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Executive Summary Book retailing industry has very thin profit margin and is very competitive Amazoncom Amazon hereafter and Barnes Noble BN hereafter represented two distinctive business strategic models After careful examination of ITs function in each model we conclude that in the long run BN will dominate this industry as BN gradually incorporates Amazons Internet-based commerce into its traditional brick-and-mortar retail 1-1 Competitive Environment ltAmazongt Amazons main threat comes from substitutes Although Amazon has been spending heavily on marketing some customers are still in favor of shopping at BN bookstores while chatting with other book-lovers Threats of new entrants are also obvious As Amazon rapidly expands business into products other than books it becomes a new entrant to those areas and has trouble creating meaningful brand recognition On the other hand many new entrants are mimicking Amazons business model trying to steal some market share Rivalry among existing competitors is getting fierce because other smaller e-sellers are forming alliances to take on the market leader and the current online retail monsters Buycom is growing fast as well Bargaining power of customers is not a pressing issue whereas the bargaining power of suppliers is quite powerful Amazon cant get large quantity discount due to low inventory and the nature of small retail orders ltBarnes Noblegt Since BN and Amazon are competitors in the same battlefield the threat of substitutes and new entrants for BN are just those fast growing on-line retailers Moreover other retailers selling other consumer products might also sell books and erode the market share of BN Rivalry among existing competitors is also fierce Borders the second largest brick-and-mortar chain in the US is instead going globally in the old-fashioned way by opening overseas stores Bargaining power of suppliers is very low since BN has been successfully using its size to command discount from suppliers 1-2 Value Chain and IT ltAmazongt In terms of inbound logistics and operations Amazon
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