Balanced Scorecard Program

Lia TorreTerri LeofskyTory KindlickYoftahe ZewduIyolo MabilaRachel Katz

Company History

Current company chairman, Leonard Riggio, started as a clerk at the NYU bookstore.

Started his own competing book store in 1965

In the 1970s acquired the declining flagship Barnes & Noble trade name and flagship bookstore in Manhattan.

Within a few years, Mr. Riggio transformed the Fifth Avenue store into "The World’s Largest Bookstore," with 150,000 textbook and trade titles. 

Company Overview

Nation’s largest bookstore

As of January 31, 2009 operated 778 bookstores and 1 website.

Employs 37,000 full and part time employees

Each store features 60,000-200,000 unique titles

BN.com does 10% of total sales

Annual Sales 5.121 Billion

Company Operations

The company’s operations consist of:

retail bookselling

college bookstore management online retailing book publishing

Company Mission

Our mission is to operate the best specialty retail business in America, regardless of the product we sell.  Because the product we sell is books, our aspirations must be

consistent with the promise and the ideals of the volumes which line our shelves.  To say that our mission exists independent of the product we sell is to demean the importance

and the distinction of being booksellers.

As booksellers we are determined to be the very best in our business, regardless of the size, pedigree or inclinations of our competitors.  We will continue to bring our industry nuances of style and approaches to bookselling which are consistent with our

evolving aspirations.

Above all, we expect to be a credit to the communities we serve, a valuable resource to our customers, and a place where our dedicated booksellers can

grow and prosper. Toward this end we will not only listen to our customers and booksellers but embrace the idea that the Company is at their service.

Competitive Landscape

1) Amazon.com, Inc.2) Books-A-Million, Inc.3) Borders Group, Inc.

Industries Where Barnes & Noble, Inc. Competes

Music, Video, Book & Entertainment Retail Nonresidential construction, nec

Media Clay, Ceramic, And Refractory Minerals

Publishing Retail

The Balanced Scorecard

Financial PerspectiveGoals Measures

Customer PerspectiveGoals Measures

Operations PerspectiveGoals Measures

Innovation PerspectiveGoals Measures

How do we look How do we look to owner’s?to owner’s?

How do customers How do customers see us?see us?

How can we How can we continue to continue to improve?improve?

In which activities In which activities must we excel?must we excel?

Customer Perspective

Mission: “We expect to be a credit to the communities we serve, a valuable resource to our customers, and a place where our dedicated booksellers can grow and prosper. Toward this end we will not only listen to our customers and booksellers but embrace the idea that the Company is at their service.”

Goals: 1) Industry Leader in Book Retailing

2) Maintain “Community Store” concept

Customer Perspective

Objectives: Increase Customer Retention

Measure: Increase in returning customers online and in retail locations

Target: 80% of customers are repeat

Initiatives: Provide excellent customer service and an outstanding customer experience either online or at retail locations.

Customer Perspective

Objective: Increase Customer Loyalty

Measure: More new customers in loyalty program

Target: 20% more

Initiatives: Get customers to sign up for loyalty program by giving them 10% off their order/purchase when they sign up

Customer Perspective

Objective: Maintain strong sense of Customers’ changing needs

Measure: Number of online surveys filled out

Target: 1,000 surveys completed per country

Initiatives: Incentives customers to provide insight as to how B&N can be of better service

Customer Perspective Objective: Increase internet presence to add value and

convenience for customers

Measure: Increase number of visitors to website

Target: Increase number of visitors from 365 Million to 450 million

Initiatives: Drive customers to website using affiliate marketing tactics, giving customers free shipping on their online orders, presenting in-store customers with coupons valid on internet purchases only, offering customers special information only available on the web (info about in store events, coupons,

Financial Perspective

In 2008:

No debt on the balance sheet

$282 million cash on hand

Comparable sales down 5.4%

After tax earnings of $76 million

Financial Perspective

Objective: Continue to exit small stores in the malls and sign shorter leases then competitors

Target: To increase sales per square foot

Measure: Sales per total square feet year over year

Initiative: Continue Real Estate Strategy, Continue to relocate stores at end of terms to higher potential locations

Financial Perspective

Objective:Continue to increase sales by department (return to 2007 levels)

Measure: OBY department sales increase; particularly the children’s department

Target: Increase category by 5% year over year

Initiative: Increase promotional activities within the children’s department; Direct mailing; Online mailings; Create book blogs and online book clubs

Year 2009P 2008 2007 2006 2005 2004Total OBY Store Sales 0.40% -5.4% 1.8% -0.3% 2.9% 3.1%Category:Fiction/LiteratureChildrensHistory

Financial Perspective

Objective:Increase B&N.com Financials

Measure:Increase B&N.com sales

Target:Increase sales by 7% (Half of Growth from 06 to 07)

Initiative:Advertising within the store, Increase online promotions

Year 2009P 2008 2007 2006 2005 2004B&N.com Sales 000's 480,064 466,082 476,870 433,425 439,657 419,821 Calculated % change 3.0% -2.3% 9.1% -1.4% 4.5%

Financial Perspective

Objective: Increase EVA

Internal Operations

Objective: Improve employee productivity

Measure: units sold per hour, revenue per employee

Target: Increase by X %

Initiative: Motivate employees to perform at a higher level of productivity through incentive programs.

Internal Operations

Objective: Improve inventory management

Measure: inventory turnover

Target:

Initiative: Continued improvement of supply chain system to reduce inventories

Internal Operations

Objective: Reduce order-to-delivery cycle time for online orders

Measure: Average order-to-delivery time

Target:

Initiative: Decrease cycle time to get books in customers hands quicker.

Internal Operations

Objective: Increase Barnes & Noble.com sales

Measure: Increase percentage of total sales from Barnes & Noble.com yearly sales

Target: Increase Barnes & Noble.com sales by 3%

Initiative: Create incentives for customers to shop online instead of in-store

The Future of Barnes and Noble

References

http://news.cnet.com/Borders,-Barnes--Noble-take-separate-paths-to-profits/2100-1017_3-245231.html

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Financial Perspective

In March of 2009, B&N acquired Fictionwise, a leader in the e-book marketplace. They paid $15,700 cash.

Financial Perspective

Objective: Increase profitability of Fiction wise

Measure: ROI - Return on Investment

Target: 15%

Initiative: Release of the nook, pricing discounts, advertising on website, in-store advertising

Real Estate Strategy

Exit small mall stores

Sign shorter leases then competitors

Outcome: Sales per square foot lead the industry

Financial Perspective

Objective: Increase Sales by B&N club members

Measure:Year over year sales by card holders

Target: Increase sales by 5%

Initiative: Increase membership focus on website; Increase member-only promotions