Competitive analysis frameworks and applications

Competitive Analysis: CanGo, Amazon.com and Barnes and Noble

Amazon.com Overview - Amazon.com has surpassed all other competitors and is now the largest bookstore in the global marketing arena. Their marketing and particularly their smart algorithm has virtually ended the era of the brick and mortar bookshop and indeed changed the publishing world and the way consumer's shop. Because of their unique technological advantage, Amazon is able to switch its strategy with almost the touch of a button, and has such a sophisticated set of algorithms that it is almost as if one has a personal shopper at all times -- and not just for books. Clearly, the model is successful in that Amazon.com posted revenues of almost $50 billion in 2011, with trends in 2012 showing consistent growth (Rosenthal, 2009, amazon.com, 2012).

Amazon has differentiated itself from literature and books to groceries, clothing, gifts and even electronics. For example, Amazon's Kindle is the obvious current market leader. It is positioned as the industry standard with easy access to materials, texts, and most of Amazon's catalog. The focus seems to me moving in a price war with Sony and Nook as "More for Less," with Amazon's edge continually selling out when a new product is unleashed. The Kindle will likely remain a unique brand, but again, it seems that the overall strategic plan is to increase the intangible segment and sales growth over the mechanical, or tangible. The current price war is also changing the market; depending on which unit and which comparison, Amazon is trying its best to get a Kindle into everyone's hands at a fair price. Some analysts note that at the current pricing, it is almost a wash (e.g. little profit), but pushing up ancillary sales (Anderson and Metz, 2010).

Barnes and Noble Overview - Barnes & Noble, Inc. is a book retailer in the United States that primarily operates through its chain of brick and mortar bookstores. The company posted revenues of $7 billion in 2012, and is best known for large, rather upscale retail outlets that typically contain a Starbucks Coffee restaurant. As of July, 2012, the company has 689 domestic stores and 667 college book stores -- but only in the U.S. Their online presence is primarily focused on their competitive product to the Amazon Kindle, called the Nook. While consumers can shop online for books, the site is not as intuitive, nor is the focus for B&N to have its customer base is primarily online related. Instead, all its promotional strategies are designed to drive traffic into the brick and mortar location where the Nook can be demonstrated and kiosks and advertising promotions for books and magazines are more effective (www.barnesandnobleinc.com; St. John, 1999).

As a strategic venture, B&N decided to push an Android-based book reader beginning in 2009 -- the Nook. This was based on a competitive look at the market, as well as the company's belief that textbooks and other non-pleasure reading material would be going electronic almost exclusively in the next decade. The Nook allows a read in store provision, allowing any customer to browse books for 1 hour while in the store (again, driving customers to the brick and mortar). Nook competes with Kindle almost directly, and in 2012, Microsoft invested $300 million for an 18% share in nook, thus valuing the Nook segment of the business at almost $2 billion (Ovide and Trachtenberg, 2012). Recently, B&N's strategy was to introduce an ultra-competitive 7 and 9-inch tabled called the Nook HD (Pierce, 2012).