Chapter 10 Exercise 19

19. Research the rivalry and strategies being pursued by Amazon and Barnes and Noble. Look at market share and service plans and pricing. What are the short-run and long-run strategies of each company? Is one firm stronger than the other?

Obviously, Amazon is leading the way in digital technology, both in online sales and in sales of e-books. But, Barnes and Noble retains many of its traditional stores so it can provide local support. (BN also runs a bunch of college bookstores, giving it a presence in a lot of locations.) In terms of e-book readers, BN currently (2011) has the only decent color reader. It also supports the ePub standard, while Amazon uses its own proprietary format (and the Kindle readers do not use touch screens). But, Amazon is not totally digital. It also has warehouses that can ship any number of physical books. Amazon also has a huge Internet support presence and makes money by selling other objects and providing cloud services to other companies. Ultimately, this diversity probably makes Amazon stronger. It will be much easier for Amazon to give up paper books and emphasize digital. But, is that really going to happen anytime soon? (My guess is that it will occur much faster than people realize and pretty much overnight in a sudden shift, but I do not know the exact date.)