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Critical Analysis

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Running head: CRITICAL ANALYSIS 1
Critical Analysis
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CRITICAL ANALYSIS 2
Critical Analysis
Background
The operations of an organization are always influenced by the macroenvironment along
with the environmental factors. Starting with the microenvironmental factors, it is apparent that
over the years, Barnes & Noble has been experiencing a shrinking revenue and this has been
because of the rising competition that saw other companies become bankrupt. To confirm this, in
2017, the cumulative revenue dropped from $4.2 billion in the fiscal year 2016 to $3.9 billion.
(Smith, Rupp, & Offodile, 2017). This suggests that the revenue of the company has been
depreciating annually that predisposes the company to bankruptcy. Looking at the
macroenvironment, Barnes & Noble has experienced following serious competition from
Amazon.com (Smith, Rupp, & Offodile, 2017). Unlike Barnes & Noble Company, other retailers
one of them being Toys R Us suffered the slew retail bankruptcies along with the rising
competition that then contributed to its inexistence. All the same, Barnes & Noble survived the
big shakeout regardless of being among the first companies were interrupted by Amazon. The
debt in the company is also increasing wherein the previous year, and the debt rose from $60
million to $129 million in the current year.
Problem
Barnes & Noble is a company that has been exposed to various constraints that have
affected its operations and some of them include not to mention Amazon takeover, technology,
as well as the ever-decreasing revenue.
Alternative Solutions
As a way of managing the constraints mentioned above, it would be advisable for the
company to do away with e-commerce. The reason behind is that it was difficult for the company
to compete for online sales. Ecommerce has affected sales in Barnes & Noble in the sense that it
has seen the company losing sales to giant competitor companies that capitalize their efforts on
ecommerce and one of these companies entails Amazon. People gain access to the company
stores that later prompts them to make online purchases from the company. The company has
also been able to sell its products through eCommerce. Nevertheless, engaging in ecommerce
does not seem to be an appealing decision as the struggle of the company in the ecommerce has
posed to be a potential barrier to profitability (Cao, 2019). Certainly, this is a part of the business
that should be addressed. The reason behind is that the outcomes based on the eCommerce have
been unsatisfactory because online business has not been fruitful to the company as it does not
pay dividend for the company.
Secondly, the profit margin of the company has been decreasing annually, and this can be
attested by looking at the revenue it generated since 2015. Certainly, this has been because the
company has been losing its market to Amazon which happens to be its giant competitor in the
industry. Consequently, the profit enjoyed by the company has been falling over the years. As a
way of responding to this concern, it would be advisable for the company to realize that it can
use its stores as a primary asset. Unlike Amazon, Barnes & Noble is marked with stores this
presents its employees to engage the customers directly (Athey & Luca, 2019). Certainly, the
stores can present the employees with the opportunity of utilizing the bookstores to market its
online books to the consumers. Subsequently, it will be possible for the company to reach out to
different customers and so, earn a competitive advantage over Amazon.
The company has also experienced an issue regarding decrease in the number of physical
books. This has been because of the efforts of technology to introduce the eReader along with
the eBook that allows the readers to download the books over the internet. Again, the

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Running head: CRITICAL ANALYSIS Critical Analysis Student’s Name University Course Instructor’s Name Date of Submission 1 CRITICAL ANALYSIS 2 Critical Analysis Background The operations of an organization are always influenced by the macroenvironment along with the environmental factors. Starting with the microenvironmental factors, it is apparent that over the years, Barnes & Noble has been experiencing a shrinking revenue and this has been because of the rising competition that saw other companies become bankrupt. To confirm this, in 2017, the cumulative revenue dropped from $4.2 billion in the fiscal year 2016 to $3.9 billion. (Smith, Rupp, & Offodile, 2017). This suggests that the revenue of the company has been depreciating annually that predisposes the company to bankruptcy. Looking at the macroenvironment, Barnes & Noble has experienced following serious competition from Amazon.com (Smith, Rupp, & Offodile, 2017). Unlike Barnes & Noble Company, other retailers one of them being Toys R Us suffered the slew retail bankruptcies along with the rising competition that then contributed to its inexistence. All the same, Barnes & Noble survived the big shakeout regardless ...
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