Copperfield Books Inc.
Essay by review • March 23, 2011 • Case Study • 1,338 Words (6 Pages) • 1,422 Views
I. INTERNAL ANALYSIS
a. Present Situation:
i. Current Strategies include expand Copperfield's Books Inc. from 8 million to 15million in four years. To grow in size so they can develop a level of efficiency quickly to avoid unwanted administration costs. They plan to become a favorite in the community based around their new slogan "Creating community, connecting with you"
ii. Current Strengths are not what Copperfield Books Inc. would like them to be at but they do possess several that are very promising for their future of the business. The most important ones are as follows:
1. The company has been known for having a great employee turnover ratio. A great example of this is Art Kusnetz, manager of Copperfield's Petaluma Used and Rare Bookstore, who has over 20 years of experience as a book scout working with book dealers. Montan knows the value of managers like Art and has offered equity with managers in two bookstores
2. They have a strong reputation in the Sonoma county area as being the hometown bookseller, who is involved in the community through cultural events. Not being a superstore having this recognition is very important in the future of the company if they so choose to not become a superstore
3. Breaking into the internet provided value and services to its existing customer base were they could order books 24 hours a day. They also allowed for in store returns on books that were purchased online, which was also offered by competitors
4. Copperfield's inventory of used and rare books was considered to be the largest in the county. Copperfield looked at this as a strength because they can bring in a different breed of book people, ones who know what they want and don't care about the best sellers
5. Copperfield's board of directors granted a Montan broad discretionary power which was a great move to start the transition of Copperfield into the future of growth
iii. Current Weaknesses are more apparent to Copperfield Books Inc. than the strengths seem to be. The weakness that are holding the company back are as follows:
1. The store layout and construction of the Copperfield stores were poorly kept and all ran differently. Store layouts and product offerings varied significantly from store to store. The store advertisements such as signs were done on cut out poster boards that were hand drawn. There was no extra lighting in the stores they were light only by the basic ceiling lights, and they played jazz music
2. Copperfield still used a MS-DOS software program, while other chains had developed software that permitted them to be more connected with the wholesalers. Different levels in the supply chain were able to communicate which cut back on cost so Copperfield was at a huge disadvantage
3. Copperfield's marketing and advertising was very weak. They were unable to get there name out beyond the counties were they had stores located at. They did small advertising in the local press (Press Democrat) and free published magazine (Bohemian) but that was about the extent of it
4. They only targeted one group of book readers the upscale liberal minded customers, which was only a small portion of the book reading community
iv. Current market conditions, consumer expenditures on books exceeded 37.9 billion in 2003. Analysts expected expenditures to increase by 2.9 percent by the end of 2004 at 39 billion and reach 44 billion by the year 2008
v. Current Products Include:
1. Used Books
2. Rare Books Costing of 20$
3. Antiquarian Books
4. First Editions
vi. Environment: to carry a selection of books and gifts that nurtures the spirit and feeds the mind. And to be a fun place to come in to work
vii. Current Activities Include:
1. Decentralizing many of the buying functions
2. downsize the firms warehouse operations
3. cutting down the staff
4. increase in corporate communication
5. accelerating its investment into the internet to increase online sales
b. Financial Resources:
i. Financial Conditions show that in for the year of 2003, net income was $950,000 up from $21,499 in 2002. This is attributed to a one time $826,000 gain in net income taxes on disposable of the downtown Santa Rosa store, which was closed in June of 2004. The proceeds of that store were evenly distributed to the shareholders. The closing also decreased long term debt $826,414. $2.2 billion in used book sales took place in 2004 which is a %11.1 growth from 2003, a good sign for Copperfield
II. EXTERNAL ANALYSIS
a. General Environment:
i. Current Threats include the following:
1. The emergence of digital book downloading, consumers download books directly to their computers for free
2. The occurrence of blockbuster titles, because revenue would fluctuate dramatically depending on how many were available for sale during a given time
3. Emerging retail channels, they increased depth and selection. (Barnes & Noble carried 200,000 titles while Copperfield carried only 72,000 titles)
4. Retail space
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