Required: Compare the business strategy between Amazon and Barnes and Noble and highlight the key differences. In

 

Required:

Compare the business strategy between Amazon and Barnes and Noble and highlight the key differences.
 
 
 
 
 

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In 2004, Amazon earned $588 million in net income on revenues of $6,921 million, and Barnes & Noble (B&N) earned $143 million on revenues of $4,874 million, including BarnesandNoble.com's net loss of $21 million on revenues of $420 million. Amazon, which had diversified significantly beyond books, held roughly 70% of the online book market in the United States, versus about 15% for BarnesandNoble.com At the beginning of 2005, Amazon's and B&N's stock market valuations amounted to $18 billion and $2.3 billion, respectively (see Exhibits 1 and 2 for more details). Amazon.com In 2005, Amazon was the world's largest online retailer, with 47 million active accounts. Since 1998, it had broadened its scope by internal expansion and acquisition. It moved from books into other media (music/video, DVDs, video games, software), and then into electronics and a dozen other categories. Nonmedia products accounted for 24% of Amazon's revenues in 2004, up from 17% in 2000, but margins on them lagged. Geographically, Amazon added operations targeted at the United Kingdom (1998), Germany (1998), France (2000), Japan (2000), Canada (2002), and China (2004). In 2004, 44% of Amazon's revenues came from outside North America, versus 14% in 2000, but international gross margins were low and had declined from 22% in 2002 to 19% in 2004 (versus 27% in North America.) Amazon's broadening of scope was part of a strategy that founder Jeff Bezos described as "getting big fast" and that also involved heavy expenditures on marketing and on information technology (IT) in the pursuit of "customer-centricity." According to one study, Amazon's marketing had reduced the price elasticity of its demand to -0.45¹ The yield from investments in IT included a widely imitated store design, ideas for reviews and community features, personalization options, and even patents-most controversially, for "one-click" checkout software, which Amazon sued BarnesandNoble.com for infringing.? To protect its know-how, Amazon also developed core In 2004, Amazon earned $588 million in net income on revenues of $6,921 million, and Barnes & Noble (B&N) earned $143 million on revenues of $4,874 million, including BarnesandNoble.com's net loss of $21 million on revenues of $420 million. Amazon, which had diversified significantly beyond books, held roughly 70% of the online book market in the United States, versus about 15% for BarnesandNoble.com At the beginning of 2005, Amazon's and B&N's stock market valuations amounted to $18 billion and $2.3 billion, respectively (see Exhibits 1 and 2 for more details). Amazon.com In 2005, Amazon was the world's largest online retailer, with 47 million active accounts. Since 1998, it had broadened its scope by internal expansion and acquisition. It moved from books into other media (music/video, DVDs, video games, software), and then into electronics and a dozen other categories. Nonmedia products accounted for 24% of Amazon's revenues in 2004, up from 17% in 2000, but margins on them lagged. Geographically, Amazon added operations targeted at the United Kingdom (1998), Germany (1998), France (2000), Japan (2000), Canada (2002), and China (2004). In 2004, 44% of Amazon's revenues came from outside North America, versus 14% in 2000, but international gross margins were low and had declined from 22% in 2002 to 19% in 2004 (versus 27% in North America.) Amazon's broadening of scope was part of a strategy that founder Jeff Bezos described as "getting big fast" and that also involved heavy expenditures on marketing and on information technology (IT) in the pursuit of "customer-centricity." According to one study, Amazon's marketing had reduced the price elasticity of its demand to -0.45¹ The yield from investments in IT included a widely imitated store design, ideas for reviews and community features, personalization options, and even patents-most controversially, for "one-click" checkout software, which Amazon sued BarnesandNoble.com for infringing.? To protect its know-how, Amazon also developed core

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Amazon and Barnes Noble pursued distinct business strategies during the early 2000s Amazons Strategy 1 Diversification Amazon significantly diversifie... View the full answer