The company chosen for this report is Borders Group Inc. The analyse of the competitive environment is necessary for every organisation and Borders Group Inc. is no exception (Schwalbe 2015). The objective of the report is to highlight the strategic issues Borders group faced and the reasons why they fail.
The report will highlight the three analysis-the PEST analysis, the SWOT analysis and the Poster’s Five Forces analysis on which Borders group faulty strategies can be examined. The SWOT analysis provides greater insights on the strength, weakness, opportunities and the threats. From the SWOT analysis, the weakness can be measured. They have not followed the customers’ demands and followed the traditional marketing. This report will highlight those factors by which their faulty measures could have been mitigated and also the recommendations have been discussed.
Borders Group, Inc an international book seller was initiated in the early seventies by Tom Borders and Louis Borders. Duos who were both University of Michigan pass outs established book retail stores across USA (Kerzner 2013). They established a book inventory system and the quality of the inventory system was quite good at that times and earned fame in quick times. However, due to tactical mistakes they made caused the downfall of the company (Strategic Analysis on Borders 2017). Borders Group, Inc’s failures to adapt with the external and environmental analysis have been considered in this report and will be discussed further.
The reasons for the project failure-
Their failures will help to learn that environmental analysis is equally important besides other aspects.
SWOT, PESTLE analysis, Poster’s Five Forces analysis will help to detect their sudden downfall. From the SWOT analysis, it can be noted that Borders Group, Inc’s weakness was overriding their strength. They overlooked all the opportunities they had, instead of stuck to their basis (Serra and Kunc 2015). They made mistakes constantly and did not make a proper analysis, did not analyse the risks associated. The risks and the constant threats ultimately put to end to Borders Group, Inc.
From the Poster’s Five Forces analysis by analysing the factors- the threat from the competitors, competitive rivalry, and barriers to entry and bargaining power of suppliers, the exact downfall for the company can be known. They did not adapt to the prevalent trends and followed the traditional way (Serra and Kunc 2015). They did not listen to the public growing demands at all.
The PESTLE analysis involves the environmental, political, social, economic, technological aspects on which the market is analysed (Martinelli and Milosevic 2016). The company also overlooked that, however, this analysis will assist in what was the situation around, Borders could compare their company’s situation with others, in this way they could get an overview what was going wrong and what was the market then.
Based on these standard criteria, the probable downfall of the company can be detected.
SWOT analysis provides the best overview of the failures of the company.
Strengths: From the SWOT analysis the strength, weakness, opportunities and threats for Borders can be examined. Border’s strength was that they had a strong brand name and reputation too (Strategic Analysis on Borders 2017). The customers knew bookstore only by their name. They had multiple customers’ base all across the globe in USA, UK, Australia, New Zealand. They sold many things other things other than books, they sold music CD, DVDs and they run a café. They had a strong customer base of aged 40. They had several loyalty programs for the customers’ benefits (Martinelli and Milosevic 2016). Besides all that, they too had the opportunity to initiate online marketing to sell their books online.
Opportunities: Borders had opportunities too. They had the opportunity to enhance their business activities, they could tie up with the universities and could sell their textbooks and could initiate their e-commerce activities. The e-books generally save space, the cost of e-books is relatively lesser compared to the hard copies of the books, these books also bear the lower rental cost. Since they were the market leader then, could shift to internet marketing that could have embellished their business (Martinsuo and Killen 2014). Borders could have averted their establishment of physical chain stores instead they should focus on the online marketing only.
Weakness: Borders had a certain weakness which they should notice. They had the stores with all outdated features and outdated modelling, and they were not willing to adapt to the latest features (Strategic Analysis on Borders 2017). They did not listen to the customers’ demands. They made another blunder handling their online sales to their competitor, Amazon. B&N tried and established their book store while Borders gave up. They focused on to expand their physical chains. They utilized debt-financing and later moved on to online retail marketing, but due to the heavy debt, they got bankrupted (Heldman 2015). They had a poor management team, their CEO was not wise to take correct decision for the company, and due to lack of knowledge and expertise, they eventually faced the disaster. Though Borders was the market leader, their approaches were like followers.
Threats: The new competitors with the advent of Internet and the usage of e-commerce flourished and kept Borders back. The iPhone users prefer ebooks to hard copy books and in this way, they lose the market share. B&N connection with Starbucks brought lot more troubles for Borders (Verzuh 2015). For the e-commerce, the book retail industry converted to monopolistic from oligopolistic, that was another threat for Borders, last but not the least, Borders invested money on the physical retail chains and the amount they invested were not going to come back (Strategic Analysis on Borders 2017). These were the probable threats that Borders had and the reasons why they failed.
Borders if take these mentioned approaches they can be re-run their business and can even prosper in future.
Conclusion
It can be concluded from the above discourse that Borders should have made environmental analysis, should have taken modern approaches to prosper their business, but they negotiate those and this negligence cost them too much. The SWOT analysis, the PESTLE analysis, the Poster’s Five Forces analysis have been made in the report. This report based on the SWOT, PESTLE and Poster’s Five Forces analysis show lights on Borders’ project failures and the reasons behind those failures. SWOT analysis is more appropriate to know the failure cases. This report measures Borders in terms of strength, weakness, opportunities and threats. It is found that their weakness outweighed their strength. They had not followed the customers’ wish and demands instead followed the traditional way of marketing. This report highlighted the solutions following which they could have avoided the disaster. The further recommendations have also been stated in the report.
References
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