Individual Case Analysis-Better World Books
INDIVIDUAL CASE ANALYSIS-BETTER WORLD BOOKS 8
Better World Books’ Vision, Mission, and Core Values
What are the vision, mission, and values of Better World Books? Critically evaluate them. Are they helpful to the company’s leaders in formulating strategic intent? Why or why not?
Better World Books is a corporation that was founded as a “Bcorporation”, a company that is committed to its incorporationdocuments to achieve a triple financial bottom line, social, andenvironmental performance. Better World Books mission is to become aworldwide bookstore, which aims at harnessing the power of capitalismby bringing opportunity and literacy to the people around the world.The bookstore vision statement is to collect and sell different kindof books online in order to fund literacy activities worldwide. It isalso a triple-bottom-line, self-sustaining company that createseconomic, environmental, and social value for all its stakeholders.In addition, the bookstore’s core values include: Customer focusthe bookstore is driven to offer customers a highly-valuedexperience, one that gives them a chance to align their deedsalongside their values. Also to offer a favorite marketplace andtheir partner in everything they do (Henn, 2009). People matter theyalso seek out talented people that work hard to invest in them. Theyalso aim to respect every individual, celebrate individual and teamsuccess and reward achievement. The Better World Books is also morethan a business. Of its mission, vision and core values, yes, theyhelp the company’s management in formulating their strategic planby considering their shareholders, employees, customers, planet, andcommunity equally. Through their business, they strive to affordpeople to make sustainable positive changes.
Over the last few years, the company has grown tremendously from asmall niche player that used to frequent colleges and universities tobecome one of the most widely known social-entrepreneurship firms inthe United States. As evidence to its success over the years, thecompany has generated an approximated 45 million dollars in revenuesfor 2010. Over that period, the company has also raised close to 9million dollars for saved countless books, charities, and literacyadvancement around the world (Henn, 2009). From its successevaluation, it is evident that the company’s leaders are happy withthe progress but they are still the steps carried out to formulatestrategic intent. This is because they are demanding to know how Mr.Murphy, its Chief Executive Office is planning to scale up thecompany to realize its future growth triple-bottom-line continuingresults. For instance, Mr. Murphy is wondering how much growth insocio-entrepreneurship its leaders are demanding.
Analyze the ways in which BWB strives to achieve a triple bottom line. Is this business model sustainable in the long term? Why or why not?
There are ways in which Better World Books are putting forth tostrive to achieve a triple-bottom-line by engaging in socialentrepreneurship as a business model. First, social entrepreneurshipcan be described as a process that people undertake economic risks toengage in innovation by creating new products, new organizations, andnew processes. Entrepreneurs are known to innovate by creating newopportunities and then assembling necessary resources to exploitthem. Better World Books for example represents this kind of socialentrepreneurship that involves creating societal value to the societythus enhances social wealth (Henn, 2009). From BWB’s socialemphasis, it is evident from its mission statement that describes thebookstore as “a global bookstore, which harnesses capitalism powerto bring opportunity and literacy to people all over the world”.
The company thus strives to achieve triple bottom line by using themodel to evaluate its performance. This business model is sustainablesince the company is traditionally created under economic values thatmeasure it by using standard financial and accounting tools. It isalso sustainable since the model is a social commitment to businessactivities, which promotes the firm’s full array of interestedstakeholders. To back it up, the BWB’s case includes thestakeholders who include readers all over the world, employees, andlocal communities. In addition, the model is sustainable because itincorporates another pillar environmental commitment, that aims atsustainable business practices.
Utilize Porter’s five forces framework to analyze the used book industry. Is this an attractive industry? Why or why not? Which force(s) have the strongest influence?
The pure competition model implies that adjusted risk rates of returnhave to be constant across industries and firms. Numerous economicstudies however have continued to affirm that different industriesare able to sustain different amounts of profitability section ofthis difference is given by industry structure. According to Henn(2009), Michael Porter gave a framework that moulds an industry to beinfluenced by five models. The strategic manager of a company thatseeks to create an edge over other rival firms or companies could usethis five force model for better understanding of the industrycontext whereby the firm operates from. These five force modelsbetter known as Porter’s 5 forces are: Supply power, threat of newentrants, threat of substitutes, buyer power, and degree of rivalry.
From Better World Books’ case, Mr. Murphy is faced with thedilemma of coming out at the top from rival companies who offer thesame product as his. From the company’s study, it is evident thatit is an attractive industry. Mr. Murphy in his office plans how hewill scale up BWB to ensure that it competes favorably in the marketand to continue with triple-bottom-line results. He wonders how muchmore the growth is needed and how much the socio-entrepreneur modelcould sustain. From Porter’s first force, rivalry is what makes theindustry attractive in terms of striving to bring out the betterproduct and service from the competition. Henn (2009) believes thatin traditional model, the competition among rival companies helps todrive profits to zero level. However, rivalry is not perfect and atthe same time companies are not sophisticated thus drives passivetakers of prices. Rather, companies for example BWB strive forcompetitive advantage over their competitors. Rivalry intensity amongcompanies runs differently across industries, and thus strategicanalysts become interested in these kinds of differences. BWB facescompetition from companies such as eBay and Amazon but throughPorters model, the company strives to be top of its game.
Secondly, there are instances of threats of substitutes. Fromporter’s model, it refers to products from other industries. Fromthe social emphasis, BWB competes with other companies that havesocial-minded enterprises which in this case follows a strikinglydifferent but similar business model. Mr. Murphy from his positionwonders whether his company will have to expand to other products toensure the company’s survival. From Porter’s five forcesincluding those that are not discussed here, degree of rival has thestrongest influence. This is because from striving to outdo othercompanies, BWB in this case can choose added advantages for examplechanging prices of its products to its advantage, improving productdifferentiation by improving features, and implementing innovations,using creatively the channels of distribution, and exploitingsuppliers’ relationships (Henn, 2009).
Perform a VRIO analysis. What are BWB’s resources and capabilities? What core competencies do they have to help them compete in the used book industry?
In a wide scope, VRIO framework involves a much larger company’sstrategic scheme. The process of a basic strategy that any companyundergoes starts with a vision statement and goes through internal,objectives, and external analysis, strategic choices andimplementation. The company, BWB in this case, could hope that thisprocess could eventually compete in a marketplace they are in. VRIOinternally falls into the analysis of these procedures but a tool toevaluate all the capabilities and resources of the company. The VRIOis abbreviated with the four questions framework used to analyzecapability or resource to determine the company’s competitivepotential (Henn, 2009). There is the Value question, Rarity question,Imitability question, and Organization question.
The Value question raises the question of whether BWB is able totake advantage of an opportunity or is able to counteract a potentialthreat from its competitors with the capability or resources. Thisframework is used by the company to analyze its ability to competethe likes of Amazon and eBay to look into ways of taking intoconsideration the possibility of a potential threat. Rarity questionanalyzes the ability of BWB to control the capability or resource inthe hands of a few companies. Imitability question examines thedifficult of other companies for example eBay and Amazon to imitatewhat BWB is currently involved in and whether there is a significantadvantage of other companies trying to obtain, or duplicate acapability. Finally, the Organization question examines the positionof the company’s structure, whether they are ready or able toexploit its capability to deal with its internal activities.
Perform a SWOT analysis for BWB
SWOT analysis tries to examine the external and internal environmentof a company or firm in order to help with executing its strategies(Henn, 2009). In this case, BWB also has its form of SWOT analysisthat aims at using it for strategically assisting with their onlinebusiness.
An organization features that allows a company to operate moreeffectively when compared to other external competitors. Better WorldBooks has a triple bottom line that is economic value, environmentalaspect, and social perspective goodwill of the company.
By recognizing weaknesses, it helps in improving a company as ittries to highlight improvement points. The weaknesses of BWB are thatit is not well diversified since it only deals with books. They alsolack a long term vision, something that could guide their options andsteps to the future.
This analysis takes into account the advantages of market trends andby this Better World Books is not left behind either. The companyhas a global identity due to its partnerships globally while itbuilds its inventory from donations.
These are threats that are external that affect the businessnegatively. BWB also has its own threats. They include relying ondonations and rapid advancement in technology, increasing number ofcompetitors since they can purchase the books online from othertechnological-savvy companies
Henn, S. K. (2009). Business ethics: A case study approach.Hoboken, N.J: Wiley.