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Better World Books Case Solution

Solution Id Length Case Author Case Publisher
2016 4418 Words (14 Pages) Michael I. Norton, Fiona Wilson, Jill Avery, Thomas Steenburgh Harvard Business School : 511057
This solution includes: A Word File A Word File

The case is about a business issue faced by “Better World Books”, in terms of challenges facing its business in the coming future. Better World Books has a unique model, which is although for-profit, but it has a significant element of partnering with major non-profit ventures. A considerable part of the income is contributed towards charitable initiatives, for the purpose of bringing about improvements in society. It is also known for reusing old books, through a recycling process, to sell to different customers. Xavier Helgesen, the co-founder of the company, was facing the dilemma in view of the changing taking place in the market. This is particularly in consideration of the new types of books coming in the marketed, and sold through technologically innovative channels, endangering previously common traditional marketing channels like retail stores.

Following questions are answered in this case study solution

  1. Introduction

  2. Challenges/Dilemma/Opportunities

  3. Major Events and Facts

  4. SWOT Analysis & PESTLE Analysis

  5. Research and Analysis of the Situation

  6. Formulation of Solutions and Answers

  7. Discussion and Selection of Solutions/Answers

Case Analysis for Better World Books Case Solution

The business model of the company has various important dimensions. An important element is the collaborative framework that t has developed with renowned non-profit ventures in the society. In addition to this, Better World Books also relies a lot on the book-collection drives on college campuses, as part of its important policy of using used books. It also makes use of the online channels to market its books, in order to make effective use of the new and enticing marketing channels. Thereafter, a certain proportion of money is given to the specified non-profit partners. Over a period of time, a lot of changes have taken place in the market for books. Old books were increasingly becoming irrelevant for the new readers. Along with that E-books have also provided an opportunity to readers to enjoy reading without the need to create a physical storage for different books, and technological changes have helped in bringing about such a scenario. Nonetheless, the company has successfully achieved scale, and that also with maintaining its commitment of making efforts of creating a more literate world, for a better future. However, the company has to revisit its business dimensions, in order to develop its financial base in a sustainable manner, keeping in view the future market place. The following components of this document will focus on the challenges facing the company, and also the opportunities that can be used by the company for a sustainable future. This will also be supported by some facts and details about the company, in terms of the major events that took place since the beginning of the operations of the company.

2. Challenges/Dilemma/Opportunities

The major dilemma is to continue operating with the same commitment and business model, as it had done in the past. Seemingly, the business model is becoming obsolete, as new marketing channels are coming into existence. It has also become difficult for the business to develop a suitable financial base, keeping in view the evolving dynamics of the industry. The company’s commitment to continue to invest in its charitable initiatives has left little room to continuously invest in the technological infrastructure of the business. On the other hand, E-commerce giants like Amazon have been quite adaptive to the evolving dynamics of the industry. Considering that it is already a low margin industry, Better World Books is compromising on earning extra revenue, as it is investing on various charitable initiatives. The business is also less flexible in terms of fully utilizing the developing opportunities at the marketplace. For instance, it was reluctant in investing more on selling new books, as it would threaten its original business aspect of selling used books. The company could have earned a higher margin on selling more new books in the market. It is an essential requirement that the company should strive towards achieving a balanced strategy on pricing and types of books to sell in the market through different channels. Keeping in view the increasing number of players and marketing channels in the industry, it is particularly important for the company to make optimal use of the opportunities at hand.

On the other, it has a lot of opportunities and positive aspects that can be capitalized for the progress and development of the overall business. In the short-term, it can focus towards selling relatively more new books, as this trend might continue to flourish, and if the company ignore this aspect, it might be costly for it in the future. Apart from this, it can also further develop its brand image by projecting it in the digital media. This can be helpful for the business, as it can help the business successfully develop a niche market for the used books that it specializes in selling. Moreover, technological innovation in the digital space can help propagate the vision of the business at a much wider scale across the globe. This can be beneficial for the business in the longer run.

3. Major Events and Facts

Helgesen and Fuchs founded Better World Books in the beginning of the 21st century. Interestingly, one of their first initiatives was to utilize the evolving use of internet in developing a rating site for evaluating college professors, thereafter, they sold books online for the purpose of meeting their needs. Helgesen was extremely thankful of South Bend, Indiana community, for giving him the financial assistance in his undergraduate days. From the very beginning, Helegsen focused on collaborating with non-profitable initiatives. This, eventually, an extremely important business dimension for the company. Another important aspect of the vision of this business was to promote literacy in the most adverse countries across the globe. Since the inception, efficient operations was important to sustain the business model. Therefore, it was important for the venture to inject financial resources in them, in order to prepare them to evolve in its effectiveness. However, traditional venture capitalists were reluctant to provide them with the desired finance. It was able to secure financing from Good Capital, which specialized in investing in social ventures, and it contributed $2 million of funding in 2008. The overall developing external market conditions of cause-related marketing and corporate social responsibility contributed a lot towards providing a sound foundation for the business, and helped in providing a suitable brand identity for the business.

The book market, as of 2009, was estimated to be $20 billion - $30 billion. In 2010, bookstores were still the most common sales channel for consumers, with Barnes & Noble being the leading player. At the same time, it was estimated online readers were around 25% of the readers. It is considered as a high volume low margin business, with Amazon accounting for 10%-20% of the business. As far as the used books are concerned, it has generated an estimated $2.2 billion from the sale of the books. A lot of changes were taking place in the overall market, in terms of development of new channels. The company was developing various channels of acquisition, for the purpose of creative profitable marketing niche. The changing dynamics of the industry created pressure on the company to adjust to these trends. For instance, it also started emphasizing on selling new books. However, the dilemma was created when it was facing difficulties in developing a balanced strategy, which can allow it to appropriately manage different aspects of its business model, considering these evolving dynamics of the marketplace.

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