Bookstore Analysis

Introduction

This essay focuses on the case analysis of the demise of Borders Group, specifically, its business response towards the choice of liquidation of physical stores and the transformation to digital stores at the beginning of 2011. To evaluate this business response, industry development, corporates’ core competency and Borders’ financial position are set up as the evaluation criteria. Also, three relative recommendations are put forward in the end on the purpose of improving the quality of business responses that may be made by other bookstores in the future.

Case Overview

Borders Group Inc., having experienced almost 40 years of development across the world, ended its life in 2011 under the circumstance of the severe competition of online bookstores and the popularity of digital books (Checkler and Trachtenberg 2011). Even as the second-largest American book and music retailer, Borders made several wrong decisions in the process of development and expansion, such as outsourcing the online sales operation to Amazon, concentrating on store expansion and refurbishment in the initial stage of bookstore digitalization and heavily investing in CD and DVD sales which put itself into the over debt situation (The Week 2011). Having filed for bankruptcy and accepted financial assistance from GE capital, Borders still liquidated 226 of its stores in February 2011(Nawotka 2011). Worse more, Borders failed to attract a buyer to save its financial distress under the bankruptcy protection (Newman 2011) and then liquidated the remaining stores.

However, Barnes & Noble, the largest book retailer in U.S. and Borders’s biggest competitor remained all its 700 stores in America. More importantly, Barnes & Noble’s online sales and its digital technology-the Nook, which is regarded as a better electronic device than Amazon’s Kindle, assisted Barnes & Noble to occupy almost 25% of the total e-book market (Sanburn 2011).

Business Response Analysis

Given the...