Waterstones was founded in the year 1982 and have over 300 stores in the UK. It deals with books, stationary, DVDs, and eBooks’. Waterstones also provides an online service whereby customers get the chance to preview, rate and buy books. The Online service gives the business opportunity on the ways on how to improve their service to customer’s based on the rate of the service they are giving. When the company failed to survive during the recession, it decided to go into partnership with Amazon. The deal was part of a wider attempt to transform customers’ experience in Waterstones stores, including an expanded range of print titles and the introduction of coffee shops. Alongside the Kindle devices, Waterstones is to sell eBooks’ over newly installed Wi-Fi networks in its shops
The failure of the business made it adapt to changes within the management line, as some stores were forced to be closed down. Stores were selected due to product cycle and demands from consumers, to determine closure. The company focused on dwelling upon the settings of the stores and dismissed the real problem which was the lack of focus on the booksellers’ relationship between the readers. This brought about internal and external problems to the firm. The fact that it was a slow market movement as well as had potential to enter another market such as the digital market did not save the company from recession. Waterstones also distributed stocks to retailers, such as HMV which lend to closure, affecting their profitable income. The company at this present time is still within the development process as it is still suffering from low profitable income.
Currently Waterstones are looking at strategies to help reform the organization. They developed various strategic ideas using trials. The suggested strategic solutions developed were:
Opening cafes, which are surrounded with books because Conversation as you buy your latte, is often about books.’
Waterstones also started to input audio playbacks online, which allowed books to be preview before being purchased. This enabled consumer’s can read books on line for a few minutes to get a feel on what the is set to be like.
Providing loyalty cards – By having loyalty cards, they feel they can engage more readers that will purchase If they feel important
Feedback from consumers – allowing customers to have a voice within the organization.
The issue was worthy of investigation because despite there being many issues that developed from researching the business, it was the most interesting issue to find a solution to. Finding a solution to this key issue gave a positive impact on the remaining. This provided the most suitable solution for the company because the position of the book market has not been at its best but has risen since 2007.This demonstrated potential solution waiting to arise. This market is also different and has with it both internal and external issues, that has been globally exposed.
The choice of tools and frameworks used should be versatile. For starters, the two tools applied were Value Proposition vs. Customers Needs
The reason why Waterstones is struggling and has not succeeded is because it does not apply appropriate strategies. Based on its value proposition, which points a strong factor, it is clear that Waterstones location is restricted however in the customer’s needs cycle it displays a variety of customers they claim to be catering towards. The locations are placed in area s such as shopping centers but only main shopping centers, which excludes some customers but creates their value.
The customer need cycle looks at a range of customers and because of this the price charge are varied as they have not identified the market segment they are at. Because of this issue they have been unable to move forward with time as they have not yet establish the group as well as where they want to go. Both tools identify there is no age neither gender, so method needed need to be versatile.
From both tools, it is clear that Waterstones need to incorporate a focus strategy to begin with, and then it can progress to change the strategies as the need of the customers change. The value chain display how they are limited to resources used to advertise as it is not being used well. Both tools manage to only look at the organization externally, so this could only be part of the problem the whole.
Another tool applied was the Porter 5 forces which outlined both internal and external errors seen in the organization. The key points gathered from this tool where Buyers do not have much control in the book store department to affect the price because customers are broken up into different groups which makes it hard for them to come together to create bargaining power. Also, the Commercialization of the sales of books online posed a lot of threat, and could have a major negative impact on book stores such as Waterstones. These negatives impact could be loss of sales which could in turn be the reason for the stores to close. It was also established that in dependent publishing and suppliers are more favorable to book stores like Water stone’s because it is cheaper than dealing with book retailers and suppliers.
Based on these key points, it was imperative for Waterstones to focus on customer segmentation so as to strengthen the needs of customers by providing the suitable product or service. It was also crucial to observe the customers life style on pricing so as to develop products similar to their lifestyles. Water stone’s also needed to understand what is working well for competitors, and not for them so as to develop products similar to competitors to gain new users.