Border's Bsankrupcy

In: Business and Management

Submitted By erica90
Words 505
Pages 3
As I read in the “Wallstreet Journal”, Borders’ February 16th, 2011 bankruptcy filing was the result of bad timing and bad decisions. The recession that started in 2008 affected many retailers, as consumers cut out discretionary purchases. Borders was slow to diversify to on-line sales, having turned over its internet operations to Amazon in 2001, and only taking back its Borders.com website in 2008. Its failure has much to do with their poor business decisions. One of Borders poor decisions was their heavy stock repurchase. If all the cash that was used to repurchase shares in the middle of this past decade had instead been used to somehow strengthen or restructure the company on a more proactive basis, Borders’ employees and shareholders all probably would have been better served. They should of either launched a more competitive eBook reader or by closed some of their many unprofitable stores earlier so they wouldn’t have came to this point. While doing some reading I came to the conclusion that while the quality of a company’s customer experience is a critical driver behind long-term business success, it’s not the only driver. There are basic elements of business management that, if not executed effectively, can derail the prospects of even those firms with the most revered customer experiences. In Borders’ case, their failure can be traced back to a variety of management issues. For instance, Borders outlets were just plain losing money, yet it’s taken a bankruptcy filing to get the chain to significantly narrow its footprint and remove this financial oppressive burden. On average, Borders stores had 15-20 year leases, limiting the chain’s flexibility to respond to local real estate. Another mishap was not outsourcing sooner. Until just a few years ago, Borders outsourced its online book sales to Amazon. Talk about letting the fox guard the henhouse.…...

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