Based on various researches at Oak Spring University , Barnes & Noble Education Inc is operating in a macro-environment that has been destablized by – wage bills are increasing, challanges to central banks by blockchain based private currencies, there is backlash against globalization, talent flight as more people leaving formal jobs, geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, technology disruption,
increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Barnes & Noble Education Inc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Barnes & Noble Education Inc can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Barnes & Noble Education Inc, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Barnes & Noble Education Inc 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 Education Inc can be done for the following purposes –
1. Strategic planning of Barnes & Noble Education Inc
2. Improving business portfolio management of Barnes & Noble Education Inc
3. Assessing feasibility of the new initiative in United States
4. Making a Retail (Specialty) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Barnes & Noble Education Inc
Strengths of Barnes & Noble Education Inc | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Barnes & Noble Education Inc are -
Successful track record of launching new products
– Barnes & Noble Education Inc has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Barnes & Noble Education Inc 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 Retail (Specialty) industry
- digital transformation varies from industry to industry. For Barnes & Noble Education Inc digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Barnes & Noble Education Inc 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.
Superior customer experience
– The customer experience strategy of Barnes & Noble Education Inc in Retail (Specialty) industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Barnes & Noble Education Inc 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.
Diverse revenue streams
– Barnes & Noble Education Inc is present in almost all the verticals within the Retail (Specialty) industry. This has provided Barnes & Noble Education Inc 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.
Operational resilience
– The operational resilience strategy of Barnes & Noble Education Inc comprises – understanding the underlying the factors in the Retail (Specialty) 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.
Organizational Resilience of Barnes & Noble Education Inc
– The covid-19 pandemic has put organizational resilience at the centre of everthing Barnes & Noble Education Inc does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Barnes & Noble Education Inc in the Services sector have low bargaining power. Barnes & Noble Education Inc has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Barnes & Noble Education Inc to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Barnes & Noble Education Inc is one of the leading players in the Retail (Specialty) industry in United States. It is in a position to attract the best talent available in United States. The firm has a robust talent identification program that helps in identifying the brightest.
Effective Research and Development (R&D)
– Barnes & Noble Education Inc has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Barnes & Noble Education Inc staying ahead in the Retail (Specialty) industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Barnes & Noble Education Inc 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.
High brand equity
– Barnes & Noble Education Inc has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Barnes & Noble Education Inc to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses of Barnes & Noble Education Inc | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Barnes & Noble Education Inc are -
Lack of clear differentiation of Barnes & Noble Education Inc products
– To increase the profitability and margins on the products, Barnes & Noble Education Inc needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Barnes & Noble Education Inc is dominated by functional specialists. It is not different from other players in the Retail (Specialty) industry, but Barnes & Noble Education Inc needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Barnes & Noble Education Inc to focus more on services in the Retail (Specialty) industry rather than just following the product oriented approach.
High bargaining power of channel partners in Retail (Specialty) industry
– because of the regulatory requirements in United States, Barnes & Noble Education Inc 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 Retail (Specialty) industry.
No frontier risks strategy
– From the 10K / annual statement of Barnes & Noble Education Inc, it seems that company is thinking out the frontier risks that can impact Retail (Specialty) industry. 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, Barnes & Noble Education Inc 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 Retail (Specialty) industry using digital technology.
High operating costs
– Compare to the competitors, Barnes & Noble Education Inc has high operating costs in the Retail (Specialty) industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Barnes & Noble Education Inc lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Barnes & Noble Education Inc is slow explore the new channels of communication. These new channels of communication can help Barnes & Noble Education Inc to provide better information regarding Retail (Specialty) products and services. It can also build an online community to further reach out to potential customers.
High cash cycle compare to competitors
Barnes & Noble Education Inc has a high cash cycle compare to other players in the Retail (Specialty) industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Employees’ less understanding of Barnes & Noble Education Inc strategy
– From the outside it seems that the employees of Barnes & Noble Education Inc 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.
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 Barnes & Noble Education Inc supply chain. Even after few cautionary changes, Barnes & Noble Education Inc is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Barnes & Noble Education Inc vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Barnes & Noble Education Inc has some of the most successful models in the Retail (Specialty) industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Barnes & Noble Education Inc should strive to include more intangible value offerings along with its core products and services.
Barnes & Noble Education Inc Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Barnes & Noble Education Inc are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Barnes & Noble Education Inc 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 Barnes & Noble Education Inc to hire the very best people irrespective of their geographical location.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Retail (Specialty) industry, but it has also influenced the consumer preferences. Barnes & Noble Education Inc can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Barnes & Noble Education Inc is facing challenges because of the dominance of functional experts in the organization. Barnes & Noble Education Inc can utilize new technology in the field of Retail (Specialty) industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Retail (Specialty) industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Barnes & Noble Education Inc 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. Barnes & Noble Education Inc 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.
Using analytics as competitive advantage
– Barnes & Noble Education Inc has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Retail (Specialty) sector. This continuous investment in analytics has enabled Barnes & Noble Education Inc to build a competitive advantage using analytics. The analytics driven competitive advantage can help Barnes & Noble Education Inc to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Barnes & Noble Education Inc 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.
Buying journey improvements
– Barnes & Noble Education Inc can improve the customer journey of consumers in the Retail (Specialty) industry by using analytics and artificial intelligence. It 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Barnes & Noble Education Inc can use these opportunities to build new business models that can help the communities that Barnes & Noble Education Inc operates in. Secondly it can use opportunities from government spending in Retail (Specialty) sector.
Building a culture of innovation
– managers at Barnes & Noble Education Inc 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 Retail (Specialty) industry.
Use of Bitcoin and other crypto currencies for transactions in Retail (Specialty) industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Barnes & Noble Education Inc in the Retail (Specialty) industry. Now Barnes & Noble Education Inc can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– Barnes & Noble Education Inc 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.
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. Barnes & Noble Education Inc can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– Barnes & Noble Education Inc can develop new processes and procedures in Retail (Specialty) 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.
Threats Barnes & Noble Education Inc External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Barnes & Noble Education Inc are -
Easy access to finance
– Easy access to finance in Retail (Specialty) industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Barnes & Noble Education Inc can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Barnes & Noble Education Inc 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Barnes & Noble Education Inc may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Retail (Specialty) sector.
Increasing wage structure of Barnes & Noble Education Inc
– 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 Barnes & Noble Education Inc.
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. Barnes & Noble Education Inc needs to understand the core reasons impacting the Retail (Specialty) industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Retail (Specialty) industry are lowering. It can presents Barnes & Noble Education Inc with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Retail (Specialty) sector.
Stagnating economy with rate increase
– Barnes & Noble Education Inc 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 Retail (Specialty) industry.
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 Barnes & Noble Education Inc business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Barnes & Noble Education Inc is facing in Retail (Specialty) sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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 Barnes & Noble Education Inc in the Retail (Specialty) sector and impact the bottomline of the organization.
Regulatory challenges
– Barnes & Noble Education Inc 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 Retail (Specialty) industry regulations.
Weighted SWOT Analysis of Barnes & Noble Education Inc Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Barnes & Noble Education Inc 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 Barnes & Noble Education Inc 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 Barnes & Noble Education Inc 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 Education Inc 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 Barnes & Noble Education Inc needs to make to build a sustainable competitive advantage.