Case Study Description of Barnes & Noble, Inc.: The Yucaipa Proxy Challenge
Ron Burkle is an activist investor and stockholder of Barnes & Noble, Inc. (BN). In September 2010, through his company, The Yucaipa Companies (Yucaipa), Burkle filed a "Definitive Proxy" to challenge BN's slate of board-of-director nominees at the upcoming stockholder meeting. The proxy was made in response to a ruling against Yucaipa by the Delaware Chancery Court concerning a lawsuit that challenged Barnes and Noble's poison-pill provision, which prevented outsiders becoming majority stockholders. Burkle disagreed with BN's founder, chairman and owner of the majority stake in the company, Leonard Riggio, concerning BN's long-term strategy. While Burkle wanted the company to cede ground to Amazon in the digital reader marketplace and instead concentrate on BN's physical stores, Riggio believed that the Nook eReader should be the centrepiece of the company's strategy. Riggio had to respond to the Yucaipa proxy in the short-term and come up with a plan of action to retain control of the company in the long term.
Swot Analysis of "Barnes & Noble, Inc.: The Yucaipa Proxy Challenge" written by Ram Subramanian includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Yucaipa Burkle facing as an external strategic factors. Some of the topics covered in Barnes & Noble, Inc.: The Yucaipa Proxy Challenge case study are - Strategic Management Strategies, Competitive strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Barnes & Noble, Inc.: The Yucaipa Proxy Challenge casestudy better are - – challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation, there is backlash against globalization, there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%,
supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Barnes & Noble, Inc.: The Yucaipa Proxy Challenge
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Barnes & Noble, Inc.: The Yucaipa Proxy Challenge case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Yucaipa Burkle, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Yucaipa Burkle 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 Barnes & Noble, Inc.: The Yucaipa Proxy Challenge can be done for the following purposes –
1. Strategic planning using facts provided in Barnes & Noble, Inc.: The Yucaipa Proxy Challenge case study
2. Improving business portfolio management of Yucaipa Burkle
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 Yucaipa Burkle
Strengths Barnes & Noble, Inc.: The Yucaipa Proxy Challenge | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Yucaipa Burkle in Barnes & Noble, Inc.: The Yucaipa Proxy Challenge Harvard Business Review case study are -
Diverse revenue streams
– Yucaipa Burkle is present in almost all the verticals within the industry. This has provided firm in Barnes & Noble, Inc.: The Yucaipa Proxy Challenge 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.
Training and development
– Yucaipa Burkle has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Barnes & Noble, Inc.: The Yucaipa Proxy Challenge 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Barnes & Noble, Inc.: The Yucaipa Proxy Challenge firm has clearly differentiated products in the market place. This has enabled Yucaipa Burkle to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Yucaipa Burkle to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Yucaipa Burkle 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 Barnes & Noble, Inc.: The Yucaipa Proxy Challenge HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Yucaipa Burkle 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 Barnes & Noble, Inc.: The Yucaipa Proxy Challenge - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Strategy & Execution field
– Yucaipa Burkle 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 Yucaipa Burkle in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Yucaipa Burkle is one of the leading recruiters in the industry. Managers in the Barnes & Noble, Inc.: The Yucaipa Proxy Challenge are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Learning organization
- Yucaipa Burkle is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Yucaipa Burkle is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Barnes & Noble, Inc.: The Yucaipa Proxy Challenge Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy in the Barnes & Noble, Inc.: The Yucaipa Proxy Challenge Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Superior customer experience
– The customer experience strategy of Yucaipa Burkle in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Yucaipa Burkle in the sector have low bargaining power. Barnes & Noble, Inc.: The Yucaipa Proxy Challenge has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Yucaipa Burkle to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Yucaipa Burkle has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Yucaipa Burkle to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Barnes & Noble, Inc.: The Yucaipa Proxy Challenge | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Barnes & Noble, Inc.: The Yucaipa Proxy Challenge are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Barnes & Noble, Inc.: The Yucaipa Proxy Challenge, in the dynamic environment Yucaipa Burkle has struggled to respond to the nimble upstart competition. Yucaipa Burkle has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Barnes & Noble, Inc.: The Yucaipa Proxy Challenge 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 Yucaipa Burkle has relatively successful track record of launching new products.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Barnes & Noble, Inc.: The Yucaipa Proxy Challenge, is just above the industry average. Yucaipa Burkle needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Slow to strategic competitive environment developments
– As Barnes & Noble, Inc.: The Yucaipa Proxy Challenge HBR case study mentions - Yucaipa Burkle 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.
Skills based hiring
– The stress on hiring functional specialists at Yucaipa Burkle has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High bargaining power of channel partners
– Because of the regulatory requirements, Ram Subramanian suggests that, Yucaipa Burkle 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.
Low market penetration in new markets
– Outside its home market of Yucaipa Burkle, firm in the HBR case study Barnes & Noble, Inc.: The Yucaipa Proxy Challenge needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– It come across in the case study Barnes & Noble, Inc.: The Yucaipa Proxy Challenge 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 Barnes & Noble, Inc.: The Yucaipa Proxy Challenge can leverage the sales team experience to cultivate customer relationships as Yucaipa Burkle is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Yucaipa Burkle has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Yucaipa Burkle even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High operating costs
– Compare to the competitors, firm in the HBR case study Barnes & Noble, Inc.: The Yucaipa Proxy Challenge has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Yucaipa Burkle 's lucrative customers.
Lack of clear differentiation of Yucaipa Burkle products
– To increase the profitability and margins on the products, Yucaipa Burkle needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Barnes & Noble, Inc.: The Yucaipa Proxy Challenge | 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 Barnes & Noble, Inc.: The Yucaipa Proxy Challenge are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Yucaipa Burkle can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– Yucaipa Burkle can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Barnes & Noble, Inc.: The Yucaipa Proxy Challenge suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Manufacturing automation
– Yucaipa Burkle 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Yucaipa Burkle 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Yucaipa Burkle to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Yucaipa Burkle to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Yucaipa Burkle 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, Barnes & Noble, Inc.: The Yucaipa Proxy Challenge, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help Yucaipa Burkle to increase its market reach. Yucaipa Burkle will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Creating value in data economy
– The success of analytics program of Yucaipa Burkle has opened avenues for new revenue streams for the organization in the industry. This can help Yucaipa Burkle to build a more holistic ecosystem as suggested in the Barnes & Noble, Inc.: The Yucaipa Proxy Challenge case study. Yucaipa Burkle can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Yucaipa Burkle has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Barnes & Noble, Inc.: The Yucaipa Proxy Challenge - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Yucaipa Burkle to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Yucaipa Burkle to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Developing new processes and practices
– Yucaipa Burkle 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Yucaipa Burkle can use these opportunities to build new business models that can help the communities that Yucaipa Burkle 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 Yucaipa Burkle in the consumer business. Now Yucaipa Burkle can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Barnes & Noble, Inc.: The Yucaipa Proxy Challenge External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Barnes & Noble, Inc.: The Yucaipa Proxy Challenge are -
Increasing wage structure of Yucaipa Burkle
– 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 Yucaipa Burkle.
Shortening product life cycle
– it is one of the major threat that Yucaipa Burkle is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Yucaipa Burkle in the Strategy & Execution sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Yucaipa Burkle 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 Barnes & Noble, Inc.: The Yucaipa Proxy Challenge .
High dependence on third party suppliers
– Yucaipa Burkle 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.
Technology acceleration in Forth Industrial Revolution
– Yucaipa Burkle has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Yucaipa Burkle needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Environmental challenges
– Yucaipa Burkle needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Yucaipa Burkle can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Yucaipa Burkle in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Yucaipa Burkle business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Yucaipa Burkle 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.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Yucaipa Burkle will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Barnes & Noble, Inc.: The Yucaipa Proxy Challenge, Yucaipa Burkle may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Weighted SWOT Analysis of Barnes & Noble, Inc.: The Yucaipa Proxy Challenge 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 Barnes & Noble, Inc.: The Yucaipa Proxy Challenge 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 Barnes & Noble, Inc.: The Yucaipa Proxy Challenge 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 Barnes & Noble, Inc.: The Yucaipa Proxy Challenge 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 Barnes & Noble, Inc.: The Yucaipa Proxy Challenge 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 Yucaipa Burkle needs to make to build a sustainable competitive advantage.
