At the end of 1999, Steve Riggio, the vice chairman and acting CEO of barnesandnoble.com, wonders what his company should do next against Amazon.com, the online retailer who is the leading online book seller in the United States. While barnesandnoble.com has been careful to expand into new categories related to media--such as magazines, CDs, and posters--Amazon.com has expanded into a variety of seemingly unrelated categories--such as Z-shops, auctions, and power tools. While some see this expansion as a weakness in Amazon.com's branding strategy, how could Riggio and barnesandnoble.com best exploit this so that they become the leading online bookseller over the long run in terms of market share and mind share?
Swot Analysis of "barnesandnoble.com (C)" written by Jeffrey Rayport, Dickson L. Louie includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Barnesandnoble.com Riggio facing as an external strategic factors. Some of the topics covered in barnesandnoble.com (C) case study are - Strategic Management Strategies, IT, Marketing, Supply chain and Technology & Operations.
Some of the macro environment factors that can be used to understand the barnesandnoble.com (C) casestudy better are - – increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%, challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy,
increasing transportation and logistics costs, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of barnesandnoble.com (C)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in barnesandnoble.com (C) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Barnesandnoble.com Riggio, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Barnesandnoble.com Riggio 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 barnesandnoble.com (C) can be done for the following purposes –
1. Strategic planning using facts provided in barnesandnoble.com (C) case study
2. Improving business portfolio management of Barnesandnoble.com Riggio
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 Barnesandnoble.com Riggio
Strengths barnesandnoble.com (C) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Barnesandnoble.com Riggio in barnesandnoble.com (C) Harvard Business Review case study are -
Ability to lead change in Technology & Operations field
– Barnesandnoble.com Riggio 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 Barnesandnoble.com Riggio in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Barnesandnoble.com Riggio are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Superior customer experience
– The customer experience strategy of Barnesandnoble.com Riggio in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Sustainable margins compare to other players in Technology & Operations industry
– barnesandnoble.com (C) firm has clearly differentiated products in the market place. This has enabled Barnesandnoble.com Riggio to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Barnesandnoble.com Riggio to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Barnesandnoble.com Riggio is one of the leading recruiters in the industry. Managers in the barnesandnoble.com (C) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Successful track record of launching new products
– Barnesandnoble.com Riggio has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Barnesandnoble.com Riggio 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.
Innovation driven organization
– Barnesandnoble.com Riggio is one of the most innovative firm in sector. Manager in barnesandnoble.com (C) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Low bargaining power of suppliers
– Suppliers of Barnesandnoble.com Riggio in the sector have low bargaining power. barnesandnoble.com (C) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Barnesandnoble.com Riggio to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Barnesandnoble.com Riggio has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Barnesandnoble.com Riggio to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Barnesandnoble.com Riggio 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 barnesandnoble.com (C) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Barnesandnoble.com Riggio
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Barnesandnoble.com Riggio does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy in the barnesandnoble.com (C) 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.
Weaknesses barnesandnoble.com (C) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of barnesandnoble.com (C) are -
Slow to strategic competitive environment developments
– As barnesandnoble.com (C) HBR case study mentions - Barnesandnoble.com Riggio 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.
No frontier risks strategy
– After analyzing the HBR case study barnesandnoble.com (C), 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.
Aligning sales with marketing
– It come across in the case study barnesandnoble.com (C) 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 barnesandnoble.com (C) can leverage the sales team experience to cultivate customer relationships as Barnesandnoble.com Riggio is planning to shift buying processes online.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study barnesandnoble.com (C), it seems that the employees of Barnesandnoble.com Riggio 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.
Skills based hiring
– The stress on hiring functional specialists at Barnesandnoble.com Riggio 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, Jeffrey Rayport, Dickson L. Louie suggests that, Barnesandnoble.com Riggio 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 Barnesandnoble.com Riggio, firm in the HBR case study barnesandnoble.com (C) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study barnesandnoble.com (C), is just above the industry average. Barnesandnoble.com Riggio 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 decision making process
– As mentioned earlier in the report, Barnesandnoble.com Riggio 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. Barnesandnoble.com Riggio 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 barnesandnoble.com (C) 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 Barnesandnoble.com Riggio 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Barnesandnoble.com Riggio is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Barnesandnoble.com Riggio needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Barnesandnoble.com Riggio to focus more on services rather than just following the product oriented approach.
Opportunities barnesandnoble.com (C) | 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 barnesandnoble.com (C) are -
Creating value in data economy
– The success of analytics program of Barnesandnoble.com Riggio has opened avenues for new revenue streams for the organization in the industry. This can help Barnesandnoble.com Riggio to build a more holistic ecosystem as suggested in the barnesandnoble.com (C) case study. Barnesandnoble.com Riggio can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Barnesandnoble.com Riggio 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Barnesandnoble.com Riggio 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, barnesandnoble.com (C), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Barnesandnoble.com Riggio can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Barnesandnoble.com Riggio can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Technology & Operations industry, but it has also influenced the consumer preferences. Barnesandnoble.com Riggio can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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. Barnesandnoble.com Riggio can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Barnesandnoble.com Riggio in the consumer business. Now Barnesandnoble.com Riggio can target international markets with far fewer capital restrictions requirements than the existing system.
Manufacturing automation
– Barnesandnoble.com Riggio 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.
Loyalty marketing
– Barnesandnoble.com Riggio 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Barnesandnoble.com Riggio can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Learning at scale
– Online learning technologies has now opened space for Barnesandnoble.com Riggio 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Barnesandnoble.com Riggio 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.
Better consumer reach
– The expansion of the 5G network will help Barnesandnoble.com Riggio to increase its market reach. Barnesandnoble.com Riggio 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.
Threats barnesandnoble.com (C) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study barnesandnoble.com (C) are -
Shortening product life cycle
– it is one of the major threat that Barnesandnoble.com Riggio is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Barnesandnoble.com Riggio 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 barnesandnoble.com (C) .
Stagnating economy with rate increase
– Barnesandnoble.com Riggio 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.
Consumer confidence and its impact on Barnesandnoble.com Riggio 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 dependence on third party suppliers
– Barnesandnoble.com Riggio 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.
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. Barnesandnoble.com Riggio can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Barnesandnoble.com Riggio with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Barnesandnoble.com Riggio 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.
Increasing wage structure of Barnesandnoble.com Riggio
– 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 Barnesandnoble.com Riggio.
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.
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 Barnesandnoble.com Riggio business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Barnesandnoble.com Riggio in the Technology & Operations industry. The Technology & Operations 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.
Technology acceleration in Forth Industrial Revolution
– Barnesandnoble.com Riggio has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Barnesandnoble.com Riggio 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.
Weighted SWOT Analysis of barnesandnoble.com (C) 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 barnesandnoble.com (C) 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 barnesandnoble.com (C) 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 barnesandnoble.com (C) 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 barnesandnoble.com (C) 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 Barnesandnoble.com Riggio needs to make to build a sustainable competitive advantage.
