Amazon vs. Borders

Business Approaches, Management, and Marketing:

Amazon.com vs. Borders Books

Strayer University

BUS 302: Management Concepts

April 29, 2012

Jeff Bezos, former vice-president of D.E. Shaw, founded Amazon.com in 1994. After reading an article that forecast an annual Web growth of 2,300 percent, Jeff Bezos decided to make Amazon.com’s headquarters in Seattle, Washington. Seattle, Washington was a hot spot for the rapidly growing high tech work force. Bezos had a hard time finding initial investors, because he did not project a profit for the first five to six years of the company’s formation. Bezos startup funds came from family and friends, he ultimately raised one million dollars for his initial capital. Amazon.com started its operations in Bezos garage selling books, but quickly grew to the Amazon.com we know today. Amazon.com sells DVDs, CDs, furniture, jewelry, electronics, software, video games, toys and even food. Amazon.com sells its products all around the world and can reach any consumer that has an interest connection.

Borders, or Borders Group, Inc., started out as a single used bookstore in Ann Harbor, Michigan. Borders was founded by Louis and Tom Borders in 1971. In 1975, Louis and Tom bought out stock of Wahr’s an eighty year old bookstore that was closing its doors and moved their store to a much larger location. Borders was bought out by Kmart in 1992. Kmart tried to expand Borders into Canada, but failed because regulations could not be met. Borders did manage to expand internationally in 1997 by opening a store in Singapore which was quickly followed by stores in the UK, Ireland, Australia, and New Zealand. By 2003 Borders had over 1,200 stores under their name as well under their parent company Waldenbooks. Borders made arrangements with Starbucks in 2004 to operate Cafés in their stores. By 2006, Borders was starting to feel the pressure and backlash of online book retailers with a severe decline in business and...