1971- ironically this is the same year the Guttenberg Project began – to ultimately bring e-readers to the public. It was the first source of online books.Inventory system gave them competitive advantage into the 1990s.By 1995- bought and sold by Kmart.
2001 Amazon.com:re-launch Borders' money-losing e-commerce site, featuring Amazon.com's books and music offerings.2001: B&N sparknotes.com, study aide site.
Extensive real estate footprint, More than 500 super stores, Annual rent $562 million = equal to about one-fifth of total revenue.
Borders Presentation (Ot & D)
A World Without Borders?Reinventing Borders Group, Inc. (BGP)<br />Brittany Anthony<br />Anthony Harding<br />Stephen McKinley<br />Gabrielle Snyder Marlow<br />Relax, kick off your shoes, & READ<br />
Outline<br />Mission Statement/Vision <br />Out with the old, in with the new.<br />Brief History<br />Missed opportunities – Too Little, Too Late.<br />How is Borders currently structured?<br />Organization<br />Management<br />Restructuring Plan<br />The possibilities of a new structure:<br />Intimate Atmosphere – more virtual space, less square footage<br />Kobo- create your own electronic reader/notebook<br />Borders on Campus – back to our roots<br />
BGP Mission: Old & New <br />Mission - To be the best-loved provider of books, music, movies, other entertainment, informational products, services. World leader in selection, service, innovation, ambiance, community involvement, and shareholder value. <br />Mission - To be the most sought after provider of in-demand books, music, movies, and other entertainment and informational products and services in the most innovative formats. <br /> has something for everyone!<br />
History<br />1971: Tom and Louis Borders open Borders Book Shop, a used bookstore in the academic community of Ann Arbor, MI. <br />Developed state-of-the-art inventory tracking software.<br />1995: Borders’ 21 stores merged with Waldenbooks; renamed Borders Group, Inc. Went public through IPO.<br />1997: Announces plans to expand from 203 to 1000 stores.<br />2008: Barnes & Noble rules out bid to acquire Borders. <br />
A Step Behind<br />Too Little…<br />1998: Borders Online<br />2001: Deal with Amazon.com<br />2003: With Wi-Fi HotSpot available.<br />2008: Borders.com<br />2008: Concept stores - MP3 players, digital photo frames, and the Sony Reader<br />2009: Launches free Wi-Fi<br />2010: Partners with Kobo to deliver eBooks.<br />2010: e-Bookstore <br />Too Late…<br />1995: Amazon.com<br />1997: B&N.com<br />2001: B&N sparknotes.com<br />2005: Amazon starts self-publishing <br />2007: Amazon e-reader Kindle<br />2008: Amazon online textbooks<br />2009: B&N e-Bookstore<br />2009: B&N online textbooks<br />2009: B&N e-reader Nook<br />2010: B&N starts self-publishing <br />
A History of Missed Opportunities…<br />Disregard for innovative technology.<br />In 2011 Amazon.com announced that its e-book sales now exceed all of its printed book sales.<br />Virtual world is the new reality.<br />
…and Overconfidence<br />Excessively rapid expansion: Too fast in too many countries. <br />There was no real basis for continued growth, and yet Borders continued opening stores.<br />Last profit was 2006.<br />2008, Borders opened 14 concept stores nationwide.<br />
What can we do?<br />Maintain our non-corporate feel and stay in touch with the communities we serve.<br />Find a smarter more efficient way of doing things.<br />Tune in to the growth of the virtual environment.<br />
Gap Analysis<br />As Is<br />Failure to adequately address the internet sales channel and the subsequent e-book market<br />Over-investment in music <br />Over-reliance on assortment size to compete as opposed to efficient operations <br />Failure to build efficient systems and processes <br />Branding failure <br />Lack of innovation<br />To Be<br />Increasing internet sales by transforming to the internet market<br />Be innovative, and create new products while building a better Brand<br />Cut back on product assortments and store size.<br />Create a better business model by implementing a new design structure that works<br />Implement new electronic products and a new information integrated web system that produces significant immediate results<br />
What type of organization structure is Borders?<br />Psychic Prison approach needs to be abandoned – system needs updating to compete in competitive market<br />Gap in market potential because of old structure<br />Amazon boasts of catalog of 900,000 books in its Kindle store, and the company posted $9.86 billion in sales in the first quarter of 2011—up 38 percent from last year<br />
Management: Current Structure<br />Currently structured as:<br />Stuck in its own Routine Culture<br />Trapped in a Psychic Prison<br />Mechanistically stagnant in its own failed processes<br />
What type of organization structure is Borders? <br />
The Internet and the Transformation of Commerce<br />Needs to be restructured as an information processing brain<br />Transform retailing and electronic commerce<br />Collaborate with manufacturers<br />Establish a direct interaction between customers, and manufacturers<br />Develop new polices, products, create jobs and plans that then provide a point of reference for the information processing and decision making of others<br />Eliminate intermediary firms, such as retailers <br />Powering Borders through the Internet . . .<br />
FORWARD THINKING & <br />WHERE WE ARE HEADING…<br />Kobo– Border’s own e-reader / compete with Nook, Kindle, iPad<br />Tweets–Border’s own online downloadable music site<br />Chirps–Border’s own online downloadable audio books<br />Internet – Online book and music discussions, book clubs, <br /> chat with the author or artist, etc.<br />
The original kobo lacks innovation and replicates the Nook and Kindle<br />The new kobo powered by Google will have dual screens - download books, music, & your favorite apps<br />
Remove music from stores<br />Online music downloads<br /> as player for Chirps and Tweets<br />Music artist fan clubs<br />Meet and talk with artists online<br />Half price download for Top 20 Tweets<br />Downloadable songs<br />and<br />music videos<br />
Chirp … Border’s downloadable audio books <br />Download magazines and books to the <br />Online book clubs & discussions<br />Meet and talk with authors online<br /> e-reader for Chirps and Tweets<br />Downloadable Audio<br />Books<br />
College Textbooks<br />Amazon Textbooks<br /><ul><li> Partner with smaller </li></ul> colleges to manage and <br /> run their school stores<br /><ul><li> Have private study </li></ul> rooms available for group <br /> projects<br /><ul><li> Textbook buy back </li></ul> program – 10% more for <br /> students who take their <br /> money in the form of <br /> store credit<br />Join Amazon Student and get FREE Two-Day Shipping on your textbooks as well as exclusive offers via e-mail. There is no cost to join.<br />John Hopkins, University of Maryland, University of Delaware, Penn State, Temple, University, Drexel University, LaSalle University, Rutgers University, and Rowan University<br />
Download your college textbook(s) to your e-reader, Apple iPad, or Blackberry Tablet<br />
Management is doing things right; leadership is doing the right things.<br />Peter F. Drucker (Father of Modern Business)<br />CEO George L. Jones<br />July 2006 to January 2009<br />CEO Michael J. Edwards<br />January 2009 to January 2010 <br />CEO Ron Marshall<br />January 2010 to Present <br />
SWOT Analysis<br />Strengths<br /><ul><li> Strong brand and name recognition
Multiple, convenient store fronts throughout the United States
Comfortable ambiance encourages people to read and relax - encouraged by the in-store café (use of cafe Seattle’s Best)Weaknesses
Outsourced online sales operation to Amazon – failed to develop solid internal web-based sales channel
Long-term leases, negotiated in a growing economy are now overpriced per square foot
High operating cost maintaining 500+ U.S. stores countrywide (energy and electricity)
Music supply in stores was greatly expanded as iPod’s and MP3’s gained popularity</li></ul>Opportunities<br /><ul><li> Renovate and re-model only the large, profitable stores
Move to a smaller bookstore/café format outside major cities (middle and upper income suburbs)
Reduce in-store movies and music and place online
E-reader introduced too late and only copies Nook and Kindle (not innovative or different)</li></ul>Threats<br /><ul><li> Brand repositioning to keep competitive, could turn off or alienate loyal customer base
Competitive marketplace in book sales especially from Amazon and Barnes and Noble
Kindle and Nook are successful and becoming increasingly popular
Public libraries offer free books and some upper income suburban libraries have in-house coffee shops</li></li></ul><li>
Change with the times</li></li></ul><li>How should management be restructured? <br />
Organizing as Brain/Organism Structure<br />Organism<br />Seeking to adapt and survive in a changing environment<br />Discover organizations needs<br />Brain<br />Be flexible, resilient, and inventive<br />Distribution of intelligence<br />Evolve along with the emerging challenges.<br />
Decrease Debt, Decrease Poor Performance Stores<br />Close 50% of lowest profiting stores <br /><ul><li>Reduce rent, which consumes 50% of revenue.
Decrease debt to profit ratio </li></ul>Keep most cost effective per area store per district and use as online warehouse/shipping centers. <br />
Concept Stores<br />Open 1 concept store per district<br />Experiment to see how successful the concept of small, cozy bookstores will be <br />Evaluate performance on quarterly basis<br />Performance based Borders locations by district. Mega-store vs. Small Bookstore <br />
Taking Back Borders.com<br />No longer outsourcing operation of Borders.com to Amazon. <br />Hire Borders employees from closed stores to operate the new online warehouses. <br />Retain employees who would otherwise no longer have jobs.<br />All operations become in house.<br />
Leadership Into the Future<br />The 5 K’s – Management objectives to remain ever changing with times and environment.<br />Keep in contact <br />Keep Innovating <br />Keep Improving <br />Know your environment <br />Know your employees<br />
Plans to Achieve Management Objectives<br />3 Year Plan<br /><ul><li> Weekly leadership development meetings.
Executive management, district management </li></ul> meetings via video conferencing. (Use <br /> technology for a change!)<br /><ul><li> Keep everyone in tune with management objectives and accomplishments.
Employee feedback meetings</li></li></ul><li>3 Year Plan Cont…<br /><ul><li>Weekly meetings between district and store management.
What is not working?</li></li></ul><li>Employee Feedback Meetings<br />Bi-weekly basis, the store leads will organize meetings with the stores staff.<br />All departments involved. <br />Share ideas on topics such as:<br /><ul><li>Areas for improvement