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B&N Final

This is it. Don't get scared now.
by

Tim Auerhahn

on 25 January 2013

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Transcript of B&N Final

ValuCore Strategic Assessment and Final Recommendations for Barnes and Noble VISION Trend Drivers Impacting the Future of Barnes and Noble Probable Scenarios SWOT 1. Competitors
2. Technology
3. Economy/Recession
4. MNC Globalization
5. Pricing Structure
6. Social Responsibility
7. Strategic Partnerships 8. Generation Separation
9. Bricks vs. eCommerce
10. Shopper Experience
11. Spending Habits
12. Company Leadership
13. Transparency
14. Social Media
Generation Separation
Economy
Company Leadership Retail Marketplace Technological Initiatives Pricing Structure Financial Shift Low Risk Area Critical Area Probability Medium High Low High Medium Low Effect Probability Effects Social Responsibility Value Tech vs. High Priced Tech USA vs. Global eReader vs Multifunctional Devices Traditional Stores vs. Profit Centric Avenues Scenario Sign Posts & Descriptions

Despite the decline in traditional shopping experiences, Barnes & Noble, Inc. continues with business as usual-focusing on brick and mortar stores.

More creative marketing will be needed to draw generational appeal.

Barnes & Noble, Inc. will continue to focus their emphasis on book reading and continue providing traditional books and in traditional stores. In line with that goal, they will continue to provide devices for an electronic world to allow customers to read digital books.

Barnes and Noble, Inc. enters the international market, expanding its reach to more prospective customers; therefore, increasing the potential for more sales and higher profit margin. They will heavily invest in the most expansive avenue, with new brick and mortar stores. Their most recent history has shown these to not turn successful margins, and expanding with this avenue would be a great risk.

Barnes and Noble, Inc. will have more competitive-pricing options to meet the needs and budgets of varied customers. Scenario 8 – Conflicting Priorities Scenario Sign Posts & Descriptions

Recognizing traditional book selling is fading and increasingly less profitable, Barnes & Noble, Inc. will focus their resources on profit centric avenues, such as the Nook and Barnes & Noble College.

Barnes & Noble, Inc. will continue to focus their emphasis on book reading. They will continue to provide traditional books. They will provide devices for an electronic world to allow customers to read digital books. Multifunctional devices are already on the market, and exclusive book reading devices becoming less desirable in the market.

Barnes and Noble, Inc. enters the international market, expanding its reach to more prospective clients; therefore, increasing their sales and profit margin. The Nook and college bookstores are financially solvent.

Barnes and Noble, Inc. will have more competitive-pricing options to meet the needs and budgets of varied customers. Scenario 16 – E-Reader Revolution Scenario Sign Posts & Descriptions

Recognizing traditional book selling is fading and increasingly less profitable, Barnes & Noble, Inc. will focus their resources on profit centric avenues, such as the Nook and Barnes & Noble College.

To meet the growing trend towards increased technological use, Barnes & Noble, Inc. will expand the Nook line to include multi-functional devices, providing instant access to popular apps at a non-costly price.

Barnes and Noble, Inc. enters the international market, expanding its reach to more prospective clients; therefore, increasing their sales and profit margin.

Barnes and Noble, Inc. will have more competitive-pricing options to meet the needs and budgets of varied customers. Scenario 15 – Global Leader In Specialty Retail Scenario Sign Posts & Descriptions

Despite the decline in traditional shopping experiences, Barnes & Noble, Inc. continues with business as usual-focusing on brick and mortar stores.

More creative marketing will be needed to draw generational appeal.

Barnes & Noble, Inc. will continue to focus their emphasis on book reading and continue providing traditional books and in traditional stores. In line with that goal, they will continue to provide devices for an electronic world to allow customers to read digital books.

Despite a booming globalized society, Barnes & Noble, Inc. will continue to sell exclusively within the United States, and remain detached from the global opportunities. They will have to increase its marketing outreach to remain a vital bookseller.

Barnes and Noble is left with few options with minimum sensitivity to customers’ varied needs and budgets in a struggling economy. Scenario 5 – Borders On Extinction Trend Drivers Financial Shift Retail Marketplace Pricing Structure Technological Initiatives Traditional Stores Profit Centric Avenues US Based Sales Global Based Sales High Value High Tech High Price High Tech eReader Multifunctional Devices B&N continues to drive initiatives behind its brick and mortar retail locations. These traditional retail venues have consistently underperformed and as of late, have shown quarterly losses and negative profit margins. B&N begins to increase financial focus on profit-centric avenues including its successful college-based brick and mortar stores and high tech areas including the Nook and barnesandnoble.com. Despite critical disadvantages in recent marketing efforts, B&N places their focus on manufacturing high-priced tablets which will take the marketplace in direct competition with the iPad and premium Kindle devices. Determined to carve out a competitive niche, B&N invests in value-friendly consumer-ready tablets that offer a distinct price advantage when directly compared to high price alternatives. B&N continues a pattern of interest in the domestic marketplace. Comfort in routine keeps initiatives stateside while foreign marketplaces are largely ignored. Noticing preliminary trends in hot-spot retail markets, B&N proactively moves into the global arena, including retail friendly Asia. B&N rides a wave of advantage as ease of entry into these markets is aided by technology-based initiatives such as the Nook and internet retail where higher priced brick and mortar based businesses struggle to compete. Despite clear trend warnings B&N decides to cater to a reader-friendly demographic which is diminishing in size at a rapid pace. Tablets are structured simply as eReaders with less functionality than devices released by main competitors Apple Inc. and Amazon. Riding a wave of solid reviews on their most recent technological advances, B&N moves forward with their tablet design structure and focuses on positive consumer trends including multifunctional devices with adaptable platforms. Headway is made in closing the gap on competitors hardware flaws including the iPads lack of expandable storage space and refusal to include usb ports. Barnes and Noble, Inc. intends to be the worldwide leader in specialty retail. We demonstrate respect to our employees, who in turn deliver excellent service to our customers and community. Our products and educational programs provide consumers with enjoyment and satisfaction, and our shareholders find value in their investment, as well as confidence in a sustainable future for our company. "In a truly just America, all citizens have a responsibility to pursue the public good, including business people like me. . . .

What we ourselves accomplish is much less important than what we leave behind."

- Len Riggio Strengths Weaknesses Opportunities Threats Plan focuses on profit-centric avenues.

#1 bookseller in the US and voted best E-reader in the industry by Consumer Reports.

Reputable distributor of books, attracting major booksellers to its venues. Able to better leverage publishing deals.

Nook has similar multi-functional features to the iPad but at a lower cost.

Consumer incentives including free Wi Fi in stores, sharing technology, discounts for shopping at B&N, Starbucks in stores for convenience. Some technological problems still need to be resolved (Word documents are not supported in the lower priced Nooks, text-to-speech capabilities are limited).

Declining traffic in bookstores will still effect existing tangible retail locations.

Portions of current customer base are non-internet savvy. Limitless global sales possibilities and market share expansion.

Expanded sales opportunities through expansion to dual markets (eReader and tablets).

Value driven sales help profits to soar vs. competitors.

Online platform broadened and mastered.

Financial shift focuses on profit friendly college experience and Nook expansion.

Competitive pricing gives increase to brand loyalty. Decreasing success of traditional stores.

Global eSales markets include many competitors and a soft ease of entry.

Competitive product marketing exists in the tablet arena.
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