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CDR INC.

Galaxy NookJune 22 2014

Presented by Carl Kutschke Robert Cable

Derrick GreenDavid Gomes

Strategic Business Proposal

CDR INC.

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Strategic Business Proposal

• Integrity

• Teamwork

• Skillful Planning

• Innovative thinking

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Galaxy Nook

CDR is a team of strategic consultants that assists executive managers with planning how to determine to employ the company’s resources to increase profits and revenue.

CDR incorporates:

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Internal Analysis External Analysis

Organizational Strengths Competitors

Organizational Weakness Business Climate

Business Opportunities

Business Threats

Galaxy NookStrategic Business Proposal

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Internal Analysis

• Barnes & Noble INC. is the largest book retailer in the United States. According to resources, Barnes & Noble is the largest retailer in content, digital media, and educational content in the country. As of January 2014, Barnes & Noble 663 retail stores, as well as 696 bookstores in all 50 states.

• Customer service: Make every customer a “ customer for life. Above and Beyond customer serviceQuality: deliver desired results within a certain time frameEmpathy: care for one another through actions and words. Thankful for customers and booksellers. Impact communities

through art, literature and educationRespect: treat each other and customers with dignity and respectIntegrity: have highest standards of ethics and Integrity.Responsibilities: Take action with sense of urgency. Match day-to-day decisions with company goals. Teamwork: create environment that nurtures open communication. Feedback in a constructive manner. Follow up with

everyone in a timely manner.

•

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Organizational Strengths

• January 2009, Barnes & Noble promoted 38-year-old William Lynch to President of its online division store. Lynch brought Barnes & Noble much needed online marketing skills. March of 2010, Lynch is promoted to CEO of Barnes & Nobles’ Online, College, and Trade retail divisions.

Demand for digital books is growing fast. Barnes & Noble with its popular devices and sales and marketing engine is in an excellent position to capitalize on this growth.

• Liberty Media is the largest Mass Media Corporation in America. Liberty Media made a $204 Million dollar investment in Barnes & Noble in 2011. Liberty Media is known for it legendary returns on the investments its made.

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College store business is still profitable: This is Barnes & Nobles most profitable part of its operations. Made twice as much money for Barnes & Noble then its retail stores did.

Nook is competitive in a strong market: Barnes & Noble’s Nook is in a heated battle with Amazon’s Kindle Fire. They are always head to head with each other.

Kid’s Books and Women’s romances are successful for Barnes & Noble: These 2 areas are Barnes & Nobles strongest suites. Barnes & Noble store is more user friendly to kids then Amazon’s Kindle store.

Barnes & Noble stores are showcases for physical books and hubs for communities: Barnes & Noble is basically the last man standing. Books a Million is Barnes & Nobles only Brick & Mortar retailer competition at a distant 2nd with only 200 stores. It is the only place for publishers to showcase newly printed books.

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• Kid’s Books and Women’s romances are successful for Barnes & Noble: These 2 areas are Barnes & Nobles strongest suites. Barnes & Noble store is more user friendly to kids then Amazon’s Kindle store.

Barnes & Noble stores are showcases for physical books and hubs for communities: Barnes & Noble is basically the last man standing. Books a Million is Barnes & Nobles only Brick & Mortar retailer competition at a distant 2nd with only 200 stores. It is the only place for publishers to showcase newly printed books.

•

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Organizational  Weaknesses

• Authors Love Amazon: Most Authors prefer using Amazon over Barnes & Noble. More then 75,000 titles are available on Amazon Kindle then they are on Barnes & Nobles Nook.

No International Presence: Barnes & Noble has no stores outside the U.S. According to the Article, there are no plans for Barnes & Noble to expand outside the U.S. Amazon is in Europe and Asia and is expanding even further.

Network of stores too costly: The demand for books in retail stores is going down. In order to compensate for that lose, Barnes & Nobles had to add toys and games.

No One has succeeded in competing with Jeff Bezos at Amazon.com: Barnes & Noble worth a small fraction of Amazon. Barnes & Noble has to worry about making money-selling books. Amazon could care less. Bezos has an original vision that keeps people from competing with him.

•

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Customers

• Barnes & Noble caters to thousands of people in all 50 states. Most of the people Barnes & Noble cater to are: Children, Teens, College students, and women. The Age ranges are from 1 to 45 years old. Most of Barnes & Nobles business comes from college students and women who love to read. In fact, College Students make up the most business for Barnes & Noble. Barnes & Noble makes double its sales from college students.

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Collaborators

• As of 2014, Barnes & Noble is the largest book retailer in the U.S. They operate over 600+ stores in all 50 states. Barnes & Noble caters to every customer’s wants and needs. As I mentioned above, the majority of Barnes & Noble’s business comes from college students. Barnes & Noble has 600+ college bookstores in all 50 states for students to get books. Also stated above is the fact that Barnes & Noble has huge success with children’s books and women’s romance. Barnes & Noble carries a huge variety of children’s books and women’s romance novels. Barnes & Noble’s distribution channels are: Their Brick & Mortal retail stores, Barnes & Noble.com, Barnes & Noble college book stores, and their Nook. Barnes & Noble frequently orders books so they are always stocked with the latest titles.

•

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External Analysis

• Amazon INC: Amazon is Barnes & Nobles biggest competitor. Amazon is a direct competitor. These 2 companies have been waging wars with each other with the Kindle Fire and the Nook. Amazon is out gunning Barnes & Noble because its Kindle Fire sells more then the Nook.

Apple INC: Apple INC is an indirect competitor of Barnes & Noble. While Apple does have The IPad, there is a reason why it is an indirect competitor. Barnes & Noble and Amazon have millions of book titles available for its Kindle Fire and Nook. Apple does not since it does not sell book. Apple has to let Amazon & Barnes & Noble sell Ebooks on its Ipad.

Books a Million: Books a Million is Barnes & Nobles second competitor when it comes to brick and mortal retail stores. Books a Million is a distant second competitor with 200 brick and mortar stores. Book a Million is a direct competitor.

•

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Sales Objective

• Hire  and  train  top  sales  people  to  understand  their  strengths  and  have  a  well-­‐defined  plan  to  reach  prospects.

•  Build  customer  rela9onships  with  customers  by  crea9ng  a  customer  database.

• Add  several  online  pay  op9ons  such  as  PayPal  (all-­‐in-­‐one  online  payment),  and  Interac  online  (make  payments  directly  from  customers  bank  accounts).

• Focus  and  understand  more  on  how  the  compe99on  is  promo9ng  their  tablets.

• Sell  a  million  units  by  the  fourth  quarter  report.

• Sell  the  Galaxy  Nook  at  the  low  end  to  aJract  bargain-­‐conscious  customers.

•

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Business Climate

• P: E-Commerce Safety, Internet Taxation, Book Content Regulations

• E: Economy Downturn, Amazon growth in China and India, Value on money Fluctuation.

• S: Online & Social Networking, EThical & Religious Issues, Declining number of visitors

• T: E Book Wars, increasing virtual libraries, 3D book Tech

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Business Opportunities

• Increase in Demand for Digital Products

• Dwindling number of booksellers and Independent chains

• B & Noble College is biggest money maker for Barnes & Noble

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Business Threats

• Weak Economy

• Competitors Like Amazon Slashing prices

• Competitors Coming out with tablets to compete with Nook

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ORGANIZATIONAL CHALLENGES

• Barnes  &  Noble  has  created,  and  released,  their  tablet  known  as  the  Nook.  The  Nook  was  created  to  offer  Barnes  &  Noble’s  extensive  library  of  books,  apps,  and  movies/TV  shows.  Unfortunately,  the  Nook  was  unable  to  compete  with  its’  biggest  compe9tor,  Amazon’s  Kindle  Fire,  subsequently  leading  to  the  resigna9on  of  then  CEO  William  Lynch  (Smith,  2013).  The  challenges  that  have  risen,  and  are  s9ll  significant  today,  for  the  Nook  are  as  follows:

•

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• Barnes  &  Noble  has  created,  and  released,  their  tablet  known  as  the  Nook.  The  Nook  was  created  to  offer  Barnes  &  Noble’s  extensive  library  of  books,  apps,  and  movies/TV  shows.  Unfortunately,  the  Nook  was  unable  to  compete  with  its’  biggest  compe9tor,  Amazon’s  Kindle  Fire,  subsequently  leading  to  the  resigna9on  of  then  CEO  William  Lynch  (Smith,  2013).  The  challenges  that  have  risen,  and  are  s9ll  significant  today,  for  the  Nook  are  as  follows:

• Barnes  &  Noble  is  tremendously  lacking  in  innova9on;  if  the  Nook  were  to  compete  with  compe99on,  newer  technology  would  have  to  have  been  used,  including,  but  not  limited  to,  a  camera  (to  host  video  chat  or  simply  to  take  pictures).  

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Proposed Solution

• What we are attempting to accomplish with this proposal, is boost marketing for the nook and for Barnes & Noble. In order to boost sales for the Nook, Barnes & Noble will need to enlist help from an outside party. For This we are suggesting samsung take control over how the nook is recreated and what will be added: example additions are at a front and rear facing camera

• Marketing will need to be heavily focused on in order to promote the Nook’s presence on the market. DataXu is an ideal candidate in assisting with marketing. DataXu is ranked five among marketing companies reviewed by inc. (Mansueto Ventures, 2014). Barnes & Noble also has a detailed outline on how they approach marketing. Whats considered a trade secret. Barnes and noble advertising budget is outlined in the Annual Reports ( Barnes & Noble, 2013)

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Marketing Objective

• Focus  on  Barnes  and  Noble  prospects  by  analyzing  Nook  tablet  owner’s  key  traits  they  share  and  retain  loyal  customers  by  offering  trade-­‐in  discounts.  

• Promote  the  new  features  to  showcase  its  ability  to  func9on  as  a  mul9media  device.

• Implement  a  tac9c  to  salvage  poten9al  customers  with  an  effec9ve  follow  up  system.

Enhance  the  in-­‐store  experience  by  se_ng  up  product  displays  to  clearly  define  the  differences

• and  features.

• Manage  digital  signage  to  improve  communica9on  with  interac9ve  displays  on  billboards  and  web  ads.

• Use  pay-­‐per-­‐click  adver9sing  like  Google  Ad,  Business.com,  and  Yahoo  to  reach  a  larger  market.  This  will  insure  to  receive  top  visibility  for  driving  more  customers  to  Barnes  and  Noble  website.

• Expand  to  new  markets  like,  filmmakers,  music  producers,  and  video  editors.

• Create  a  tagline  (“Experience,  Innovate,  Vision”).  Create  stunning  graphics  and  catchy  jingles  for  adver9sing.

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Sales Objective

• • Hire  and  train  top  sales  people  to  understand  their  strengths  and  have  a  well-­‐defined  plan  to  reach  prospects.

•  Build  customer  rela9onships  with  customers  by  crea9ng  a  customer  database.

• Add  several  online  pay  op9ons  such  as  PayPal  (all-­‐in-­‐one  online  payment),  and  Interac  online  (make  payments  directly  from  customers  bank  accounts).

• Focus  and  understand  more  on  how  the  compe99on  is  promo9ng  their  tablets.

• Sell  a  million  units  by  the  fourth  quarter  report.

Sell  the  Galaxy  Nook  at  the  low  end  to  aJract  bargain-­‐conscious  

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Appendices and References• Barnes & Noble (2013). 2013 Annual Report. Retrieved from http://www.barnesandnobleinc.com/for_investors/annual_reports/2013_bn_annual_report.pdfBarnes & Noble Booksellers. (n.d.). Barnes & Noble Booksellers. Retrieved June 6, 2014, from http://www.barnesandnobleinc.com/our_company/history/bn_history.html

Barnes & Noble Booksellers. (n.d.). Barnes & Noble Booksellers. Retrieved June 6, 2014, from http://www.barnesandnobleinc.com/jobs/core_values/our_core_values.html

Barnes & Noble and the limits of digital innovation. (n.d.). Modus Associates Digital strategy and design agency. Retrieved June 7, 2014, from http://modusassociates.com/barnes-noble-and-the-limits-of-digital-innovation/

Barnes  &  Noble  Booksellers.  (n.d.).  Barnes  &  Noble  Booksellers.  Retrieved  June  8,  2014,  from  hJp://www.barnesandnobleinc.com/our_company/our_main_businesses/our_main_businesses.html

Educa9onal  Partners.  (n.d.).  Barnes  &  Noble  @  School.  Retrieved  June  8,  2014,  from  hJp://www.barnesandnoble.com/u/BN-­‐educa9onal-­‐partners-­‐organiza9ons/379000209/

Edmunds,  Sam  A.  (n.d).  Sales  Strategy  Examples.  Retrieved  from,  hJp://yourbusiness.azcentral.com/sales-­‐strategy-­‐examples-­‐12312.html

Greenfield, J. (2003, January 12). Seven Advantages Barnes & Noble Has in the Bookseller Wars. Digital Book World. Retrieved June 6, 2014, from http://www.digitalbookworld.com/2012/seven-advantages-barnes-noble-has-in-the-bookseller-wars/

Greenfield, J. (2013, January 12). Four Disadvantages for Barnes & Noble in the Bookseller Wars. Digital Book World. Retrieved June 7, 2014, from http://www.digitalbookworld.com/2012/four-disadvantages-for-barnes-noble-in-the-bookseller-wars/

Mansueto  Ventures  (2014).  Top  Adver9sing  &  Marke9ng  Companies  on  the  Inc.  5000.  Retrieved  from  hJp://www.inc.com/inc5000/list/industry/adver9sing-­‐marke9ng.

Market  Watch  (2014).  AAPL  Annual  Income  Statement.  Retrieved  from  hJp://www.marketwatch.com/inves9ng/stock/aapl/financials.  

Market  Watch  (2014).  AMZN  Annual  Income  Statement.  Retrieved  from  hJp://www.marketwatch.com/inves9ng/stock/amzn/financials.  

Market  Watch  (2014).  BKS  Annual  Income  Statement.  Retrieved  from  hJp://www.marketwatch.com/inves9ng/stock/bks/financials.

Marshall,  J.  (2013).  What  Online  Ads  Really  Cost.  Retrieved  from  hJp://digiday.com/publishers/what-­‐online-­‐ads-­‐really-­‐cost/.  

Peckham,  M.  (2014).  Samsung,  Barnes  &  Noble  to  Launch  Co-­‐Branded  Nook.  Time.Com,  1.  Retrieved  from,  hJp://web.b.ebscohost.com.oclc.fullsail.edu:81/ehost/detail?sid=4ecba62b-­‐cb3f-­‐43c9-­‐92e3-­‐a1bf4d13ecfc%40sessionmgr110&vid=8&hid=125&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=a9h&AN=96414563

Rocco,  M.  (2014,  June  5).  Barnes  &  Noble  Partners  With  Samsung  to  Make  Nook  Tablets.  Fox  Business.  Retrieved  June  8,  2014,  from  hJp://www.foxbusiness.com/industries/2014/06/05/barnes-­‐noble-­‐to-­‐develop-­‐tablets-­‐with-­‐samsung/

Shanklin,  W.  (2012).  Nook  HD  vs.  Kindle  Fire  HD.  Retrieved  from  hJp://www.gizmag.com/kindle-­‐fire-­‐hd-­‐vs-­‐nook-­‐hd/24959/.

Smith,  P.  (2013).  The  war  between  Nook  &  Kindle  is  over  and  Amazon  has  carried  the  day  |  ITworld.  Retrieved  from  hJp://www.itworld.com/personal-­‐tech/364414/war-­‐between-­‐nook-­‐kindle-­‐over-­‐and-­‐amazon-­‐has-­‐carried-­‐day.

Tablet  Rocket  (n.d.).  Barnes  and  Noble  Nook  HD+  vs  Amazon  Kindle  Fire  HDX  8.9.  Retrieved  from  hJp://tabletrocket.com/tablets/Barnes-­‐and-­‐Noble-­‐Nook-­‐HD-­‐vs-­‐Amazon-­‐Kindle-­‐Fire-­‐HDX-­‐8.9.

Tax,  D.  K.  (2012).  Microsox  Invests  $300M  in  Barnes  and  Noble,  SeJles  Patent  Flap.  Eweek,  7.  Retrieved  from,  hJp://web.b.ebscohost.com.oclc.fullsail.edu:81/ehost/detail?vid=4&sid=4ecba62b-­‐cb3f-­‐43c9-­‐92e3-­‐a1bf4d13ecfc%40sessionmgr110&hid=125&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=a9h&AN=91658144

Yahoo  Finance  (2014).  AAPL  Income  Statement.  Retrieved  from  hJps://finance.yahoo.com/q/is?s=AAPL+Income+Statement&annual

Yahoo  Finance  (2014).  AMZN  Income  Statement.  Retrieved  from  hJps://finance.yahoo.com/q/is?s=AMZN+Income+Statement&annual.

Yahoo  Finance  (2014).  BKS  Income  Statement.  Retrieved  from  hJps://finance.yahoo.com/q/is?s=BKS+Income+Statement&annual.  

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