Business Model analysis of Amazon and Barnes and Noble

The United States books market has grown by 1. 6% in '09 2009 to reach a value of $26. 1 billion (Data Monitor. com). On this large market sector the focus is more than ever on locating the best prices and firms like Amazon that are known for their high value at low prices strategy are well positioned to benefit from such market need. The Online Bookstore industry have grown to be a fierce business that involves discounts, varied selections and fast delivery in which all companies are challenging each other. The major competitors are Amazon and Barnes and Noble.

Competitive Forces

New Entrants

Amazon was the first one to get into the whole notion of online retail, and therefore being the first mover that they had the luxury to create the standards which became the norms for the industry. The only real feature lacking for amazon was its existence by means of real brick and mortar stores. This network of "actual" retail spaces which apparently managed to get easier for the consumer to come back or exchange the merchandise they were not satisfied with. This handicap of Amazon was the basis for the emergence of book retail giants Barnes and Noble to enter the online shopping industry.

Buyers

The buyer demographic for the online retail industry is individuals who have with special interests, highly educated, professionals, students and an usage of the Internet and computers. The segment of online shoppers has increased considerably lately due to the convenience of shopping in the comforts of the house and the accessibility of the web. These developments have made it easier for consumers to log on and purchase on the Internet. Consumers also tend to compare prices on the list of retail leaders in a way that buyers are able to buy products with very big discounts in comparison to ones bought in "actual" shops. The bargaining power of the buyer is dependant on the competitive strategies of every active firm on the market. Thus, consumers can challenge one firm for charging much more than the other one particular that the firm will beat the price tag on the competing firm.

Suppliers

Amazon's suppliers range from the publishing and media houses to electronics' manufacturers. Amazon buys all their books, videos and audio CDs from the multimedia houses and publishing giants such as Time Warner, Doubleday etc. Amazon also has alliances with other bookstores for orders that they can not serve.

Substitutes

The substitutes for Amazon and other online bookstores are the "actual" book retailer and music store, such as Barnes and Nobles itself. The impact from the substitutes is less and less each day and since buyer preferences are changing constantly, but one impact would be some consumers who would like to hold or listen to their purchases prior to buying and those who are into the shop "shopping experience".

Overview of Barnes & Nobel

Barnes&Noble. com, Inc. a wholly-owned subsidiary of Barnes and Noble, Inc. , is an online retailer of books, magazines, software, DVDs, videos, music, ebooks plus more. The online store's database greater than 1 million titles offers bestsellers, books from small presses and university publishers and access to approximately 30 million listings for out-of-print, used and rare books. The site contains book descriptions, reviews and excerpts, and a section that has advice from other readers, predicated on recent bestsellers. The internet site offers a feature which allows customers to market used textbooks to BarnesAndNoble. com. The web music store sells classical, jazz, rock and world music and various other genres of music, and will be offering exclusive interviews, free downloads in addition it also has 1 million sample sound clips, close to 100, 000 music reviews and a roster of 40, 000 artist biographies. The company's PC games and video store carries thousands of new and used titles, consoles, accessories and strategy guides. The website also sells toys, games and office supplies. Barnes & Noble, Jr. can be an online section specialized in children's books, videos and music. B&N Screening Room is a website where customers can view and order more than 10, 000 full length previews. Barnes and Noble owns and operates two distribution and customer support facilities in New Jersey and mainly operates through the Chain of book stores and through its e-commerce website. Thus Barnes & Nobel is a company with a solid brand and has a formidable presence in the book retail business enabling it to gain incremental market share by penetrating into new categories.

Overview of Amazon

Amazon. com, Inc. can be an Internet consumer-shopping site which offers millions of new, used, refurbished and collectible items in categories such as books, movies, music and games, electronics and computers, home and garden, toys, children's goods, grocery, apparel and jewelry, health and beauty, sports, outdoors, digital downloads, tools and auto and industrial. The company began functions in the first 90's as a web book retailer. The merchandise offered by the business include merchandise purchased for resale and products made available from third party sellers. Amazon caters to its seller customers by offering programs that enable this group of customers to sell their products on the seller's websites and also on Amazon's website. The seller customer can manage both websites (own website and Amazon's website) with a single account. Amazon fulfills the seller customer orders through its global fulfillment center network. Amazon earns fixed fees, revenue share fees or per-unit activity fees on such transactions. in certain countries. The Amazon Marketplace and Merchants programs allow third parties to integrate their products on Amazon internet sites, as well as provide related fulfillment and advertising services to third-party merchants; allow customers to shop for products owned by third parties using Amazon's features and technologies; and invite customers to complete transactions which include multiple sellers in one checkout process.

HEAD -TO - HEAD Analysis

Business Model Comparison

Amazon

Barnes&Nobel

Audience Targeting

Amazon targets a wider audience base and carries books for variety of different users

Barnes&Nobel's strategy is to market books to a more focused audience targeting and it lists books base on user demographics

Attractiveness

Convenience, price advantage, User analytics to generate recommendations and

Suggestions

Shipping to international locations

The advantage of a physical store, strong brand value, well focused segmentation and collection of books predicated on user segmentation

Effectiveness

Comparison of book prices, option of shopping for new as well as old books from the affiliate program and mainly the price saving for the buyer is a significant feature

The feel of traditional brick and mortar store are maintained and the web model adds to the added convenience and sometimes appears as the extension of the actual store

In the table below we take a comparative look and try to rate both online platforms each on scale of 1-5 on basic parameters which would be experienced by day to day users.

Usability - Amazon and Barnes and Nobel have good features such as customer review, catalogs, book comparisons, wish list features and many other features which make the browsing experience one of the best. Also both the websites include a lot of information about the books that they carry and have an intensive database for the same enabling the user to generate the most specific appropriate serp's.

Speed - Effectively BarnesandNobel website which really is a little less feature ridden and has an obvious and well uncluttered layout is a tad faster than the amazon website which is a lot more feature laden and contains rich media and AJAX, however the difference in speed is not a huge difference except for the simplified layout of BarnesandNobel permits a smoother browsing experience.

Design- The design of amazon and barnesandnobel where in the former is trending towards a far more feature rich experience like the recommendations feature, look inside feature, and a great many other user enhancement features which can be helpful but aren't sometimes necessary. Whereas in the case of barnesandnoble the website is very plainly designed to provide a clutter free browsing experience and the majority of what an individual demands is segmented into well differentiated categories and one of the better features is its search feature of barnesandnobel.

Customization- This feature is much more advanced in the amazon website where there is option to customize a lot of the user preferences and allows to even the change of history and other available choices in an individual account.

Thus based on the above chart and our own parameters we can deduce that in overall experience amazon rates higher and the Web UI for amazon is well planned and makes for a much better online shopping experience. Also with their strategy the focus is on the development efforts on and creating and enhancing the specialized, proprietary software that is exclusive to their business.

On the other hand the predicated on the BarnesandNobel approach the website is less cluttered and incredibly simplified in its layout when compared with amazon. com's feature laden website subsequently giving it a smooth browsing experience and allowing for less user distraction.

BARNESandNOBEL. com Monthly Unique Visitor Levels ( Latest month = 7, 718, 299 visitors )

AMAZON. com Monthly Unique Visitor Levels ( Latest month = 73, 279, 379 visitors )

From the above mentioned two graphs we can deduce that an individual traffic produced by amazon is a lot higher and so has some bearing on the customer preferences.

KEY FEATURES

Amazon. com

Amazon. com optimizes content to improve customer experience by the use of business analytic and business intelligence software

It depends on crunching massive data volumes: and provides customized suggestions on buyer's previous purchases thus using web analytics to its advantage

Comparison of prices to suggested retail and information about new book price and used book price

Customizable history and advice feature allows an individual to make changes and in the event there are results not the same as the users choice one can change it

Best practice Check out and SHOPPING CART SOFTWARE features

Search Inside feature for books that allows an individual to check out the index and first a couple of chapters of the book to get a better idea

BarnesandNobel. com

Membership model allows for added discounts and also brings back repeat buyers

The search feature of barnesandnobel. com is one with their strong points an individual has option to search by title of book, authors last name, keywords, price, and other different options

It suggests books predicated on trends and similar buyer preferences

Option to get books either by registering or by using the express check out

Buyers can truly add books that happen to be sold-out with their wish list and later be notified when the book is in stock

A set of the best-selling books Is displayed to help users who are browsing to contemplate buying a book

New Blogging platforms 2. 0 feature added is the "Tag Cloud" where trend of user search words is highlighted and a lot more the term has been searched for, the bolder and bigger it appears in the cloud

Conclusion

Thus on examination of the market leaders in the web book retail segment it is clear that the market is highly competitive and there is increased competition being faced by the existing players which has also resulted in price wars and there is regular need to provide better customer experience and much more user functions and on evaluation of the factors such as innovation, better customer experience and the income and business types of the marketplace leaders we can assume that even though both are online retailers of books but nonetheless there is a vast difference in both their business models. Amazon which really is a pure online marketer and BarnesandNobel which can be an online and a offline business have different customer appeal. By incorporating the best features among both the websites and by carving out a niche segment in the online book retailing segment we might be able to deliver a website which is abundant with content and also provides exceptional buyer experience.

The notion of coming up with a focused and niche based website targeting the Arabic speaking world is that there is dearth of such something and there is absolutely no company who full fills the current market need, and so in order to fill the forex market gap and towards this goal the idea of Merhaba. com has been proposed which would achieve the status to be the premier online book seller targeted into the Middle-Eastern and Islamic world and give us the differentiation and enable to carve out a distinct segment to survive in this highly competitive market.

Thus predicated on an online Catalog/Affiliate model the website would likewise have space to promote on the affiliate pages and in turn providing for generation of earnings from three different stream, mainly from the sale of books direct from the net portal as well as to give a platform for individual sellers to host their accounts and list their own merchandise also to generate commission and also derive earnings from advertising on affiliate pages. The idea is to try an implement an online site which offers the user a convenience and also robust enough to attain smooth transactions and have repeat buyer.

Some of the primary stay top features of this site would be the following

Arabic and English content and language support

Effective website and catalog search

Enlarged product views

Recommendation feature for users using BI

Affiliate program for partners to market their own merchandise and generate earnings from commission

Customer review and feedback section

Customer wish list and email, wherein an out of stock item when in stock the customer would receive a contact informing him of the same.

Frequent buyer programs

Search trends by means of a "Tag Cloud"

With all these features in mind the theory is to produce a website which supplies improved user experience and enough features so as to go from different stage of a user

Arrival- An individual Arrives on the website

Navigation- Browses the merchandise

Decision- Makes the decision

Purchase- and confirms the sale and makes the payement

Thus with the aforementioned goal at heart the intent of fabricating Merhaba. com is to provide to consumers of books a different option other than the existing and traditional online booksellers that are targeted towards only the English speaking user. The prospective segment for the web retail market for our website would be in the Saudi Arabia and other parts of the middle-eastern region.

Also We Can Offer!

Other services that we offer

If you don’t see the necessary subject, paper type, or topic in our list of available services and examples, don’t worry! We have a number of other academic disciplines to suit the needs of anyone who visits this website looking for help.

How to ...

We made your life easier with putting together a big number of articles and guidelines on how to plan and write different types of assignments (Essay, Research Paper, Dissertation etc)