Case Study Undergraduate 577 words

Organizational Change Strategy for Borders Bookstore

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Abstract

This paper examines the critical strategic changes required for Borders Bookstore to survive the shift from physical retail to digital commerce. The analysis identifies three major areas requiring immediate transformation: reducing dependence on physical store expansion, modernizing the Expert inventory system for web-based scalability, and reorienting the e-commerce strategy to match evolving customer purchasing patterns. The paper argues that breaking ingrained organizational culture around brick-and-mortar expansion and leveraging existing technological infrastructure are essential to remaining competitive against online retailers like Amazon.

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What makes this paper effective

Identifies concrete, actionable problems rooted in specific company decisions (e.g., K-Mart's failed scaling of Expert to 1,100 stores, Amazon hosting dependency)
Acknowledges cultural barriers explicitly—recognizing that "breaking the mentality" is as important as strategic change itself
Leverages primary company knowledge (the Expert System's capabilities) to propose internally viable solutions rather than generic restructuring
Uses cost-benefit reasoning (website sales at a fraction of store costs) to justify strategic pivot

Key academic technique demonstrated

The paper employs organizational change analysis through a resource-based view, arguing that existing capabilities (the Expert System) should be leveraged and modernized rather than abandoned. It demonstrates change management awareness by explicitly naming the cultural resistance from senior management and the loss of original founders as obstacles. The argument flows from diagnosis (too many stores, failing IT infrastructure) to root cause (misalignment with customer behavior) to actionable recommendations.

Structure breakdown

The paper opens with a thesis statement identifying three required changes, then dedicates one section to each. The first two sections diagnose problems and propose solutions grounded in company-specific evidence (Hayes, Raff, Villa sources). The final section synthesizes these points by reframing the core challenge as a "cadence" mismatch between organizational structure and customer behavior. This creates logical progression from tactical fixes to strategic reorientation.

The Problem: Physical Store Dependency

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 ingrained 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.

The first and most significant challenge is the lack of operational scalability due to over-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 instead in initiatives that better match how customers purchase and consume books. By choosing 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 will be won or lost online, and the stores in place serve as a suitable 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 physical stores. Breaking the mentality that stores are 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.

The Expert System Opportunity

Borders possesses an exceptionally strong foundation of information technologies (IT), including a state-of-the-art inventory management system called Expert, which was designed by the founders while attending university (Hayes, 2011). The system is considered to be the best in book retailing worldwide, which was one of the primary reasons K-Mart acquired Borders in 1992.

However, K-Mart sought to scale the Borders Expert System to approximately 1,100 Waldenbooks stores, even though the system had been successfully deployed at only 22 Borders locations (Hayes, 2011). The Expert system began failing to deliver the scalability needed to support the increased number of Borders stores. Additionally, with the founders gone, no one possessed the deep technological expertise to modify the Expert system appropriately. Instead of choosing to have Amazon host the Borders site—as was being proposed—it would be better to reinvest in updating the Expert system to make it web-based. This approach would effectively challenge Amazon and its own recommendation engine, giving Borders significantly more options in defining how their e-commerce strategy would complement and supplement their physical stores.

Borders must move beyond the mentality that expanding with new stores is a scalable model and recognize that customers are purchasing books at an entirely new cadence. Customers are also consuming books in entirely new ways. By reorienting the Borders e-commerce strategy toward greater scale of catalog offerings and global coverage, a significant amount of investment in stores could be saved.

1 Locked Section · 186 words remaining

Reorienting Business Model and Customer Cadence · 186 words

"Aligning operations with new customer purchasing patterns"

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Key Concepts in This Paper

Organizational Change E-commerce Strategy Physical Retail Model Expert System Inventory Management Customer Cadence Business Scalability Digital Transformation Retail Competition