Business Comparison

Business Comparison: Borders vs. Amazon

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Abstract

This paper is aimed to carry out a comparison of Borders and Amazon. Both businesses are very similar, but one has been able to succeed and the other had to declare bankruptcy. The paper highlights the reasons for success of Amazon, and the reasons for Borders' failure. The management of the two companies is much too different, and it is this that led to the bankruptcy of Borders.

Table of Contents

Abstractii

Introduction1

Discussion1

Company Backgrounds1

Borders1

Amazon2

Management Approach and Internet Marketing and Sales2

Reasons for Amazon's Success3

Reasons Borders Failed4

Management's Adaptation to Changing Market Conditions5

Recommendations5

Conclusion6

References7

Business Comparison: Borders vs. Amazon

Introduction

Borders was founded in 1971, based in Ann Arbor, Michigan (Tyndall, 2011). The business was founded by two brothers named Tom and Louis Borders. The business was successful in its initial years, but could not sustain itself and had to be liquidated in 2011. Amazon began its successful journey in 1995, but was not a successful venture in its initial stages. The name of Amazon was a reflection of the vision owned by Jeff Bezos, who wished to establish a business as large scale and phenomenal like the Amazon River.

Discussion

Company Backgrounds

Borders

The Borders Group is known as an international book and music retail company. There were around 19,500 employees in Borders and Waldenbooks stores until 2010. Waldenbooks was a part of the Borders Group Inc. From the statistics of early 2010, there were 511 Borders stores all over the world. The majority of the stores were in the United States (508), and the remaining three in Puerto Rico. Borders even had stores at airports, along with other specialty retail outlets like Borders Express. There were Borders stores in New Zealand, Australia and Singapore, but the company had to sell them off to Pacific Equity Partners in 2008.

In early January 2002, Borders stock was selling at $21.48 per share, more than twice the price of Amazon shares at $10.16 (see chart above). Now Amazon is selling for $216.52 and Borders is selling for $0.02. In mid February this year, Borders had to apply for Chapter 11 bankruptcy protection. They began to liquidate 226 of their stores in the United States. Due to the lack of buyers for the remaining stores, Borders had to liquidate them, as well. The last of the Borders stores were closed off in mid September of this year. The application for Chapter 11 protection was later converted to a Chapter 7 case. By mid October, the Borders.com website was automatically redirected to the website of Barnes & Noble.

Amazon

Bezos vision became reality just eight years after the introduction of Amazon. In 2003, Amazon crossed the whopping sales mark of $5 billion. This achievement took Wal- Mart approximately 20 years, but Amazon achieved it in just 8 years. Another five years later, Amazon became a brand known globally and managed active customer accounts and order fulfillments in more than two hundred countries. Amazon employed around seventeen hundred full- time and part- time employees by this time (Sorensen, ...