Borders Books Strategy

Leading Organizational Change at Borders Bookstore In defining the future direction of the Borders Book Store chain to mitigate the risks of going out of business, several key strategic areas of the company need to change immediately. Each of these areas is deeply engrained in the culture of the company, making them easily identified yet very challenging to overcome. For Borders to survive as a business however, the following areas need to be changed immediately.

First and most significant is the lack of operational scalability due to too much reliance on the physical store model (Raff, 2000). Pending capital investments planned for building new international stores need to be halted immediately, with the funds being invested more into initiatives that better match how customers purchase and consume books. By choosing to not to expand store operations using physical locations, additional funds will be available to break the dependence Borders has on Amazon for its online strategy (Villa, 2001).

Borders' future is going to be won or lost online, and the stores in place serve as a suitable enough foundation for delivering an excellent customer experience. There is no need to continually build new stores in foreign countries; a website can deliver those sales at a fraction of the cost of operating stores.

Breaking the mentality of stores being the best approach to global expansion will be difficult as members of the senior management team believe a physical presence is the most powerful strategy for entering a new market (Raff, 2000). In reality this is by far the most expensive and riskiest strategy of all. Second, Borders has an exceptionally strong foundation of information technologies (IT) including a state-of-the-art inventory management system designed by the founders while attending the University of Michigan (Hayes, 2011).

The system, called Expert, is considered to be the best in book retailing worldwide, which is one of the primary reasons K-Mart bought Borders in 1992. K-Mart wanted to scale the Borders Expert System to approximately 1,100 Waldenbooks stores when the system has been successfully at just 22 Borders locations (Hayes, 2011). The Expert system is failing to deliver the scalability needed to support the increased number of Borders stores, and with Tom and Louis Borders gone, there is no one who has the deep technological expertise to modify the Experts system.

Instead of choosing to have Amazon host the Borders site as is being proposed today, it would better to reinvest in updating the Expert system so it is web-based, which would in effect challenge Amazon and their own recommendation engine. This would give Borders significantly more options in defining how their e-commerce strategy would complement and suppliant their on premise stores. Borders must get beyond the mentality that expanding with new stores is a scalable model and realize that customers are purchasing at an entirely new cadence.

Customers are also consuming books in entirely new ways as well. By reorienting the Borders e-commerce strategy for greater scale of catalog offerings and global coverage, a significant.