Borders Group Inc Situated in Ann Arbor - Essay Example

Under cost leadership strategy, a firm mainly focuses on cost advantage by making the prices lower than the average industry prices. ‘Borders’ seems not to have employed this strategy so far. To illustrate, its online prices are always different from that of in-store prices and they are subject to changes without giving any prior notice (Borders).
Similarly, some of the pricing terms of the company seem unsatisfactory to customers. The differentiation strategy tries to attain higher prices by launching differentiated products and services (Generic strategies-Michael Porter (1980). ‘Borders’ has partially adopted this strategy to promote its sales.

The firm produces “Gift Cards” as its differentiated products, and also designed “Gift Options” at $3.00, with the intent to distinguish Borders’ products from that of its rivals. The company tends to charge an additional premium for this facility. Focus strategy involves concentrating on narrow market segments to focus on the interests of that segment (Marketing Plan). As Borders’ is a multinational company having several subsidiaries, normally it does not want to focus on segment marketing. However, it is identified that since the recent business downturn in the global market, the company has begun focusing on certain market segments.

1. Grand Strategy
The grand strategy involves framing comprehensive plans to meet the major objectives of a firm by employing all available weapons such as ‘market, product, organizational development through acquisition, divestiture, diversification, joint ventures, and strategic alliances” (Grand strategy). The Borders Company facilitates online shopping through its website, Borders.com. This facility assists customers to get easy access to the company’s products and services from any part of the globe at any time. It mainly offers e-books through online shopping and it additionally offers a desktop e-Reader for computers, which would also suit many other applications.

Similarly, Borders’ promotional tactics involve offers sent to customers as e-mails and text messages. The company gives great emphasis on collaborative operations because the firm believes that this practice would ensure organizational sustainability and further business expansion. For instance, ‘Borders’ formed an agreement with Starbucks subsidiary Seattle’s Best Coffee to enhance its expansion activities. Another notable feature of the company is that Borders’ international expansion is based on a franchising strategy. Likewise, diversification is also one of the main grand strategies of ‘Borders’. Recently, in 2008, the company opened 14 stores nationwide that offer a variety of electronic devices such as MP3 players and Sony Reader.

2. Long-term objectives

International expansion is set as Borders’long-termm objective. The company has opened a large number of stores in different parts of the world namely in the UK, Singapore, Malaysia, Oman, and Sharjah. The words of Borders group chief executive officer George Jones (cited in The Free Library) indicate that the company emphasizes the superstore business because the management believes that the superstore is the foundation of its strong brand. After a failure in the global market, the firm restructured its objectives and strategies to revitalize the company’s operations. The firm realized that product diversification was the only effective strategy for improving profitability.

The management also focuses on the merchandise presentation that would increase the firm’s reputation in the global market. Brand loyalty is another long-term objective of the organization and therefore it gives importance to destination business programs. In addition, the firm frames a wide range of marketing and promotional tactics to maintain brand loyalty. Jones tells that the company’s “ultimate goal is to make Borders a vital community gathering place where people come together to see, touch, interact, and learn online and in-store” (The Free Library). To meet the objective the company management heeds its genuine concern for consumers’ changing preferences. Read More