2.1 Explain BORDERS’s Competitive Advantages
Borders Group, Inc. was the nation's second largest retailer of books, music, and other educational, informational, and entertainment products. The group which was founded by brothers Tom and Louis Borders in 1971；(Zappone, 2011) only had a meager stock of used books which located in two rooms in the State Theater. From there the brothers soon moved and expanded to the world quickly.
2.1.2 Competitive Advantages
Competitive advantages-when a firm implements a strategy that creates superior value for customers; competitors are unable to duplicate it or find too cost to imitate it. To be better understood and analyze the ...view middle of the document...
They were the foundation for Border to expand its scales, made it enter into the world market and developed the competitive advantages.
b) Industry Environment
An industry is a group of films that produce similar products or offer similar services that are close substitutes. Compared with the general environment, the industry environment has a more direct effect on the firm’s strategic competitiveness and ability to earn above-average returns. The Five Forces Model can be used to analyze the industry environment.
Terms | Explain | Examples |
1. Threat of new entrants | In order to compete with the superstores of the Border, the entry barriers were very high in 1990s. | The AmazonPacific Equity Partners |
2. The power of suppliers | With the economies of scale, the Border established a lager supplier chain. It much more decreased the power of suppliers. | The border also owned itself printing industries. |
3. The power of buyers | With the high service quality and comfortable reading and environment, the buyers rarely care about the price | During the 1980s and 1990s, the sales of the Border increased nearly 60 times |
4. Product substitutes | In the 1990s, there were no e-books, e-reader device or the substitute app. | This time was infancy of e-books |
5. The intensity of Rivalry among competitors | Due to the rapid development, the Border came into the front stage and became the target of the rivals. | RedGroup Retail quickly copied the strategy of cooperated with Starbucks. |
* Internal Analysis
The internal environment consists of resources, capabilities & core competencies. The resources can be divided into tangible and intangible parts and the aim of this analysis is to discover the core competencies and to get the competitive advantages.
a) Unique Resources
The Borders name is associated with superstores, which is catering to book and music lovers, with a wide selection of hard-to-find titles and tapes as well as a growing number of varied forms of electronic media. It owned 116 superstores around the world and provided customers with plentiful sitting and browsing areas, a well-versed customer service team, and even espresso bars featuring live entertainment. (Judd 2009) Its first superstore prototype was 30,000 square feet of space with more than 128,000 book titles and about 57,000 prerecorded music titles, which was substantially larger than major competitor Barnes & Noble's megastore. (Mirian 2011) Due to these competitive advantages, it soon came into the front stage among the rivals and expanded to the world quickly.
Intangible -Human Capitals
As an international book and music retailer, Borders Group Inc. employed approximately 19500 around the world in the heyday. The Border established a special department under the human resources, which was responsible for recruiting and training. Most of their employees were full-time and...