Borders bookstore operations and its trajectory to extinction

An article in bloombergbusinessweek (nov14, 2011) describes supply chain choices by Borders bookstores in its path to extinction. The company’s origins and growth were fueled by careful title sales tracking and inventory management, but its merger with Waldenbooks created an unwieldy inventory system that could not integrate the stores. Locations in less than prime locations, close to Barnes & Noble locations, hurt store traffic.  The large SKU selection, more than 140,000 titles, wasn’t considered by customers as significant. The company’s use of cash to buyback stock eliminated the cash cushion required to pay publishers in advance of retail sales, and got it to run out of cash.  Do you accept these operational choices as the cause of the company’s extinction? Could these choices be perceived as prisoners dilemma choices i.e., forced by the success of Amazon and Barnes & Noble?  Given the statement by the article that many stores remained profitable and recorded growth until the end, do you agree with the thesis that smaller bookstores will be the new trend i.e., back to the past?

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About aviyer2010

Professor
This entry was posted in Ecommerce, Operations Management, Service Operations, Supply Chain Issues and tagged , , , , , , . Bookmark the permalink.

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