Question

Based on the company Barnes and Noble:

1. What trends in the external environment present threats to your company (look at all six areas of the external environment).

2. What trends in the external environment present opportunities for your company (look at all six areas of the external environment).

3. Please provide a summary of those opportunities and threats in an easy to understand table.

4. Describe the competitive environment using a porter's five forces analysis. Draw at least two conclusions from this analysis that will affect your companies strategic planning and decision making. For example, what does the structure of this industry say about the potential for profits?

Answer 1

1.Threats to B&N

Liability laws are different from country to country are threats.

Rising pay levels and increasing prices.

Increase in the raw material leads to a threat in profitability

Demand of highly profitable product is seasonal. Any unfortunate event in the favourable season can cause a decrease in profitability

Change in the consumer buying behaviour from online channel

Company is exposed to currency fluctuations as it markets into many countries

2. Opportunities to B&N

The company is enhancing its online customers. So this will help it to reach more customers and build good relations.

Due to government agreements new markets are opened to B&N

Low inflation rate are causing an increase in demand.

New technology is helping B&N to open up their markets

Governments green enforcement provide B&N a new idea to build market.

Market development will lead B&N to lower its competitor's strength.

3. Threats of B&N Opportunities of B&N

Laibility laws are different from country to country	Government agreement is providing an opportunity to open up market
Pricing can fluctiate from country to country	Low inflation rate are causing an increase in demand
increase in the raw material can lead to lowering the profits	enhancement of online platform may lead to develop a strong market.
change in consumer buying behaviour through online channels.	New technology helps B&N to open up the markets.

4. Porters five forces model analysis at B&N

Threats of new entrants: new entrants can change thier market by providing more value to the product or lowering the prices of the product, or finding a better substitute of the products.

bargaining power of the suppliers: suppliers in the dominating position can decrease the margin of B&N. Powerful suppliers can negotiate and decrease their profits.

Bargaining power of the buyers:Buyers want to pay less for more offerings. If customers are less and they are powerful they can bargain a lot with B&N and they will effect the company.

Threats of substitute products or services: Any other competitor can provide a better product similar to it or can decrease the prices as per the value. This can lead to a threat for B&N.

Rivalry from existing competitors: The competitors can lower down their profitability by decreasing the prices or by capturing the market through advertising campaigns.

B&N can focus on their opportunities and help in developing their markets. They have to build a strong base of these five forces. B&N have to be more sharp in dealing with the suppliers, customers and competitors on micro levels. They will have to build their economic scale in a way they can gain good profits. They will have to be innovating faster inorder to avoid competitors capture their markets. They have good hold on the market and they carry better opportunities to develop their markets. They should develop a sustainable differentiation inorder to build a strong profitable structure. They should be liasoning with the competitors in order to increase their market size then just to be in a small market. They will have to develop scale to compete in a better manner.