With the gradual deepening of cultural system reform, the traditional book industry structure, posture is undergoing a rapid change. Internal and external factors greatly impact traditional bookstores. In general, traditional bookstores are under harsh difficulty.
The book club, a small organization whose primary business revolves around publishing and retailing, is based in Huddersfield. The primary business of this bookshop is to sell books and normal hardcover/paperback books and publish science fiction and fantasy books. In the era of information and network, students have increasingly multiple requirements and channels for getting information. Coupled with the accelerated pace of life, the patterns and carriers of public reading have changed greatly, thus digital reading has become a new trend (Ashley & Tuten, 2015).
This paper uses a SWOT to focus on areas of strength, recognize limitations, and develop opportunities in the most promising directions. SWOT is an analytical model that can help the company combine strategy, internal environment, and external environment organically. This method has been widely used by an analyst to analyze the market environment (Crittenden & Crittenden, 2015).
Brand advantage: The Book Club has been a cultural landmark in Huddersfield for many years, which leaves a deep impression in the hearts of mass readers. This bookshop can be said to be accompanied by the growth of many readers, even to this date, it is still a priority choice for many readers. The book club had a reputation for inspiring people and encouraging independent thinking (Cvijikj & Michahelles, 2013).
Rich cultural atmosphere: The Book Club has been in operation for many years and has a good brand value. For centuries, bookstores were the main centers of bookselling and purchasing. Bookstores remain hubs for those who like the feel of holding a book in their hands and browsing the stacks to see before they buy. In the physical store, readers can closely get contact with the book, read the book, and understand the book deeply, which stimulates the reader’s strong desire of purchasing (Hays, Page & Buhalis, 2013).
Space-time limitation: Normally, the basic business hours of the book club are from 8 am to 9 pm, without the implementation of 24 hours a day business, thus it cannot meet the fast pace of modern consumers.
Rising cost: With the rapid development of the real estate industry, shop rent is also rising.
The main cost of The Book Club includes shop rent, labor costs, and tax. With the aging of the population and the gradual disappearance of the demographic dividend, the cheap labor period is gone, on the contrary, wage levels and labor charges continue rising. In addition, social development, and price inflation lead to labor and other property cost has risen dramatically, so the book club needs to bear a huge financial burden.
Physical books still have a market: physical books will retain significant value to a significant segment of the book-buying and reading public, especially among scholars. Physical books still have a large market and the scale will not disappear in the short term.
The college market is well-developed. The university market provides growth opportunities for The Book Club if schools keep on outsourcing their bookstore management. You can not only find a large selection of obvious joys to purchase but also encounter authors and take part in discussions (Hudson & Thal, 2013).
Fierce competition: In fact, The Book Club has many competitors in different industries, including traditional physical bookstores, online bookstores, large Dutch bookstores, etc. Perhaps some of the current and potential competitors have greater resources, longer histories, more customers, and/or greater brand recognition. As competitors step into the business combination or other coalition and set up firms in other market segments to expand to compete with the bookshop, hence competition may become intensified (Jung, Kim & Kim, 2014). Besides, emerging channels and media networks, such as e-books, and online books may increase the competition. The rise of online bookstores scattered customers, which led to the company’s operating revenue decreasing significantly.
Rich cultural atmosphere
Physical books still have a market
The college market is well-developed.
Drastic changes in the book market
On the other hand, this paper uses Porter’s five forces to analyze the level of the competitive environment of The Book Club to make better research and analysis.
New companies are always appealing to be profitable and have high markets return. This leads to many new firms’ entry into the market, which eventually will reduce profit opportunities for all firms in the industry. Customers’ shopping and consumption patterns have been greatly changed by the Internet and electronic commerce technology, people gradually prefer to shop through the Internet, and gradually enjoy the conformability and convenience of staying at home. Digital industry development is very attractive (Lamberton & Stephen, 2015)
Customers mainly adopt the way of lowering prices and razing the requirements to reduce company profitability. Direct buyers choose books in a physical bookstore directly, more with a purpose. Physical bookstore gives first place to auxiliary books, thus students will become the main group of buyers, but also led to some buyers in the bookstore cannot find the book they want (Lee & Jeong, 2014). The Physical bookstore cannot meet all the needs of consumers, this part of the buyers had to go through other channels to get their own desired book.
The emergence of online bookstores enables buyers to buy whatever they want at a special price usually. But due to the virtual nature of the network, buyers usually cannot get the real information about the book, so the physical bookstore has become part of the buyer’s “dressing room” and “experience shop”, At present, buyers can also use the phone to scan the cover, and then use the mobile Internet for the more cost-effective network to buy (Luxton, Reid & Mavondo, 2015).
The Book Club’s current and potential competitors include e-books and online reading. On one hand, with the development of science and technology, paper books have been gradually unable to meet the needs of some consumers, thus e-books are more likely accepted by consumers. Compared with paper books, e-books have a large amount of memory capacity and are easy to carry (Mooney & Slobodian, 2016). On the other hand, online reading attracts several students and young workers via its fast browsing speed and low reading cost. For this part of the reader, the information on the Internet is huge and updated quickly, which meets their desire to read in their spare time.
It is strongly believed that the main competitive factors in the physical bookstore include price, cultural atmosphere, and convenience. Additional competitive factors come from online bookstores, on the strength of convenience, low price, and fast speed. No matter whether it is good or not, as a new reading pattern, online reading is likely to replace traditional paper reading.
The supplier can impact a firm’s profitability and competitiveness in the industry, mainly by improving the price of input factors and reducing the quality of the unit value.
The bargaining power of the partners is weak because the bookshop provides long-term, stable customer resources to ensure the sustainable development of partners. In addition, the bookshop will play a promotional effect on the cooperation unit, equivalent to free advertising. Therefore, it is expected that the cooperative units would like to cooperate actively with the bookshop (Scott, 2015).
Certain competitors possess abundant capital; constantly swarm into the online retail market, such as Amazon. Besides, traditional bookshop retailer enters the online sale market, such as Wal-Mart (Stephen, 2016).
The book club is squeezed between large store retailers and online start-up retail enterprises, the latter has been making efforts to narrow the gap with the book club on the price, and the business is losing price advantage in certain markets.
The objectives of the marketing plan of the brand are designed based on the recommendations from the analysis of Porter’s five forces. Be more beneficial than they have to establish a good relationship with their suppliers and also should agree on a fair price so that it will be helpful for them in lowering the pressure from the bargaining power of the suppliers (Stephen & Lamberton, 2016).
The main objectives of the above-mentioned business strategy are as follows:
The following are the various business strategies that are proposed for the book club company so that it can gain a competitive advantage and improve its performance.
The book club is a small organization whose primary business revolves around publishing and retailing. Over the last few years “The Book Club” has struggled in a very competitive market, thus the company wants to make some transformation based on the original business. Aimed at attracting destination shoppers, The Book Club has a lower price structure: 15% off a selection of new editions, even up to 35% off all hardcovers, bestsellers, and special promotional items displayed in the center of the store. Bestsellers played an integral role in bookselling but were esteemed to account for only 10% of the bookshop’s sales. In terms of online presence, it is estimated that the average daily visits to The Book Club’s website are only about 2000 initially, but with the gradual development of an online presence, the average daily visits are likely to reach 10000 (Tirunillai & Tellis, 2014).
The Book Club are suggested firstly to launch a website that offers a place to chat online and order study materials, brochure, and newspapers as well as books for college students and help build an online business experience for The Book Club. Secondly, after obtaining some market power, the company should launch its transaction-oriented website, with a similar deeply discounted tariff mechanism. The book club’s business model revolved around a virtual storefront, but its operations had physical as well as informational elements, both of which were centralized in Huddersfield (Tsimonis & Dimitriadis, 2014).
After successfully creating the website, customers can shop at the book club anytime and anywhere. First-time shoppers must submit a simple order form with their names, telephone, address, and credit card numbers. Since the website has password protection, the information of customers will not have to be let out in the future unless an order is there to be transported to a different place (Tuten & Solomon, 2014). Customers will be continuously reminded of the prices and inventory status of their ordering items. Orders are confirmed online, and customers will also be e-mailed when their order is transported from The Book Shop’s warehouse.
To match the multiplex service development, The Book Club should do more things, however, instead of selling books only, it offers a series of services at the same time, including book information, communication with authors, book reviews, and recommendations from other customers and other media, links to other sites, new-release data, and a range of other daily features (Wirtz, et al., 2013). Two personalized services, such as Find and Seek, helped build traffic by e-mailing customers when books by selected authors, on selected subjects, or recommendations in selected categories became available. Click rate is also used as a measurement index, usually; a higher click rate indicates the high popularity of the website.
Generally, a business’s profit calculation is counted as follows: a business purchases materials or services, thus incurring costs. And then it sells products or services to customers, thereby obtaining revenues. To predict the company’s profits, The Book Club can make rough estimates of anticipated expenses and profits.
We expected that, after expanding its online presence, at first, the business’s revenues would double in size every 5 months and revenues of the first year will reach $1 million. By 2020, book sales will grow by 20% a month. During this time, the firm will be able to attract and raise substantial funding from the venture capitalist (Zadeh & Sharda, 2014).
With the online business, the original customers have a more convenient way to purchase books. With the method of combining online services and offline services, by 2020, the number of customers will increase dramatically; growth is likely to reach an average of 8 percent by 2020.
The growth forecast suggested that The Book Club will achieve sales of 1 million books in 5 years, with a net margin after tax of 10% of sales. At that time, The Book Club will be expanded to around 10 cities and will enjoy a staff of around 50. The founders will provide start-up capital amounting to 50000. The Book Club is looking for investors who know the sector well, and who can actively support the team in building the business.
The business strategy has been recommended for the company the book club and the objectives have been set for their new launch of the website. After this planning and implementation of the business strategies were developed. It includes:
Website or App: It is the visual content of the company information. It consists of animations, images, videos, and texts about the books (Connell, 2013). The website color should be selected in such a way that it should be appealing. So bright colors are preferred mainly blue in comparison to various other colors. Bright colors are chosen as they will tend to attract the eyes of many individuals. Therefore, most people will like to have a look when the website’s Bright color (Yi, 2016).
On the web page, the cover pages of the various types of books are to be displayed. The categories of the books should be represented by the cover pages such as academic books, religious books, fiction, children’s books, and motivational books. In addition to this, the price of every book has to be indicated on the cover page. The provision of viewing the preview of the book just by clicking on the cover page is provided (Zheng, et al. 2015).
Newsletter and Social Media: The Company has to release a monthly newsletter about the new editions of the books. The products that it is going to introduce have to be mentioned in that beforehand. This will give, better publicity and hence the performance can be improved. The subtitle of the book along with the physical address of the company the book club has to be given on it. This will be easy for new customers in locating their shop. In the newsletter announcement of the upcoming books can be noted. In present days social media is the technology that is being used by every business for enhancing their performance (Zheng, et al. 2015). Hence this would be the best opportunity for the book club to promote their website. This can be done just by making a small video with attractive visuals and by providing content information in short about the web page and books (Vasileiou & Rowley, 2011).
As a part of the measurement strategy, the performance metrics of the company and the book club are to be assessed. For measuring the sales the end action rate will be used and the profits are measured at the end of the financial year. This will be indicating on whether the book club can achieve its objective of gaining 20 percent profits (Sair & Shoaib, 2014).
The other performance metric that is used is social sentiment. This will be used for measuring the quality of their web page based on the comments that have been left by the customers (Henri, 2004). This will help to measure customer satisfaction with the product / Service.
Based on the count of the number of mails submitted by the customers the potential clients are measured.
Performing the SWOT analysis and the analysis of Porter’s five forces was found to be significant as it gives information on the development process. The tools used for analyzing this market have given enough information for critically evaluating the success of the Book club (Zadeh & Sharda, 2014).
Along with the development of the new economic environment, the entity bookstore is in a dangerous position for more absorption of accessing knowledge. This paper uses Michael Porter’s Five Forces Model and the SWOT analysis to analyze the competitive environment of the entity bookstore and found that it is very serious. Therefore, The Book Club needs to change the existing business model and make a combination of online and offline ways. We forecast that the number of customers will increase dramatically until 2020; annual revenue is estimated to reach 1 million per year until 2020. Finally, it is concluded the entity bookstore has changed its operational strategies, innovative business model, and improvement of ‘reading’ service to adapt to the development of the Times facing the impact of the new economic environment.
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