Amazon vs. Barnes and Noble
Case Analysis Questions on Leadership Online (A): Barnes & Noble vs. Amazon.com Q1: Summarize Barnes & Noble’s business strategy and business model based in the case descriptions. How have these strategy and business model been evolved since the case was written? Ans. Barnes and Noble applied a combination of Economies of Scale and Vertical Integration and Monopoly as its Business Strategy in the 90s. They were the dominant sellers of books, CDs and Videos. Barnes and Noble acquired B. Dalton in 1986 the third largest book seller in America. After acquiring, the chain, B&N started converting its stores to Super stores. It also achieved some of its growth by cannibalizing the sales or growth of smaller mall-based stores.
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Q3: In your opinion, how well did Barnes & Noble counter the moves that Amazopn.com had made (up to when the case was written)? How about now? How is Barnes & Noble doing vis-à-vis Amazon.com? ANS. In my opinion Barnes and Noble’s counter moves were impressive; they started by announcing plans to become exclusive bookseller on AOL’s marketplace and then to launch their own website. B&N leveraged their brand-name and launched a multi-channel distribution strategy. Later it added book recommendation service to its website and it also offered deep discounts on books to meet Amazon’s low-cost challenge. B&N.com was organized as an entirely different company with a separate CEO to avoid paying taxes on online sales and to create a separate identity in order to attract different types of customers. Procurement was the activity that was tightly coupled across Barnes and Noble’s traditional and online businesses, most books were centrally purchased by company’s buyers. B&N’s virtual store front was graphically richer than Amazon’s; it offered customers 2.5 million titles and deep discounts off suggested retail price. In addition to selling books on its website, B&N.com offered a range of services, including book related information, to visitors. Many of these