Barnes and Noble - Analysis and Assessment of the Company's Environment and

Competitive Situation

GENERAL ENVIRONMENT ANALYSIS3

General Economic Conditions3

Demographic Factors3

Political-Legal Factors3

Socio-Cultural Factors4

Technological Factors4

Issues of Natural Environment4

Global Forces5

Summary of General Environmental Analysis5

COMPETITIVE ANALYSIS OF THE INDUSTRY5

Description and Dominant Economic Features of the Industry5

Driving Forces and Key Success Factors6

Industry Segments6

Competitors7

Competitors' Strengths and Weaknesses8

Competitors' Objectives, Strategic Intent, Strategies and Tactics8

Competitors' Likely Moves8

Competitors' Groups8

FIVE FORCES ANALYSIS9

Threat of New Entrants9

Bargaining Power of Buyers10

Bargaining Power of Suppliers10

Threat of Competitive Rivalry11

Threat of Substitutes11

Summary of Five Forces12

Barnes and Noble - Analysis and Assessment of the Company's Environment and

Competitive Situation

General Environment Analysis

General Economic Conditions

The United States recently emerged from the worst recession since the Great Depression. However, recessionary pressures still exist, and consumer confidence is still shaky, primarily because of the possibility of the United States going over the fiscal cliff in the recent future as the policymakers have failed to strike out a deal that could reassure the opposite. Furthermore, the European Sovereign Debt Crisis also threatens the global economic system, which is not in shape to take another blow. The unemployment rate within the United States is still not far below from 8 percent. All of the above-mentioned factors translate into a bleak economic condition, which would reduce the revenues as well as profits (Harrison & John, 2011).

Demographic Factors

People from the older demographic represent the biggest segment for the retail book industry; however, as this generation becomes inactive, book retailers will find it troublesome to appeal to the younger demographic. For example, people under the ages of 25 represent only slightly less 6 percent of the overall market of the book retail industry. Furthermore, as younger and adult customers from the technological age increase their spending power, they are more likely to prefer e-books to physical books (Ferrel & Hartline, 2010).

Political-Legal Factors

Political and legal factors have the ability reshape and revamp entire industries within a period of few months. However, in this case, the political and legal forces are mostly stable; thus, they do not present a concern for the industry players. However, as mentioned earlier that episode of US Fiscal Cliff is likely to increase Corporation and personal income taxes in the future, which would further dampen the sales and profitability of the industry.

Socio-Cultural Factors

As the world moves into an age of technology and gadgets, it is becoming a global trend for people to shift towards digital books, which currently represent slightly over 44 percent of the total book sales. The culture of reading physical books is declining quickly as the new generation finds it trendy to fulfill their reading needs with online books.

Technological Factors

Perhaps, the most crucial force affecting the retail book industry is the technological force, which has entirely redefined the dynamics of the book retail industry. With the advent of laptops, smart phones, tablets and others gadgets, many people, especially from the younger demographic prefer to read e-books rather than buying actual books from the stores (Ibis World, 2013).

Issues of Natural Environment

There is a niche market of readers, which is extremely ...