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 - – central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs, technology disruption, increasing energy prices, competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels,
geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google, 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 -
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 switching costs
– The high switching costs that Barnesandnoble.com Riggio 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.
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.
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.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Barnesandnoble.com Riggio digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Barnesandnoble.com Riggio 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 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.
Analytics focus
– Barnesandnoble.com Riggio 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 Jeffrey Rayport, Dickson L. Louie 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.
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.
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.
Effective Research and Development (R&D)
– Barnesandnoble.com Riggio 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 barnesandnoble.com (C) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
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 -
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.
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.
Lack of clear differentiation of Barnesandnoble.com Riggio products
– To increase the profitability and margins on the products, Barnesandnoble.com Riggio needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
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.
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Barnesandnoble.com Riggio is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study barnesandnoble.com (C) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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 Barnesandnoble.com Riggio supply chain. Even after few cautionary changes mentioned in the HBR case study - barnesandnoble.com (C), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Barnesandnoble.com Riggio vulnerable to further global disruptions in South East Asia.
Workers concerns about automation
– As automation is fast increasing in the segment, Barnesandnoble.com Riggio 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.
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 -
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Barnesandnoble.com Riggio is facing challenges because of the dominance of functional experts in the organization. barnesandnoble.com (C) 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.
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.
Buying journey improvements
– Barnesandnoble.com Riggio can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. barnesandnoble.com (C) 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.
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.
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.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Barnesandnoble.com Riggio 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 Barnesandnoble.com Riggio to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Barnesandnoble.com Riggio can use these opportunities to build new business models that can help the communities that Barnesandnoble.com Riggio operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Leveraging digital technologies
– Barnesandnoble.com Riggio 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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Barnesandnoble.com Riggio 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 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 -
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. Barnesandnoble.com Riggio needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
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 Barnesandnoble.com Riggio.
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.
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.
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.
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.
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.
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.
Environmental challenges
– Barnesandnoble.com Riggio 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. Barnesandnoble.com Riggio can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
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.
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.
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) .
Regulatory challenges
– Barnesandnoble.com Riggio 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.
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.