Amazon vs. Barnes & Noble Essay

The qualitative services incision was hired to provide an in depth analysis of two leaders in their industry, Barnes & stately and amazon. The spirit of this report is to provide all the necessary data in an unbiased manner, so that the accounting partners whitethorn make their investment decision knowing all the facts and figures about both companies.Our report was developed as a result of conducting independent and group research about each conjunctions background, competitors, philosophical differences in management, achievement stories, challenges (past and future), strategic moves, as well as chance on comparative statistics. Our research was compiled use a variety of online sources. The analysis of these key areas will provide greater hearing as to which follow to invest in, Barnes & nobleman or amazon.com.BackgroundBarnes & baronial was founded in 1893 in Wheaton, IL as a printing occupation but has developed into the largest book retailer in the United States t o sidereal day. Headquartered in sassy York, Barnes & terrific has 675 stores worldwide and partners with 686 collegiate bookshops. It is traded on the New York Stock Exchange and employs more than 30,000 employees. Barnes & dreadful has a meaningful 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. virago was founded initially as an online bookstore but soon into seemingly every member of consumer goods. Amazon is heavily involved in the Internet as an online retailer and producer of various applications connect to its tablet harvestings. Amazon does a signifi after partt amount of business in books, both online and print, but differs from otherwise book retailers in that it is a selling weapons platform for seemingly anything you could think to purchase on the I nternet. belligerent StrategyBarnes & Noble has a signifi great dealt competitive advantage over Amazon and a follow of other book retailers in that they bewilder a physical location. While 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 plush couches and chairs. In addition, Barnes & Noble often has cafes in their store locations. The culture is to keep customers in store as long as possible, even if they spend near of the day reading a magazine or a book, to ensure that they are making some harming of purchase. The store locations serve a two-fold purpose they act as a physical showcase for books that can be purchased online and hand 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 textbo oks that is deflected to students, and when students sell books back to colleges, it is at a greatly reduced price. Books repurchased by Barnes & Noble are repackaged and resold for a price greater than cost. Barnes & Noble is execute apart from rival in this regard because no other retailer has a similarly grammatical construction partnership.The simple model that Amazon operates under is its key to success. Amazon uses little more than a sodding(a) 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 global scale, allowing them to mitigate high-priced shipping costs. This online platform alike means increased transferability to mobile devices, meaning they can offer the same services through with(predicate) application stores and exchanges.Amazons Kindle product line is a competitive advantage because it was stolon to market for handheld book readers. Since releasing the first Kindle, Amazon has only increased the Kindles capabilities to match that of the iPad, Nook, and Galaxy tablets.Amazons distribution process is a work of art. Amazon has been works veryhard to revolutionize the distribution process, from creating futuristic technology to developing basic processes that would increase efficiency of distribution points. 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 depend of the warehouse, while dozens of other machines are operating simultaneously. Amazons extensive distribution web is far 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 o nline realm. Amazons chief business model is Internet commerce, but Barnes & Noble is miserable towards this realm of commerce with the creation of the Nook. Both companies see business via handheld tablets becoming more prevalent, apparent 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 bod 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 second base 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. Both companies understan d the profit potential of the industry and are taking steps to capitalize on profit opportunities.Company Success StoriesBoth Barnes & Noble and Amazon.com call for go through great success 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 advertise on television, as well as the first bookstore to discount 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 known for their Starbucks cafes, where people often sit and relax with a cup of coffee or a snack. Undoubtedly, Barnes & Nobles greatest success comes from the nook, their electronic book reader, introduced in November 2009. The NOOKs biggest competition for the tablet market comes from the Amazon Kindle Fire, and Apples iBooks for iPhone, iPad and i Touch.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 undermentioned countries United States, Canada, United Kingdom, France, Germany, Italy, Spain, Japan, and China, with international 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 patriarchal membership is very frequent and for an annual fee, a user can join, which entitles them to dispense with two-day shipping on eligible purchases. Amazon Prime also provides Amazon Instant Video and access to the Kindle Owners Lending Library. Amazons greatest success to date is the introduction of its e-reader, Kindle, in November 2007 and the Kindle Fire in family line 2011. Since 2007, Amazon has released multiple versions of the Kindle e-reader and two versio ns 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 collapse 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 honest 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 develop a tablet with color, a built in light, Internet searching and application capabilities. Its newest tablet comes in high definition. While the NOOK looks more appealing 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 still has competition with other e-commerce sites like e-Bay. EBay allows several(prenominal) sellers to auction essentially anything they want for a fee. Amazon has limitations on what individual sellers can sell collectible to competition with other retailer partnerships with Amazon. However, according to a recent Forrester report, 30 percent of all online shoppers drop dead at Amazon to research products as opposed to Google or eBay (Savitz, 2012). Another competitor Amazon faces is Apple. The super coveted Apple iPad is in fierce competition with Amazons Kindle. While the iPad is more ex pensive than the Kindle, Apple fans might point out that the iPad has far more tablet-optimized apps, selections 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 challengesAny company trying to survive in todays economy will undoubtedly face challenges. The key to success lays in predicting these challenges and implementing strategies to overcome 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 Direct 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 even available on the NOOK (McIlroy, 2012). If Barnes & Noble wants to compete 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 somber 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 logical to expand the consider of locations where this product can be purchased. However, it still dust unclear as to when and if Barnes & Noble plans to expand to international markets.One challenge that Amazon could face whitethorn 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 oversee every single product that is sold under the Amazon.com brand. In order to prevent future lawsuits it is cr itical that Amazon.com employs a highly skilled legal team, and closely monitors its sellers and their products.RecommendationWe have found that Barnes & Noble and Amazon may appear to rivals but this appearance is only visible on the surface. With further examination of the facts, it is sheer 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 pass a leading role in the future of industry. Amazon has the capital to sell its products cheaper t han 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 real 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 Hidden Weak Spot Lack Of Loc al Leverage. Retrieved from http//www.forbes.com/sites/ciocentral/2012/10/29/amazons-hidden-weak-spot-lack-of-local-leverage