Diversification Strategies

STRAYER UNIVERSITY

MBA PROGRAM-HEALTH ADMINISTRATION CONCENTRATION

ASSIGNMENT 2: DIVERSIFICATION STRATEGIES
BARNES & NOBLE vs. AMAZON

STUDENT NAME: REGIS J. LLERENA
PROFESSOR’S NAME: DR. ELEANOR MARSCHKE
COURSE: BUS508- CONTEMPORARY BUSINESS
DATE: MAY 4th, 2012

1.-Compare and contrast the two businesses – core business, their size, financials, globalpresence, use of e-business (marketing, sales, etc)
Just an overview about books sales market in U.S.A. and the warfare to maintain the supremacy and competence with other rivals, but the final conclusion is that physical book sales have been flat for a decade and are starting to get eclipsed by e-books.
According to a recent report by the Association of American Publishers, sales of adult paper-backsand hardcovers fell 18 percent between 2010 and 2011. Americans owning at least one digital reading device in 2011 was 18% and in January 2012 rose to 29%. (Stone, Feb. 2012).
Store chains such as Borders have been cartwheeling into bankruptcy, and independent shops are struggling to compete with the advantages enjoyed by online retailers, such as their freedom from collecting sales tax in manystates. The lone bright spot is the rising sales of electronic books, but even that landscape is blighted. Fierce warfare for control of the new market, between Amazon.com, Apple, Google, and Barnes & Noble, threatens to turn minor combatants into accidental casualties. ( Stone, Feb. 2012)
Amazon now is competing with big publishing houses, they are competing on e-books containing innovativereading topics and impacting authors not available in Barnes & Noble’s Nook or Apple’s iBookstores. Also, Amazon is signing increasing contracts and agreements with authors, novelists and Colleges to publish e-books. Executives at the major publishing houses see all of this and conclude that Amazon aims to put them out of business. (Stone, 2012)
Amazon now sells 105 e-books for every 100printed ones. Apparently Amazon is interested not only on selling books but into the business of making them as well. In 2009, looks like begun a discord between Amazon and Apple just after Steve Jobs introduced the iPad; publishers were happy considering that the Kindle get some new competition and Apple offering to Publishers and authors willing to sell their titles on the iPad at affordable prices.(Fast Company article, 2012 )As a reaction a year later Amazon introduced AmazonCrossing division , an imprint to publish English-language translations of foreign-language books. At the same time Amazon announced an aggressive campaign to imprint mysteries, thrillers, romance, and science fiction. Immediately, the biggest publishers in the U.S. announced they would sell e-books using the Nook andApple’s iBookstore. As a consequence iPad started to gain market forcing Amazon to accept e-books market sharing. (Trends e-magazine, 2011) Unfortunately, Barnes & Noble’s Nook didn’t launch as expected. Finally Amazon introduced a determinant and final strategy resulting in a stop in their competitors. Amazon started to pays authors 45-50% of the selling price, a devastating tactic to attractall authors and novelist to the Amazon side. In contrast, usual Publishers usually get about half of the book’s retail price while retailers (as Barnes & Noble, Apple, etc) get 30%. And only 20% is provided to authors. (Fast Company article, 2012 ) The difference is extremely obvious; finally Amazon is almost dominating the market manufacturing and selling themselves books (paper ande-books).
Amazon.com, Inc. is an American multinational e- commerce company with headquarters in Seattle, Washington, United States. It is the world's largest online retailer. The company also produces consumer electronics - notably the Amazon Kindle e-book reader - and is a major provider of cloud computing services. (Amazon, official website)
Amazon has separate retail websites for many other...