Strategic analysis of Waterstones Essay
Strategic analysis of Waterstones
The growth in e-commerce for books and other media has caused traditional retail models to re-organise due to their weaknesses. 1Waterstones has moved from this traditional model into a multi-channel model that supports multiple points of contact for customers. 2 Value identification The main value adding activities that enabled this model focus on balancing the price and efficiency of online retailers with our traditional in-store service. The main activities contributing to the current value chain is our human capital and strategic alliances. 3
Managerial capabilities that led to the alteration of the distribution network, (The Hub), has enabled more independent branches and empowered branch managers to tailor stocks to suit local markets. By encouraging local characteristics and local interests Waterstones community responsiveness4 is improving in a market dominated by supermarkets with standardised selections. 5 The participation in various business networks through the formation of strategic alliances and collective strategies has, in recent years, provided customers with more value online and in-store:
Linkages with coffee retail franchises strengthened the existing offering in-store. Amazon has given Waterstones access to new technologies (Kindle) and licences that have improved online and in-store capabilities. These collaborative advantages have enhanced the long-term value to the customer. 6 Collaboration within these business networks has innovated aspects of the store design, staff skills and organisational structure. Value justification These two activities do add value by increasing the variety of products and improving the in-store experience to customers.
But the longevity and sustainability can be put under question. 7 The issue with some aspects of each value adding activity is that it can be replicated or substituted online. Any competitive advantage gained from strategic alliances may be limited by the non-exclusive nature of the arrangement. For example, Amazon can offer the same deal to other retailers on the same contract. The independence and localisation of branches to create community identity can to some extent be substituted online as e-commerce begins to incorporate social media into their offerings:
“Amazon Acquires Shelfari: Moves To Corner Book-Centric Social Networks”8 “Sainsbury’s buys HMV stake in Anobii”9 These online communities can engage with specific crowds, offer personnel recommendations and give expert advice through the networks supported by Amazon and Sainsbury’s. Strategic recommendation With the changes seen in the bookselling market and its effects on Waterstones competitive potion in my opinion we need to focus on improving the brand experience and offering. By making a more interactive, informative and atmospheric in-store environment. 10
The free Wi-Fi roll out over UK stores will allow patrons to download e-books and will be incorporated with a new print-on-demand (P. O. D) technology and editorial service in flagship stores. This will allow customers to also upload their own digital work and self-publish physical and digital books for personal distribution. This would involve considering companies such as Blurb11 and Kyobo12 who offer print-on-demand services for a small charge. I believe however it would benefit from being organically developed in-house, due to a weak organisational fits and need for cultural consistency. 13
I see the future capabilities and means of competitive advantage at Waterstones coming from its development of a culture that can inspire, encourage and serve the needs of a community of readers and authors. Investing and incorporating new media channels (e. g. a social media site) and new technology (For example a “range” of E-readers, P. O. D’s) will offer a valuable brand experience to compliment digital and print purchases. Bibliography A. Laing, Jo Royle, (2006) “Marketing and the bookselling brand: Current strategy and the managers’ perspective” Available from: http://www. emeraldinsight.
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