At the end of 1998, Jonathan Bulkeley, the newly-named CEO of barnesandnoble.com, is faced with a challenge. As the second leading online bookseller behind Amazon.com, barnesandnoble.com must build its market share. With Forrester Research predicting that the online bookselling market would grow to $3 billion in 2003, how could barnesandnoble.com attract more of the "newbies" coming onto the web to its site and become the leading online bookseller--as it was in the bricks-and-mortar world--over the long run?
Swot Analysis of "barnesandnoble.com (B)" 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 Bookseller facing as an external strategic factors. Some of the topics covered in barnesandnoble.com (B) 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 (B) casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, geopolitical disruptions, there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, cloud computing is disrupting traditional business models,
supply chains are disrupted by pandemic , increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of barnesandnoble.com (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in barnesandnoble.com (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Barnesandnoble.com Bookseller, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Barnesandnoble.com Bookseller 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 (B) can be done for the following purposes –
1. Strategic planning using facts provided in barnesandnoble.com (B) case study
2. Improving business portfolio management of Barnesandnoble.com Bookseller
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 Bookseller
Strengths barnesandnoble.com (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Barnesandnoble.com Bookseller in barnesandnoble.com (B) Harvard Business Review case study are -
Ability to lead change in Technology & Operations field
– Barnesandnoble.com Bookseller 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 Bookseller 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 Bookseller 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.
Diverse revenue streams
– Barnesandnoble.com Bookseller is present in almost all the verticals within the industry. This has provided firm in barnesandnoble.com (B) 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.
Analytics focus
– Barnesandnoble.com Bookseller 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.
Innovation driven organization
– Barnesandnoble.com Bookseller is one of the most innovative firm in sector. Manager in barnesandnoble.com (B) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Organizational Resilience of Barnesandnoble.com Bookseller
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Barnesandnoble.com Bookseller does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Barnesandnoble.com Bookseller 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.
Low bargaining power of suppliers
– Suppliers of Barnesandnoble.com Bookseller in the sector have low bargaining power. barnesandnoble.com (B) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Barnesandnoble.com Bookseller to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Barnesandnoble.com Bookseller in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Barnesandnoble.com Bookseller has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in barnesandnoble.com (B) 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.
Strong track record of project management
– Barnesandnoble.com Bookseller 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
– Barnesandnoble.com Bookseller has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Barnesandnoble.com Bookseller to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses barnesandnoble.com (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of barnesandnoble.com (B) are -
Low market penetration in new markets
– Outside its home market of Barnesandnoble.com Bookseller, firm in the HBR case study barnesandnoble.com (B) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, Barnesandnoble.com Bookseller has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
No frontier risks strategy
– After analyzing the HBR case study barnesandnoble.com (B), 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.
Capital Spending Reduction
– Even during the low interest decade, Barnesandnoble.com Bookseller 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.
Slow decision making process
– As mentioned earlier in the report, Barnesandnoble.com Bookseller 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 Bookseller 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.
Slow to strategic competitive environment developments
– As barnesandnoble.com (B) HBR case study mentions - Barnesandnoble.com Bookseller 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.
Increasing silos among functional specialists
– The organizational structure of Barnesandnoble.com Bookseller is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Barnesandnoble.com Bookseller needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Barnesandnoble.com Bookseller to focus more on services rather than just following the product oriented approach.
High cash cycle compare to competitors
Barnesandnoble.com Bookseller has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Lack of clear differentiation of Barnesandnoble.com Bookseller products
– To increase the profitability and margins on the products, Barnesandnoble.com Bookseller needs to provide more differentiated products than what it is currently offering in the marketplace.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study barnesandnoble.com (B), it seems that the employees of Barnesandnoble.com Bookseller 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.
Aligning sales with marketing
– It come across in the case study barnesandnoble.com (B) 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 (B) can leverage the sales team experience to cultivate customer relationships as Barnesandnoble.com Bookseller is planning to shift buying processes online.
Opportunities barnesandnoble.com (B) | 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 (B) are -
Buying journey improvements
– Barnesandnoble.com Bookseller can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. barnesandnoble.com (B) 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Barnesandnoble.com Bookseller 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 (B), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Barnesandnoble.com Bookseller can develop new processes and procedures in Technology & Operations 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.
Learning at scale
– Online learning technologies has now opened space for Barnesandnoble.com Bookseller 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.
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 Bookseller can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Barnesandnoble.com Bookseller 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Barnesandnoble.com Bookseller is facing challenges because of the dominance of functional experts in the organization. barnesandnoble.com (B) 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Barnesandnoble.com Bookseller 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 Bookseller to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help Barnesandnoble.com Bookseller to increase its market reach. Barnesandnoble.com Bookseller 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Barnesandnoble.com Bookseller 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.
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 Bookseller 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 Bookseller 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Barnesandnoble.com Bookseller can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Bookseller can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats barnesandnoble.com (B) 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 (B) are -
Shortening product life cycle
– it is one of the major threat that Barnesandnoble.com Bookseller is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Barnesandnoble.com Bookseller 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 Bookseller can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study barnesandnoble.com (B), Barnesandnoble.com Bookseller 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 .
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 Bookseller.
Consumer confidence and its impact on Barnesandnoble.com Bookseller 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.
Stagnating economy with rate increase
– Barnesandnoble.com Bookseller 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.
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 Bookseller needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Regulatory challenges
– Barnesandnoble.com Bookseller 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.
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 Bookseller business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Barnesandnoble.com Bookseller
– 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 Bookseller.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Barnesandnoble.com Bookseller 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 (B) .
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.
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.
Weighted SWOT Analysis of barnesandnoble.com (B) 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 (B) 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 (B) 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 (B) 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 (B) 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 Bookseller needs to make to build a sustainable competitive advantage.
