Amazon has entered international markets with sites in a number of other countri

Question

Amazon has entered international markets with sites in a number of other countries. The company believes that an aggressive international strategy is essential to its continued growth. Has Barnes & Noble take the same approach? Review B&N’s section on International: Delivery Time and Shipping Rates. Does it ship purchases to international buyers? Does it appear to have websites in other countries? What are some noticeable differences in their approaches? Which companies approach seems more effective? Why? List References

Explanation / Answer

The Barnes & Noble strategies to international trade are;

First, to rebuild the corporate governance issues; this includes addressing the mission statement which needs to be remodeled and also making necessary changes in B&N’s top managerial positions. The next is B&N’s correct the e-commerce program to serve better needs of the customers, including customer recommendations and an enhanced loyalty program. The next strategy is to partner with Android Operating Systems in creating an application for mobile phones that are preloaded onto the phone and allow customers to read books. The next strategy is to offer the first two to three chapters of a book online until the book is delivered to the client. The next strategy is to implement a universal code and policy to ensure that all B&N stores are functioning as a single unit. The next strategy is offering a GOOGLE Stop in selected stores. This serve people to use the services that Google currently offers and can place orders for items. The next strategy is sharing the warehouses with Google to reduce rent expenses and offer them to use the current facilities at a charge of 25%. The next strategy is to offer real estate on the website. This allow outside companies to promote their products on the website. The next strategies is to partner with Google in order to gain advantage of all of their resources, and to use Google’s connections to have an e-reading device created for B&N.

The major issue is a decrease in profit margins due to an increase in competition. This means that B&N is severely losing profits due to stiff competition from companies such as Amazon. Amazon has a tight stranglehold over the book industry. Amazon does this by lowering their profit margin on their products. This means, B&N have a profit margin of 12% on their products, whereas Amazon has a profit margin of 6%. This allows them to lower their prices on their products, or books. B&N is also dealing with spending their funds on brick and mortar outlets. This means that B&N is allocating its resources on individual stores instead of the company as a whole. This plan is not effective at all, and is extremely detrimental to the company. Their funds are draining extremely fast, and they will not be able to stay afloat for long. Another related issue is that there is a large decline in physical book sales. A large majority of people are transitioning to e-books instead of physical books. The reason is that they are cheaper, and much easier to acquire. If you need a book you can immediately download it to your computer or tablet for a very inexpensive cost. Another related issue is that B&N is lacking support activities. They lost financial control and technology development. B&N lost nearly one billion dollars in e-reading devices, which are completely irrelevant now. This was a major loss to the company. It’s extremely hard to bounce back from a billion dollar loss. They also have not allocated any funding into research and development for the past four years. This means that they are not staying innovative, or are creating new products for their company. Research and development is a huge part of all major companies. If a company is not innovative, they will not survive. As B&N implement the new strategy that recommended, they will have issues with getting different universities to use their products the way they intended them to. In order to keep selling to the universities, B&N will have to have as much control as possible with the usage of the new system offered to the schools. Another issue is to remain competitive with the Nexus tablets and the biggest issue is the competition with Amazon. Amazon is like the Walmart of the internet. B&N will need to compete by offering multi-products to remain competitive. Proposed Objectives In order to address the issues, objectives were created as; turn a profit within three years, by increasing sales by 10% year over the next three years. Within the next three years, B&N wants to advance into 10% more universities. Lower debt by 10% in the next three years Strategic Choices and Recommendations The team has created a plan with specific strategies that are essential for B&N to be successful. For this to created a multiple sound strategies; first to partner with Google to expand the digital market. Partnership could be a game changer versus Amazon. This will provide quick, cheap delivery services through Google Shopping. The next strategy is to partner with a Google company to develop a new type of e-reader. It must be an e-reader that works correctly, and is competitive with other similar devices. Also outsource manufacturing which will reduce the expenses, as well as risk. This strategy will take a large amount of investment. The next strategy would be to rebuild the corporate governance issues; this includes addressing the mission statement which needs to be remodeled and also making necessary changes in B&N’s top managerial positions. In order to develop a successful implementation of the recommended strategies B&N will address financial, internal, future, and customer perspectives, evaluated using a balanced growth. Promotional Strategy is to increase sales of B&N’s products outside of brick and mortar locations, the strategic alliance with Google and use of Google Shop will provide a more convenient method of shopping for customers. They will also be able to receive their products quickly and have access to the same large database of products our brick and mortar locations offer. Strategy on Implementation: Direct sales of B&N products via Google Shop & increased digital market presence Financial Increase digital presence and sales of B&N’s products through a strategic alliance with Google. Internal Ensure sales associates are trained well and maintain a strong online sales forces and as great customer care, all B&N sales/marketing associates on the proper use and maintenance of newly implemented technology. Future Increase overall sales by maintaining a successful online market for customers Customer -Increase awareness of B&N’s new and improved digital presence and online products offered through Google Shop -Create a more convenient shopping experience as well as fast shipping for customers.

The Amazone companies approach seems more effective. Because they can attain a large portion of customers around the world through their lowest product price.

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