Nov
14
Destroying itself: why did Borders go bankrupt?
Posted by: cyeungs | November 14, 2011 | Leave a Comment
In today’s fast paced technological world, one wouldn’t be surprised to hear book stores closing as they yield to tablets and e-books. However, Borders brought bankruptcy onto themselves. Disaster occurred through a series of bad decisions made.
Its first problem occurs simply on its location. The company tended to “pick B locations…and [tried] to turn these sites into A economics.” This became a major barrier of entry as its biggest competitor, Barnes and Noble, already had possession over all the better locations. Also, the company demonstrated poor market research as it invested in CDs and DVDs “just as music and movies were going digital”. Another main difficulty was Border’s insistence on using its outdated operating system for organization.
Border’s should have concentrated on generating relevant market research that followed the rising technology trends. It would’ve also minimized lost capital invested in failed projects like the CDs/DVDs. Also, the company could have taken advantage of MIS to prevent itself from becoming increasingly disorganized. Though the company tried to use the differentiation strategy by boasting a large selection of books, this wasn’t enough for it to secure the position of market leader in the industry. Had Borders re-evaluated its position as a company, perhaps it wouldn’t be in the process of being sold off to new investors as it is today.