Application and Recommendation of Grand Strategy and BCG Matrix to Barnes & Noble

Application and Recommendation of Grand Strategy and BCG Matrix to Barnes & Noble
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Strategy Application and Recommendation for Barnes & Noble
Section 1 – Introduction
The increasing globalization and changing business dynamics make it significant for modern organizations to devise and implement unique strategies. The subsequent report contains the application of the Grand Strategy Matrix (GSM) and BCG matrix to the largest bookselling company in the United States, Barnes & Noble. The book industry has been facing some severe challenges in recent times, which restricted the growth of this industry. The increasing trend of e-books, piracy, social media, technological advancements, the movie industry, and the internet are significant issues in this industry (Hall & Gupta, 2010). The industry is highly competitive due to traditional bookstores, e-retailers, and technological devices for book reading.
The paper discusses the assumptions which are made during the application of the grand strategy matrix. The results of the BCG matrix and GSM matrix are then compared to evaluate the success of the strategy implemented. It will explain the effectiveness of the BCG matrix to the grand strategy matrix. Finally, the last section recommends the grand strategy for Barnes & Noble to achieve business success and profit optimization.
Section 2- Application of the Grand Strategy Matrix to Barnes & Noble
Grand Strategy Matrix (GSM) is an analytical tool that allows businesses to formulate alternate strategies following the company's competitive strengths and trends in the respective industry. It helps organizations decide the resource allocation for the maximum return (Kebede, 2021). Corporate leaders use the matrix to unfold opportunities using organizational strengths to meet the challenges of the global business context with the help of internal and external competence.
Figure: Grand Strategy Matrix (Smyth, 2021)
The four quadrants are based on market growth and competitive positioning. TheseThese quadrants represent different positioning of the firms in the industry. Implementing the Grand Strategy Matrix to Barnes & Noble led to the proposition that the company is currently present in quadrant III. The firms in this quadrant undergo slow growth due to low industrial growth and experience weak competitive positioning in the market (Smyth, 2021). It shows that the company needs to take better initiatives and devise effective strategies to survive in the highly competitive environment. The firm competes with traditional stores, online retailers, independent booksellers, and technology devices (Smyth, 2021). The industry has made a considerable shift towards the e-retail model. The online sales of Barnes & Noble are $476 million compared to the staggering $14,835 million of Amazon (Hall & Gupta, 2010). Changing consumer behavior is a continuous challenge for the company. Barnes & Noble can use a diversification strategy to develop unique products or services to ensure its competitiveness in the bookselling industry. The company should use technology to succeed in the hi-tech business environment. Barnes & Noble can diversify in the areas, i.e., relevant and irrelevant domains. The relevant area comprises using different strategies while in the bookselling business. The use of diversified strategies offers uniqueness to the business.
On the other hand, the irrelevant domain includes the firm's diversification in other businesses, such as the e-retailing of products like Amazon does. The company can start listing several products from different retailers online to sell them to the target audience directly. It can help the company to expand its market share. The company must concentrate on remodelling its existing stores without further expansion of physical locations. The industry is already experiencing a decline. So the company should avoid the massive investment in physical stores by the industry to ensure the business's profitability in a challenging global environment.
Section 3- Assumptions Made in the GSM
There are various assumptions made in applying the grand strategy matrix. Firstly, the changing customer behavior is assumed to be the main reason behind the industry's slow growth. These assumptions helped place Barnes & Noble in the respective quadrant. The bookselling industry has been continuously declining because of the increasing shift towards e-reading culture, an outbreak of technology devices, and social media. Barnes & Noble relies on its critical strategic business model, i.e., brick-and-mortar. The business experiences slow growth as it lacks new strategies and models related to e-book retail.
Similarly, the competitive positioning of Barnes & Noble is assumed to be weak. The sales figure of Amazon, the largest book retailer in the United States, is compared with Barnes & Noble, which assisted in assuming the weak competitive positioning of the company (Hall & Gupta, 2013). The bookselling company competes in the market with the largest bookselling corporations in the world, relying primarily on its traditional business model. The online business model of the company is not as effective, making them lose a considerable share in the local and global markets. Based on these assumptions, Barnes & Noble has been positioned in quadrant III of the Grand Strategy Matrix. So the assumptions helped in the placement of the company in GSM.
Section 4- Application of BCG Matrix to Barnes & Noble
BCG matrix is an organizational planning tool that allows businesses to analyze their strategic position in the industry. The firm can use it to review its product portfolio and make critical decisions regarding investment, expansion, development, or termination of product or strategy. It is a four-square matrix showing the market growth and shares in four categories, including dogs, cash cows, question marks, and stars. The matrix provides support in prioritizing corporate strategies or decisions.
The BCG matrix application to Barnes & Noble shows that the bookselling retailers are cash cows (Mohajan, 2021). Cash cows have a high market share but low market growth, which shows the current position of Barnes & Noble. The bookselling company has a high market share compared to other firms in the industry, keeping in view that the market growth rate of the bookselling industry is either stagnant or decreasing. The company has two strategic choices for its business operations: brick-and-mortar or online retailing.
4.1 Online Internet Business
The book retailer has a strong market presence along with immense opportunities. These opportunities exist in internet business and the online industry. The market share of e-business shows that although Barnes & Nobles has a considerable market share, it still has a long way to compete with Amazon in e-retailing. New technology devices such as e-books, e...