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 Identification of Problem

Crandall University Bookstore is engaged in providing textbooks, and non-textbooks to the students. The university offers traditional help to students enrolled in undergraduate courses, graduate courses, and others. The university is one of the leading academic institutions in Canada. The institution also offers non-student users of the book store to explore other non-academic books like Christian fiction. To manage the operations of the bookstore of Crandall University, a bookstore manager Amy Pattison is hired. The newly hired manager faces various challenges in the management of the bookstore of the university. One of the problems that are faced by the manager is that in the era of technology and computerized system, all the accounting systems and management of inventory is carried out manually. There is no record of inventory and accounting information and data on the computer. Only the data related to the revenue of the bookstore is stored on the computer.

The manual system of managing the inventory and accounting creates trouble in the bookstore. The other issue that has been arising in the bookstore is that it has a very limited amount of product lines. In the bookstore, there is very limited stock of non-textbooks items that can be explored by other individuals than students. In the bookstore, there is very limited branded merchandise of the university available because the previous manager of the bookstore did not see this as a worthy and effective product line.  The other problem that was identified is that there is a limited staff- of persons who perform the bookstore activities.  The business environment in which the retailers of the campus performs their business activities, has substantially changed. Due to substantial changes in the environment, they have to face competition from non-traditional players in the bookstore market.

In addition to this, due to a lack of staff members, the activities of the bookstore were not properly managed and performed. There is no accountability and responsibility assigned to the staff members for any particular task that was performed in the bookstore. There are many organizational issues that were identified by the new manager and they need to get resolved immediately so that the activities of a bookstore can be managed effectively. Another challenge for the manager was that the total sales of textbooks includes the books for both traditional undergraduate degrees that is provided by the university itself and the degree of bachelor of arts that is provided by the Adult Learners Professional Studies (ALPS) program The program of ALPS consists comprehensive structure of pricing that includes the price of textbooks, a tuition fee, and other fees. This shows that the sales of ALPS textbooks are impacted by changes in enrolment of the student. In 2013, the university has a challenging phase in which ALPS student enrolment was reduced significantly which affects the decrease in the sales of textbooks and affects the overall picture revenue of the bookstore. Another challenge that was identified by Amy (bookstore manager), many book readers use a laissez-free approach to ordering textbooks. But their request was not submitted till the deadline. This leads to the laborious process of over-emailing and telephoning and also it downsizes the respective needs of the professors. One of the issues revealed by the manager was that due to the popularity of the digitalization or online trends, the book readers and other students show less interest in issuing books in offline mode and this can decrease the demand for issuing study material and other academics books from the bookstore of the university. As all the books and study material are also available in digital mode in the form of e-books, this can reduce the demand and interest of book readers from bookstores.

Analysis and Evaluation

On the basis of the given scenario, the objective of the Crandall university bookstore is to provide study materials, academic reading materials, textbooks, and non-textbook to the students or other readers. With the help of Porter’s five forces model, the business scenario of the bookstore can be easily understood. The narrative of the bookstore involves all the information that is related to the business operations of the college bookstores. Major attention was paid to the acquisition of the textbooks and sale of the textbooks that will help to generate a substantial amount of revenue. To formulate the strategies for the bookstore business, the manager has to understand the environment of the industry and the risk that is associated with the business. To identify the existing risks in the business environment and to know the market, Porter’s five forces model gives an excellent framework to identify the business risk. In Porter’s analysis, the following are the factors-

  • Industry Rivals– The rivalry in the industry is due to many reasons like the Growth Rate of the Industry. The industry of bookstores the university is not in a growth stage, it is in the maturity phase and the demand arises to have flattened. There are chances of new entrants in the market which increases the rivalry in the market. The next that comes on the list is High fixed cost. The bookstore business involves a high fixed cost. To cover this, the bookstore needs to increase the volume of sales so that it can meet the operational cost. Product Differentiation. It is difficult for the business of bookstores to compete in the market through product differentiation. There is very less scope to introduce product differentiation in the case of bookstores. Brand Identity. When the customers emphasize the brand preference and stick to the particular brand only, this reduces the competition and rivalry in the market. There is a positive point for the business that builds its brand value in the market. Exit barriers. In the case of the bookstores of the university, it is easy to exit from this industry but the exit is not a wise decision as the bookstores involve high infrastructure costs and other operational costs
  • Threats of New Entrants- When there is a threat of new entrants into the market, there is a chance of technological advancement in the market that will increase the competition in the market. It also creates ways to compete in the market without incurring the cost of mortar and bricks that is associated with the traditional players. Proprietary Product Difference. The products that are offered to the customers in the market are unique and different, but the level of interchangeability occurs for those students who want to try other alternatives. Brand identity. As discussed above the bookstore of universities are centrally focused and positioned in their respective academic institution, and the students do not emerge from the brand insistent. Capital requirements. In the market, the traditional competitors involve a certain level of the fixed cost of their business operations and it requires less capital to compete in the market because of the fewer innovations and modernization. Access to distribution. The traditional model of retail distribution is introduced in the market, there is a chance of new entries in the market due to technological advancements and innovations. Policies of government. Presently, there are no government rules and policies, that can protect the developed or established competitors from new entries into the market.
  • Bargaining power of customers- the customers for the universities are the students who enroll in the courses like undergraduate and postgraduate and they need study materials for these courses. Output differentiation. In the bookstore, the textbooks are differentiated according to the subject, it fact is that they are also available in other outlets, so it is difficult for the university bookstore to differentiate on the basis of the product. Cost of switching. As previously discussed, if there is a delay in the delivery of the product, or the product is mismatched, there is the chance to switch to another retailer that has a comparatively low cost. Substitutes in the market. In the market, there are very few substitutes and alternatives in the market. A student has very few options if they want to switch to the other book retailer. Significance of volume for buyers. It can be seen that most of the students need one or very few study materials like textbooks per course. So, the volume is not taken into consideration by the customers. Profitability of buyer. In the case of profitability of the buyers, the students are not in a profitable situation as they are price sensitive and conscious about their financial position. Fear of backward integration. Students are not centrally positioned to integrate backward into the model of the business
  • Bargaining power of suppliers. The factors are affected by the number of suppliers of key inputs. It addresses how conveniently the suppliers can cover the cost of inputs. In this list, the first comes is the Differentiation of inputs. Bookstores have less control over the products of textbooks they sell. The decisions regarding the products are made outside the operations of the business and with the exception of stores that used o maintain the inventories, they have to purchase only what the suppliers have for sale. Cost of switching. Switching suppliers is not a wise option, the bookstore should order. Product substitution. As discussed above, there are few substitutions in the market, and specially for those textbooks that are chosen by professors in the university. Impact of inputs on cost and differentiation. In the bookstore, the textbooks play a vital role in the revenue generation of the university. As 87 percent of the revenue generates from the textbook category. Industry concentration versus Supplier concentration. The industry is dominated by large supplies, and the presence of alternatives like rental and used is having a mitigating effect. Cost relative to total purchases in the industry. Bookstores affect the prices of textbooks irrespective of their importance or magnitude of the core business.
  • Threat of substitute products– There is always a threat of switching on substitute products by the customers that is available in the market. This includes the following points. Switching cost and Relative price of performance of substitutes. The sub-factors have a marginal impact on the absence of product substitution. The propensity of the buyer to substitution. Price sensitivity forces students and customers to engage in substitutes or other alternatives if available in the market.

SWOT Analysis

Strengths- Crandall University is one of the leading institutions in Canada. The institution offers academic study material through its bookstores to the students. The strengths of the university include that the prices of the books and study materials are reasonable and economical that can easily affordable by students. Focused on offering quality study materials and textbooks. The students were more likely to purchase the textbooks for the courses in which they enrolled. The bookstore offers textbooks to make it easy availability of study materials.

Weaknesses- the weakness of the bookstore of the university includes only the textbooks and study materials that is related to the courses of the universities. It has less or very few collections of other books like religious and fictional books and also non-academic books.

Threats- one of the major threats for Crandall is the entry of new substitutes into the markets. There is a chance of new entrants in the market that can increase the competition and also can switch the customers to the competitor’s product or services. The competitor can take advantage of selling non-academic books in the market.

Opportunities- By offering non-academic books like religious books or Christian religion books, the university can take advantage of the market. By reducing the cost of the study materials, the university can attract more students to their bookstore.

Discussion of alternatives

In the above scenario of Crandall University Bookstore, the analysis of the business is conducted with the help of SWOT Analysis and Porter’s five forces model. Both two methods help to identify the business position and the current situation of the bookstore in the market. There are alternatives for the bookstore that can help the institution to grow in the market. The first is to offer non-academic books also to the students and other customers. There are also other readers who exit the market who are not enrolled in the courses of the university but want to read other books. For instance, the bookstore should also sell religious books and increase the stock of religious books as compared to the books related to business and science. From the given scenario, it can be seen that the demand for books based on science and business has less demanded and religious books have more demand. It can also be seen from the financial data of the university that, the highest revenues are generated from the sale of textbooks, so the institutions should permanently stick to the sale of textbooks.

The institution should cut or reduce the cost of study materials and textbooks that are highly demanded by the students to induce or inspire the new students to purchase the books. The students and also the other customers are price sensitive, little increase in the price of the product can shift them into other alternatives in the market. So, the manager should make sure that their product’s prices are reasonable and easily affordable. Due to the popularity of digitalization and the availability of e-books and online study materials, which is very cheap in price compared to the offline mode of purchasing books from bookstores and other publishers. The institution sells the books at a low and economical price so that the customers did not switch to online study materials.

Recommendations and Implementation Plan

At the end of the report, there are some effective recommendations for Crandall University, which are totally based on the given scenario, that should be opted by the manager of the bookstore to compete in the market. To attract and inspire the students of the institution for purchasing the books for their respective courses, the manager should lower and cut the prices of the books. The manager should also focus on the sale of textbooks. As the textbooks contribute the highest to the revenue of the institution. The manager should also pay attention to the variety of books and the product differentiation in the bookstore. Other readers other than students, likes to purchase religious textbooks, so she should increase the stock of religious textbooks as compared to the books based on business and science that are less demanded.

In addition to this, the manager should also focus on the product line of the university. For the promotion and generating awareness about the products and services of the university, the manager should also pay attention to the product lines like used books, making a logo and mugs of the university, branded clothing of the university, non-academic books like fictional books, selling of DVD’s, etc. The manager should also include the Bibles for the no-academic readers in their inventory. For the entire management of the inventory of the bookstore, and to manage the complete record of every product, the manager should formulate strategies and should delegate and distribute the work in the bookstore. To manage all the business activities, the manager should distribute the responsibilities to the staff members, and also hire some new personnel for the bookstore.

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