Strategy for Barnes & Noble Case Study

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A. According to the Grand Strategy Matrix the position of Barnes & Noble in the Matrix is in the Second Quadrant, which is a weak market position and strong market growth strategies. The optimal strategy or a blend of strategies for Barnes & Noble is that it must develop its website as well as using market penetration strategies. In 2007 Barnes & Noble was facing increasing competition in the retail industry, especially in the book industry. The increasing competition was from two directions. First, there was strong competition from discount stores such as Wal-Mart, Costco, and Target. Second, there was strong competition online from Amazon. The first source of competition is discount stores. These stores have an advantage because they attract customers based on low prices. In contrast, Barnes & Noble is a specialized bookseller that provides not only a wide selection of books but also books targeted at the specialized segment. The second challenge to Barnes & Noble was from Amazon. Amazon also offered a variety of books and priced them at the lowest price. However, Amazon wan an online-only company. Barnes & Noble offered the brick-and-mortar store experience to customers. The customers could sit, read, and experience the book before they made the decision to buy a book. From this perspective, the large number of Barnes & Noble brick-and-mortar stores helped the company differentiate its offerings.

The Grand Strategy Matrix has two dimensions namely the organization's competitive position and the market growth. From the statements of CEO Steve Riggio, it is clear that even though the competitive position of Barnes & Noble can improve if there is a high-selling book such as that Harry Potter. At the same time, Riggio is apprehensive that the US economy may enter a recession and the impact of the recession on the market position of Barnes & Noble is uncertain. The current market growth is strong and is responsible for the better than expected performance of Barnes & Noble during the year 2007. According to Steve Riggio, there were several challenges that Barnes & Noble was facing. During the festive season, Riggio was apprehensive that the customers of Barnes & Noble may make purchases from Amazon. He was also apprehensive that facing recession customers of Barnes & Noble may strive to control costs by making purchases from Costco or Target. Because of these observations of Riggio and the performance of Barnes & Noble in 2007 we conclude that currently Barnes & Noble is facing a situation with rapid market growth but has a weak competitive position (a). This places Barnes & Noble in the second quadrant of the Grand Strategy Matrix. This is a situation in which Barnes & Noble is facing a relatively weak competitive situation as a business, at the same time there are plenty of ...