Brian Flood, Soe Hlaing, Wei Qian, Isabella Schambeck, Teo Tertel, Lauren Vang

VS.

THE DIGITAL DIVIDE

Borders Background• “To create richer, more satisfying lives

through knowledge and entertainment”• Founded 1971• 508 stores/20,000 EES• 2008 – Borders.com• Waldenbooks• Company Performance

• Strength + Opportunity– S = Experts in book industry– O = Partnerships w/ travel services

• Weakness + Opportunity– W = Don't have an eReader for eBooks– O = Digital book provider

• Strength + Threat– S = Community gathering place– T = Increased funding for libraries

SWOT / TOWS

Borders Diagnostics

DefenderInternational

ManagerFactory

EffectivenessLocally Stormy

• Founded in 1994 by Jeff Bezos– Plain and simple site

• Create “online community”

Amazon.com Background

“To be earth's most customer centric company; to build a place where people can come to find and discover anything they might want to buy online."

Vision

2008 2009 2010

Revenue (profit) 4.27B 5.53B $299M (Q1)

Sales 19.17B 24.51B 7.13B (Q1)

ROA 7.76 6.53 8.74 (ttm)

Market Share 61%

Company Performance

• Founder, President, Chairman of the Board and only CEO

• Forward-thinker, Innovative

• “Sharp-witted”

“I knew that if I failed I wouldn’t regret that, but I knew the one thing I might

regret is not trying.” – Jeff Bezos

Jeff Bezos

Internal Strengths Internal Weaknesses

1. Online user experience2. Market leader3. Large variety of products4. Innovative proprietary products5. Brand recognition6. Prices7. Secondary market8. CreateSpace print-on-demand publishing9. Strong CSR

1. Limited preview2. All orders must be shipped3. Online only accessibility4. Vendor relationships5. Inventory risk

External Opportunities External Threats

1. E-Books2. Educational book agreements3. Growth

1. Rising fuel prices2. Poor economy3. New technology4. Competitors5. Rapid expansion6. Security7. Government regulations

SWOT Analysis

TOWS Matrix  External Opportunities (O) External Threats (T)

Internal Strengths (S) SOExclusivity agreements with publishers

STRewards program for buyers

Internal Weaknesses (W) WOElectronic books (PDFs)

WT

TOWS Analysis

• Goals: Efficient & Effective– Unique experience shopping online– Low price leader

• Strategy: Analyzer with Innovation– Exploiting all resources possible– Innovated developments, such as the Kindle

• Environment: Varied – Seasonal sales– Technology– Foreign fluctuations

Amazon Diagnostics

Shared Attributes

Unique Customer Experiences

Brands & Reputations

Digital Media Market

Emerging Threats

Distinct Attributes

Space Utilization

Overhead Costs

Business Models

Innovation

Data Security

Shipping Dependencies

Borders vs. Amazon SWOT/TOWS Comparison

Goals

Effectiveness

Efficiency &

Effectiveness

Strategy

Exploitation

Exploitation & Exploration

Environment

Locally Stormy

Varied

BORDERS

AMAZON

Borders vs. Amazon BDO Model Comparison

DefenderInternational

ManagerFactory

EffectivenessLocally Stormy

Borders Misfits

Defender

EffectivenessLocally Stormy

ProspectorMulti-Domestic

Leader

InternationalManagerFactory

Borders Misfits

Defender

EffectivenessLocally Stormy

Office

ProspectorMulti-Domestic

Leader

InternationalManagerFactory

Borders Misfits

EffectivenessLocally Stormy

Office

ProspectorMulti-Domestic

Leader

Fit for the Future

• Partnerships with Travel Services– Preparation for travel or while in transit– Reinforce “HQ for knowledge and entertainment”

Recommendation #1

• Become THE distributor of eReaders & eBooks– new consumer trend for digital media– eBooks and eReaders already available

Recommendation #2

Questions?