Amazon vs. Barnes & Noble Essay

The qualitative serve department was hired to volunteer an in depth analysis of two leaders in their industry, Barnes & frightful and virago. The purpose of this report is to provide all the necessary data in an unbiased manner, so that the accounting partners may make their coronation ending knowing all the facts and figures about both companies.Our report was developed as a result of conducting independent and group research about distributively partys background, competitors, philosophical differences in management, conquest stories, take exceptions (past and future), strategic moves, as well as key comparative statistics. Our research was compiled using a build of online sources. The analysis of these key areas willing provide greater catch as to which company to invest in, Barnes & terrific or virago.com.BackgroundBarnes & dire was founded in 1893 in Wheaton, IL as a printing problem but has developed into the largest book retailer in the unify States today. Hea dquartered in spic-and-span York, Barnes & horrible has 675 stores initiationwide and partners with 686 collegiate bookstores. It is traded on the New York post Exchange and employs more(prenominal) than 30,000 employees. Barnes & distinguished has a fundamental presence in the United States as a physical retailer of books and magazines.virago was founded in 1994 and is headquartered in Seattle, Washington. It is traded on the NASDAQ, and as a strong historical performer, is a component of the NASDAW 100 and the S&P 500. amazon was founded initially as an online bookstore but soon into seemingly any segment of consumer goods. amazon is heavily involved in the Internet as an online retailer and manufacturer of various occupations linked to its tablet products. virago does a significant standard of business in books, both online and print, but differs from other book retailers in that it is a alloting platform for seemingly anything you could think to purchase on the I nternet.Competitive StrategyBarnes & terrible has a significant competitive wages over virago and a number of other book retailers in that they arouse a physical location. small-arm online shopping is a significant competitive force, it is very difficult to beat a physical store. Barnes & Noble goes to great lengths to ensure that their customers are comfortable in their stores, outfitting them with overgenerous couches and chairs. In addition, Barnes & Noble often has cafes in their store locations. The goal is to affirm customers in store as long as possible, even if they cash in ones chips most of the day reading a magazine or a book, to ensure that they are making some kind of purchase. The store locations behave a two-fold purpose they act as a physical guinea pig for books that can be purchased online and have environment that fosters community.The college textbook business is a very profitable segment of Barnes & Nobles business. There is a great degree of markup on college textbooks that is deflected to students, and when students sell books back to colleges, it is at a greatly reduced scathe. Books repurchased by Barnes & Noble are repackaged and resold for a price greater than cost. Barnes & Noble is set apart from competition in this learn because no other retailer has a akinly structure partnership.The frank model that virago operates under is its key to victory. amazon uses little more than a bare bones online platform to sell its products meaning a minimal cost structure. At the same time, this business model requires no asset investment in physical store locations. Through an online platform, Amazon can offer products from a variety of sellers on a worldwide scale, allowing them to mitigate expensive shipping costs. This online platform too means change magnitude transferability to mobile devices, meaning they can offer the same services by application stores and exchanges.Amazons wake product line is a competitive advantage because it was first to grocery store for handheld book readers. Since let go the first Kindle, Amazon has only increased the Kindles capabilities to accommo discover that of the iPad, Nook, and Galaxy tablets.Amazons distribution process is a gain of art. Amazon has been working veryhard to revolutionize the distribution process, from creating futuristic technology to developing basic processes that would increase efficiency of distribution gestates. Currently, Amazons distribution channels are almost entirely automated. When a product is ordered, a robot processes the order and searches out the product on the warehouse shelves. The robot packages the product and returns it to the front of the warehouse, while dozens of other machines are operating simultaneously. Amazons extensive distribution web is removed superior to any other competitors.Vision for the FutureIts clear that both companies understand the importance of e-commerce and accessibility to consumer goods on the online acres. Amazons political boss business model is Internet commerce, but Barnes & Noble is moving towards this realm of commerce with the creation of the Nook. both(prenominal) companies see business via handheld tablets comme il faut more prevalent, evident in the ever-increasing capabilities of the Nook (B&N) and Kindle Fire (Amazon). Barnes & Noble has beefed up their online presence while reducing their number of stores as well. Amazons vision of the future has more to do with distribution than anything else. Amazon is doing everything in their power to create a shopping experience similar to going to an actual store including the instant gratification of receiving your purchased goods right as your purchase them. Amazon is moving towards an incredibly automated distribution channel that will reduce time to consumer through revolutionary technology. One of these technologies is drones that will fly purchased goods to a consumers home and drops them on the front step. Bo th companies understand the profit potential of the industry and are taking step to capitalize on profit opportunities.Company Success StoriesBoth Barnes & Noble and Amazon.com have experienced great advantage in their years in business. Barnes & Noble originated in 1873 and opened its first bookstore in New York City in 1917. In the 1970s they became the first bookstore to announce on television, as well as the first bookstore to entailment New York Times bestsellers at 40% off. From 1992 through 2003, Barnes & Noble released a series of classics for adults and children underthe imprint Barnes & Noble Classics Collection. Barnes & Noble stores are also kn give for their Starbucks cafes, where sight often sit and relax with a form of coffee or a snack. Undoubtedly, Barnes & Nobles greatest success cuts from the corner, their electronic book reader, introduced in November 2009. The NOOKs biggest competition for the tablet market comes from the Amazon Kindle Fire, and Apples iB ooks for iPhone, iPad and iTouch.Although only in business 17 years, Amazon.com has experienced great success and is now the worlds largest retailer. Amazon has separate retail websites for the following countries United States, Canada, United Kingdom, France, Germany, Italy, Spain, Japan, and China, with foreign shipping to certain other countries for some of its products. Amazon.com sells a variety of retail goods online including books, jewelry, baby items, tools, software, toys, and is a huge third party reseller. Amazon autochthonic membership is very popular and for an annual fee, a user can join, which entitles them to part with two-day shipping on eligible purchases. Amazon Prime also provides Amazon Instant Video and access to the Kindle proprietors Lending Library. Amazons greatest success to date is the introduction of its e-reader, Kindle, in November 2007 and the Kindle Fire in September 2011. Since 2007, Amazon has released multiple versions of the Kindle e-reader and two versions of the Kindle Fire. Its biggest competitors in the tablet market are the Barnes & Noble NOOK and the Apple iPad being used in conjunction with the Kindle app.Past ChallengesThe challenges that these two companies have faced, and continue to face, are the digital landscape and competition. Barnes & Noble became the last hope for bookstores after the join of Borders. Barnes & Noble is now the last major bookstore chain standing. The company is in constant competition with e-commerce sites, e-readers and tablets. It is safe to say that Barnes & Nobles primary competitor is Amazon. Barnes & Noble began to utilize their website, offering more titles and including free shipping for members. After Amazon launched its tablet, the Kindle, Barnes & Noble was forced to step up in the digital landscape. It created the NOOK and the NOOK Bookstore. Several generations later, the NOOK has come a long way in itsevolution. Now it has become a tablet with color, a built in light, In ternet searching and application capabilities. Its newest tablet comes in high definition. While the NOOK looks more kindly than it did in previous years, one thing stands in its way of success, which is price. Amazons Kindle, is priced anywhere from $69-$100 cheaper than the NOOK.This is not to say Amazon doesnt have its challenges either. Amazon has made a name for itself globally, however it quench has competition with other e-commerce sites like e-Bay. EBay allows individual sellers to auction essentially anything they regard for a fee. Amazon has limitations on what individual sellers can sell cod to competition with other retailer partnerships with Amazon. However, according to a recent Forrester report, 30 percent of all online shoppers start at Amazon to research products as opposed to Google or eBay (Savitz, 2012). Another competitor Amazon faces is Apple. The highly envy Apple iPad is in fierce competition with Amazons Kindle. While the iPad is more expensive than the Kindle, Apple fans might point out that the iPad has far more tablet-optimized apps, options for 4GLTE connectivity, and is the thinner and lighter device of the two. However, Amazons Kindle is a cheaper alternative for those who cannot afford an iPad or even the NOOK.Future challenges all company trying to survive in todays economy will undoubtedly face challenges. The key to success lays in predicting these challenges and implementing strategies to pass them. The places where Amazon finds opportunity seem to be the same places where Barnes & Noble faces challenges.Firstly, Amazon continues to make it very attractive for authors to self-publish their titles with their publishing services including, the Kindle come out Publishing option for online books, and the CreateSpace option for print books. Barnes & Noble does offer its own self-publishing service, PubIt, but its services are only offered for e-books, not print. In fact, 28% of the top-selling titles on Kindle are not eve n available on the NOOK (McIlroy, 2012). If Barnes & Noble wants to cope it will have to expandits self-publishing services and offer better incentives to authors. Another challenge that Barnes & Noble faces is its lack of an international presence. The fact that Amazon operates in so many countries worldwide is a serious challenge for Barnes & Noble.The Kindle is available internationally, but the NOOK is not. The NOOK is one of Barnes & Nobles most successful products. Therefore, it would seem licit to expand the number of locations where this product can be purchased. However, it still remain unclear as to when and if Barnes & Noble plans to expand to international markets.One challenge that Amazon could face may be the law. Since it allows an unlimited number of people to sell on the site, from all over the world, it is difficult to monitor every single product that is sold under the Amazon.com brand. In order to preclude future lawsuits it is crucial that Amazon.com employs a highly skilled legal team, and close monitors its sellers and their products.RecommendationWe have found that Barnes & Noble and Amazon may search to rivals but this appearance is only visible on the surface. With further test of the facts, it is evident that one company is far more successful than the other. We have concluded that Amazon.com is that company. These are the main factors that have contributed to our conclusions Amazon has more appealing future growth with the implementation of drone shipping. Amazons success of the Kindle compared to Barnes & Nobles NOOK. Amazon sells internationally. Barnes & Noble only operates in the US. Amazon allows an unlimited number of sellers to do business on its site. Barnes & Noble restricts its number of sellers to 200. Amazon.com is more attractive and rewarding for self-publishing which is set to play a leading role in the future of industry. Amazon has the capital to sell its products cheaper than Barnes & Noble. Therefore, with the evidence provided in this report, we have determined that the most secure investment opportunity of these two companies is Amazon.com. Based on current performance, and the opportunities for future success that were outlined in this report, it is now clear that Barnes & Noble simply cannot compete withAmazon.coms current success and future potential.Works CitedAmazon.com. (2011, October). Retrieved fromhttp//phx.corporate-ir.net/phoenix.zhtml?c=176060&p=irol-mediaKitBarnes and noble booksellers. (2011). Retrieved from http//www.barnesandnobleinc.com/for_investors/for_investors.htmlbarnesandnobleinc.com . (2012). Retrieved from http//www.barnesandnobleinc.com/our_company/our_company.htmlMcIlroy, Thad, (2012), Four Disadvantages for Barnes & Noble in the Bookseller Wars Retrieved from http//www.digitalbookworld.com/2012/four-disadvantages-for-barnes-noble-in-the-bookseller-wars/Savitz, Eric. (2012, October 29). Amazons concealed Weak Spot Lack Of Local Leverage. Retrieved from ht tp//www.forbes.com/sites/ciocentral/2012/10/29/amazons-hidden-weak-spot-lack-of-local-leverage