Five Forces Analysis
Porter Five Forces is a strategic framework that factors the competition in the industry for Barnes & Noble. These five forces focus on how Barnes & Noble can build a sustainable competitive advantage in the retail book and e-book industry. When analyzing these five forces, Barnes & Noble must focus on their strengths and weaknesses and try to innovate ways to provide books to their consumers.
Competitive Rivalry
When it comes to competitors, you may not think Barnes & Noble has many considering it is the largest book retailer; however, in reality, it has numerous due to substitution. Competitive rivalry is very intense between Barnes & Noble and other competitors such as Amazon, Apple, eBay, Google and other brick and …show more content…
The fact that the consumers are unable to negotiate prices in the store means that they will do more research on other options and look elsewhere, such as Amazon, to purchase a book. Consumers usually prefer to purchase online if it means a cheaper price because it is the more rational choice. For example, college students are more willing to purchase a used or paperback textbook because the books are cheaper and only needed for a limited time. Whether it’s in store or online, buyers have many options to consider when purchasing a …show more content…
The government has price regulations and laws set in place like the Sherman Antitrust Act to prevent the raising of prices in the case of monopolies, trade etc. In 2012, there was a lawsuit that occurred between Apple and the United States in which Apple, as well as five publishing houses, “conspired” to raise the price of e-books (Olivarez-Giles, 2016). The result of this case caused Apple and Barnes & Noble to refund what consumers may have overspent during the time frame in which e-book prices rose. Based on U.S Securities and Exchange Commission data, we can see the direct impact on the company declined profits and market share from 2012-2016 fiscal years (“Selected Consolidated Data 2016”). There was an overall decrease in sales from 2015 to 2016 when the refunds were issued from $4,297,108,000 to $4,163,844,000 (“Selected Consolidated Data 2016”). Overall, the company has proven to respond accordingly to its political impacts, and if they continue to do so they will remain
Porter Five Forces is a strategic framework that factors the competition in the industry for Barnes & Noble. These five forces focus on how Barnes & Noble can build a sustainable competitive advantage in the retail book and e-book industry. When analyzing these five forces, Barnes & Noble must focus on their strengths and weaknesses and try to innovate ways to provide books to their consumers.
Competitive Rivalry
When it comes to competitors, you may not think Barnes & Noble has many considering it is the largest book retailer; however, in reality, it has numerous due to substitution. Competitive rivalry is very intense between Barnes & Noble and other competitors such as Amazon, Apple, eBay, Google and other brick and …show more content…
The fact that the consumers are unable to negotiate prices in the store means that they will do more research on other options and look elsewhere, such as Amazon, to purchase a book. Consumers usually prefer to purchase online if it means a cheaper price because it is the more rational choice. For example, college students are more willing to purchase a used or paperback textbook because the books are cheaper and only needed for a limited time. Whether it’s in store or online, buyers have many options to consider when purchasing a …show more content…
The government has price regulations and laws set in place like the Sherman Antitrust Act to prevent the raising of prices in the case of monopolies, trade etc. In 2012, there was a lawsuit that occurred between Apple and the United States in which Apple, as well as five publishing houses, “conspired” to raise the price of e-books (Olivarez-Giles, 2016). The result of this case caused Apple and Barnes & Noble to refund what consumers may have overspent during the time frame in which e-book prices rose. Based on U.S Securities and Exchange Commission data, we can see the direct impact on the company declined profits and market share from 2012-2016 fiscal years (“Selected Consolidated Data 2016”). There was an overall decrease in sales from 2015 to 2016 when the refunds were issued from $4,297,108,000 to $4,163,844,000 (“Selected Consolidated Data 2016”). Overall, the company has proven to respond accordingly to its political impacts, and if they continue to do so they will remain