barnes & Noble vs. Amazon.com in 2005 is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Leadership Online (B): Barnes & Noble vs. Amazon.com in 2005 is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Leadership Online (B): Barnes & Noble vs. Amazon.com in 2005 is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Barnes Noble needs to make to build a sustainable competitive advantage.