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STR 581 Week 6 Strategic Plan Part 3






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STR 581 Strategic Plan Part 3
Strategic Plan Part 3
Strategic planning is a critical element of an organization’s annual
business plan. A strategic plan consists of a number of components. In
addition to analyzing a company’s strengths and weaknesses, a
strategic plan also includes implementation and control techniques.
While this may seem easy enough, implementing a strategic plan into an
organization can be challenging. Barnes and Noble, like a number of
corporations are seeking ways to improve productivity and profitability.
This essay will identify business alternatives for the bookseller which will
enable them to diversify their product offerings.
The development of a strategic plan consists of many steps. One
important step is identifying the best strategic alternatives. These
alternatives include value discipline, generic strategy, and grand
strategy. These three areas are especially important for Barnes and
Noble. In recent years, the bookseller has experienced a slide in market
share. While Barnes and Noble has been able to rebound over the past
year, the company must identify ways to remain competitive.
A generic strategy is very important for Barnes and Noble. A generic
strategy is a basic approach to strategic planning that can be adopted by
an organization in any industry to improve competitive advantage.
Generic strategy is composed of three elements, differentiation, focus
and low cost strategies. Differentiation strategy is the ideal strategy for
Barnes and Noble.
Over the past decade Barnes and Noble has faced stiff competition from
Amazon and other non-traditional retailers such as Walmart and Costco.
The bookseller must identify ways in which to set itself apart from
competitors. According to DataMonitor (2010)
Value pricing strategy adopted by Barnes & Noble is a key competitive
advantage in a market where the consumers are more price sensitive
than ever before. The company’s stores employ an aggressive

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nationwide discount pricing strategy. The current pricing is 30% off
publishers’ suggested retail prices for hardcover bestsellers and 20% off
select feature titles in departments such as children’s books and
computer books. Barnes & implemented an “everyday low
pricing” model that provides a single, low price for each item site-wide for
members and non-members and enables the company to offer better
value to its customers. (para. 10)
While value is a competitive advantage for Barnes and Noble’s retention
of market share, their prices are not low enough to impose a low cost
Differentiation strategy is generally reserved for companies with a clear
competitive advantage. Companies such as Mercedes and Apple
employ this strategy. Differentiation strategy is demonstrated when a
company provides value to customers through unique unique features
and characteristics of a company's products rather than by the lowest
price (Open Learning World 2010).
Employing a differentiation strategy at Barnes and Noble is applicable for
a few reasons. Currently, Amazon and other non-traditional retailers
have lower prices on books, music and movies than Barnes and Noble.
It would not make sense for Barnes and Noble to use a low cost strategy
model considering the overhead costs that they have. However, Barnes
and Noble does have strong brand identity that places them in a leader
position in the book selling market.
Barnes and Noble must capitalize on their strong brand identity. While,
Amazon offers lower prices customers cannot get the same shopping
experience purchasing books online as opposed to shopping in an
actual Barnes and Noble store. Furthermore, Barnes and Noble has also
added Starbuck kiosks in many of their locations. This also adds to the
shopping experience as readers are able to combine a coffee shop
experience with a library feel. Barnes and Noble must use this strategy
to cater to consumers who long for this type of experience. There is
currently no other bookseller that has these type of options when
A differentiation strategy at Barnes and Noble will allow the company to
employ the customer intimacy value discipline. Customer intimacy is a
marketing strategy where a supplier or product retailer gets close to their
clients. This method usually leads to a higher level of customer loyalty.

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Barnes and Noble has a strong rewards program in which they offer
benefits to members. Members receive additional discounts by being a
member. Barnes and Noble should use the information from rewards
members to increase the level of customer intimacy. Barnes and Noble
can use recent purchases to suggest further purchases, send out
information on upcoming sales, etc.
Differentiation and customer intimacy should be combined with a
concentration grand strategy at Barnes and Noble. A concentrated grand
strategy means that a company focuses on a slim product line and
improves quality of that product. While, Barnes and Noble cannot
improve the quality of books, the bookseller can focus on their e-reader
Concentration is the best grand strategy for Barnes and Noble for a few
reasons. Again, Barnes and Noble has strong brand identity. The
bookseller is considered a leader in the industry. Barnes and Noble
should capitalize on this when marketing their Nook. Barnes and Noble
should increase efforts and resources to the development of the Nook in
an effort to reduce market share of rival Amazon’s e-reader Kindle.
Barnes and Noble can do the same with the Apple iPad. While, Apple is
a leader in technology they are not a leader in books and do not have
the extensive library that Barnes and Noble has.
Barnes and Noble should also focus their efforts on the university
market. Barnes and Noble currently has a strategic alliance with a
number of universities but they should increase their efforts to make up
for the losses they face from Amazon’s low prices. This is another area
where Barnes and Noble’s strong brand identity will benefit them.
Established universities would be more likely to enter into a partnership
with Barnes and Noble since they are a trusted company.
Barnes and Noble is a leader in the book industry. However, in recent
years the company has watched as their market share declined due to
the entry of new competitors. Barnes and Noble must seek alternatives
in order to remain successful. The three long term planning methods
listed in this essay will help ensure that the bookseller maximizes

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