Case Study Description of Barnes & Noble: Managing the E-Book Revolution
The case describes competition in the market for E-Books, and Barnes & Noble's Strategy in this industry. As a traditional retailer, B&N was challenged by the introduction of digital technologies that allow books to be published, distributed and sold to consumers electronically. New competitors like Amazon and Apple attacked the traditional industry structure, creating many uncertainties over the long term viability of traditional retailers. Amid this uncertainty, B&N must decide how to compete, in terms of both devices that can read E-Books, as well as standards for their distribution. Should they create a separate digital business, centered around their "Nook" E-Book reader, or maintain an integrated strategy? And how should they think about the fragmented standards for distributing E-Books? The case allows students to probe the dynamics of platform based industries, as well as what happens in traditional industries when attacked by new competitors adopting new digital technologies. It is developed using public source material.
Authors :: Alan MacCormack, Brian Kimball Dunn, Chris F. Kemerer
Swot Analysis of "Barnes & Noble: Managing the E-Book Revolution" written by Alan MacCormack, Brian Kimball Dunn, Chris F. Kemerer includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Books Attacked facing as an external strategic factors. Some of the topics covered in Barnes & Noble: Managing the E-Book Revolution case study are - Strategic Management Strategies, Disruptive innovation, IT, Product development and Technology & Operations.
Some of the macro environment factors that can be used to understand the Barnes & Noble: Managing the E-Book Revolution casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, central banks are concerned over increasing inflation, there is increasing trade war between United States & China, geopolitical disruptions, technology disruption, increasing energy prices, cloud computing is disrupting traditional business models,
increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Barnes & Noble: Managing the E-Book Revolution
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Barnes & Noble: Managing the E-Book Revolution case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Books Attacked, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Books Attacked 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: Managing the E-Book Revolution can be done for the following purposes –
1. Strategic planning using facts provided in Barnes & Noble: Managing the E-Book Revolution case study
2. Improving business portfolio management of Books Attacked
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Books Attacked
Strengths Barnes & Noble: Managing the E-Book Revolution | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Books Attacked in Barnes & Noble: Managing the E-Book Revolution Harvard Business Review case study are -
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Books Attacked digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Books Attacked 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.
Successful track record of launching new products
– Books Attacked has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Books Attacked 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.
Sustainable margins compare to other players in Technology & Operations industry
– Barnes & Noble: Managing the E-Book Revolution firm has clearly differentiated products in the market place. This has enabled Books Attacked to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Books Attacked to invest into research and development (R&D) and innovation.
Analytics focus
– Books Attacked is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Alan MacCormack, Brian Kimball Dunn, Chris F. Kemerer can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Diverse revenue streams
– Books Attacked is present in almost all the verticals within the industry. This has provided firm in Barnes & Noble: Managing the E-Book Revolution 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.
Superior customer experience
– The customer experience strategy of Books Attacked in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Books Attacked 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 Books Attacked is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Barnes & Noble: Managing the E-Book Revolution Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Books Attacked 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: Managing the E-Book Revolution HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Technology & Operations field
– Books Attacked 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 Books Attacked in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management
– Books Attacked is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– Books Attacked has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Books Attacked to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Books Attacked has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Weaknesses Barnes & Noble: Managing the E-Book Revolution | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Barnes & Noble: Managing the E-Book Revolution are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Barnes & Noble: Managing the E-Book Revolution, it seems that the employees of Books Attacked don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Capital Spending Reduction
– Even during the low interest decade, Books Attacked 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.
No frontier risks strategy
– After analyzing the HBR case study Barnes & Noble: Managing the E-Book Revolution, it seems that company is thinking about the frontier risks that can impact Technology & Operations strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Books Attacked is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Barnes & Noble: Managing the E-Book Revolution can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of Books Attacked products
– To increase the profitability and margins on the products, Books Attacked needs to provide more differentiated products than what it is currently offering in the marketplace.
Workers concerns about automation
– As automation is fast increasing in the segment, Books Attacked needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
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 Books Attacked supply chain. Even after few cautionary changes mentioned in the HBR case study - Barnes & Noble: Managing the E-Book Revolution, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Books Attacked vulnerable to further global disruptions in South East Asia.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Barnes & Noble: Managing the E-Book Revolution 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 Books Attacked has relatively successful track record of launching new products.
Aligning sales with marketing
– It come across in the case study Barnes & Noble: Managing the E-Book Revolution 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: Managing the E-Book Revolution can leverage the sales team experience to cultivate customer relationships as Books Attacked is planning to shift buying processes online.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Barnes & Noble: Managing the E-Book Revolution, is just above the industry average. Books Attacked 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.
Low market penetration in new markets
– Outside its home market of Books Attacked, firm in the HBR case study Barnes & Noble: Managing the E-Book Revolution needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities Barnes & Noble: Managing the E-Book Revolution | 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: Managing the E-Book Revolution are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Books Attacked is facing challenges because of the dominance of functional experts in the organization. Barnes & Noble: Managing the E-Book Revolution case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Books Attacked 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.
Building a culture of innovation
– managers at Books Attacked 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 Technology & Operations segment.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Books Attacked can use these opportunities to build new business models that can help the communities that Books Attacked operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
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. Books Attacked can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Books Attacked can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Barnes & Noble: Managing the E-Book Revolution 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Books Attacked 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 Books Attacked to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Books Attacked 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.
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 Books Attacked 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Books Attacked in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
Creating value in data economy
– The success of analytics program of Books Attacked has opened avenues for new revenue streams for the organization in the industry. This can help Books Attacked to build a more holistic ecosystem as suggested in the Barnes & Noble: Managing the E-Book Revolution case study. Books Attacked can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Books Attacked can use the latest technology developments to improve its manufacturing and designing process in Technology & Operations 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.
Using analytics as competitive advantage
– Books Attacked 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: Managing the E-Book Revolution - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Books Attacked to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Barnes & Noble: Managing the E-Book Revolution 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: Managing the E-Book Revolution are -
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. Books Attacked 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.
Technology acceleration in Forth Industrial Revolution
– Books Attacked has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Books Attacked needs to keep up with the evolution of technology in the Technology & Operations 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.
Regulatory challenges
– Books Attacked needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Technology & Operations industry regulations.
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: Managing the E-Book Revolution, Books Attacked may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
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.
Consumer confidence and its impact on Books Attacked 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.
Environmental challenges
– Books Attacked 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. Books Attacked can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
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. Books Attacked needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Books Attacked 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.
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.
Stagnating economy with rate increase
– Books Attacked 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.
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 Books Attacked in the Technology & Operations sector and impact the bottomline of the organization.
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Books Attacked can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Barnes & Noble: Managing the E-Book Revolution 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: Managing the E-Book Revolution 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: Managing the E-Book Revolution 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: Managing the E-Book Revolution 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: Managing the E-Book Revolution 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 Books Attacked needs to make to build a sustainable competitive advantage.
