1. A World Without Borders?Reinventing Borders Group, Inc. (BGP) Brittany Anthony Anthony Harding Stephen McKinley Gabrielle Snyder Marlow Relax, kick off your shoes, & READ

2. Outline Mission Statement/Vision Out with the old, in with the new. Brief History Missed opportunities – Too Little, Too Late. How is Borders currently structured? Organization Management Restructuring Plan The possibilities of a new structure: Intimate Atmosphere – more virtual space, less square footage Kobo- create your own electronic reader/notebook Borders on Campus – back to our roots

3. BGP Mission: Old & New Mission - To be the best-loved provider of books, music, movies, other entertainment, informational products, services. World leader in selection, service, innovation, ambiance, community involvement, and shareholder value. Mission - To be the most sought after provider of in-demand books, music, movies, and other entertainment and informational products and services in the most innovative formats. has something for everyone!

4. History 1971: Tom and Louis Borders open Borders Book Shop, a used bookstore in the academic community of Ann Arbor, MI. Developed state-of-the-art inventory tracking software. 1995: Borders’ 21 stores merged with Waldenbooks; renamed Borders Group, Inc. Went public through IPO. 1997: Announces plans to expand from 203 to 1000 stores. 2008: Barnes & Noble rules out bid to acquire Borders.

5. A Step Behind Too Little… 1998: Borders Online 2001: Deal with Amazon.com 2003: With Wi-Fi HotSpot available. 2008: Borders.com 2008: Concept stores - MP3 players, digital photo frames, and the Sony Reader 2009: Launches free Wi-Fi 2010: Partners with Kobo to deliver eBooks. 2010: e-Bookstore Too Late… 1995: Amazon.com 1997: B&N.com 2001: B&N sparknotes.com 2005: Amazon starts self-publishing 2007: Amazon e-reader Kindle 2008: Amazon online textbooks 2009: B&N e-Bookstore 2009: B&N online textbooks 2009: B&N e-reader Nook 2010: B&N starts self-publishing

6. A History of Missed Opportunities… Disregard for innovative technology. In 2011 Amazon.com announced that its e-book sales now exceed all of its printed book sales. Virtual world is the new reality.

7. …and Overconfidence Excessively rapid expansion: Too fast in too many countries. There was no real basis for continued growth, and yet Borders continued opening stores. Last profit was 2006. 2008, Borders opened 14 concept stores nationwide.

8. What can we do? Maintain our non-corporate feel and stay in touch with the communities we serve. Find a smarter more efficient way of doing things. Tune in to the growth of the virtual environment.

9. Gap Analysis As Is Failure to adequately address the internet sales channel and the subsequent e-book market Over-investment in music Over-reliance on assortment size to compete as opposed to efficient operations Failure to build efficient systems and processes Branding failure Lack of innovation To Be Increasing internet sales by transforming to the internet market Be innovative, and create new products while building a better Brand Cut back on product assortments and store size. Create a better business model by implementing a new design structure that works Implement new electronic products and a new information integrated web system that produces significant immediate results

10. What type of organization structure is Borders? Psychic Prison approach needs to be abandoned – system needs updating to compete in competitive market Gap in market potential because of old structure Amazon boasts of catalog of 900,000 books in its Kindle store, and the company posted $9.86 billion in sales in the first quarter of 2011—up 38 percent from last year

11. Management: Current Structure Currently structured as: Stuck in its own Routine Culture Trapped in a Psychic Prison Mechanistically stagnant in its own failed processes

12. Trapped by Favored Ways of Thinking…

13. What type of organization structure is Borders?

14. The Internet and the Transformation of Commerce Needs to be restructured as an information processing brain Transform retailing and electronic commerce Collaborate with manufacturers Establish a direct interaction between customers, and manufacturers Develop new polices, products, create jobs and plans that then provide a point of reference for the information processing and decision making of others Eliminate intermediary firms, such as retailers Powering Borders through the Internet . . .

16. Quaint, Traditional Styling

17. Statistics from Verso: 2010

18. Statistics from Verso: 2010

19. FORWARD THINKING & WHERE WE ARE HEADING… Kobo– Border’s own e-reader / compete with Nook, Kindle, iPad Tweets–Border’s own online downloadable music site Chirps–Border’s own online downloadable audio books Internet – Online book and music discussions, book clubs, chat with the author or artist, etc.

20. The original kobo lacks innovation and replicates the Nook and Kindle The new kobo powered by Google will have dual screens - download books, music, & your favorite apps

21. Remove music from stores Online music downloads as player for Chirps and Tweets Music artist fan clubs Meet and talk with artists online Half price download for Top 20 Tweets Downloadable songs and music videos

22. Chirp … Border’s downloadable audio books Download magazines and books to the Online book clubs & discussions Meet and talk with authors online e-reader for Chirps and Tweets Downloadable Audio Books

24. Download your college textbook(s) to your e-reader, Apple iPad, or Blackberry Tablet

25. Management is doing things right; leadership is doing the right things. Peter F. Drucker (Father of Modern Business) CEO George L. Jones July 2006 to January 2009 CEO Michael J. Edwards January 2009 to January 2010 CEO Ron Marshall January 2010 to Present

27. Multiple, convenient store fronts throughout the United States

28. Strong customer loyalty program

29. Comfortable ambiance encourages people to read and relax - encouraged by the in-store café (use of cafe Seattle’s Best)Weaknesses

30. Outsourced online sales operation to Amazon – failed to develop solid internal web-based sales channel

31. Long-term leases, negotiated in a growing economy are now overpriced per square foot

32. High operating cost maintaining 500+ U.S. stores countrywide (energy and electricity)

34. Move to a smaller bookstore/café format outside major cities (middle and upper income suburbs)

35. Reduce in-store movies and music and place online

37. Competitive marketplace in book sales especially from Amazon and Barnes and Noble

38. Kindle and Nook are successful and becoming increasingly popular

43. Lack of timely innovation

44. Not aware/adapting to environment

46. Encourage Innovation

47. Know our environment and adapt

49. Organizing as Brain/Organism Structure Organism Seeking to adapt and survive in a changing environment Discover organizations needs Brain Be flexible, resilient, and inventive Distribution of intelligence Evolve along with the emerging challenges.

51. Keep stores who generate most profit.

52. Decrease debt to profit ratio Keep most cost effective per area store per district and use as online warehouse/shipping centers.

53. Concept Stores Open 1 concept store per district Experiment to see how successful the concept of small, cozy bookstores will be Evaluate performance on quarterly basis Performance based Borders locations by district. Mega-store vs. Small Bookstore

54. Taking Back Borders.com No longer outsourcing operation of Borders.com to Amazon. Hire Borders employees from closed stores to operate the new online warehouses. Retain employees who would otherwise no longer have jobs. All operations become in house.

55. Leadership Into the Future The 5 K’s – Management objectives to remain ever changing with times and environment. Keep in contact Keep Innovating Keep Improving Know your environment Know your employees

59. Exchange of ideas

60. Weekly happenings

61. What is going on with ourcompetitors

62. Suggestions/

64. Topics Covered: Sales, new products, customer loyalty programs, local competition, website.

65. What is working?

67. Feedback on sales

68. Products

69. Customer feedback

71. Continuing leadership development meetings on a bi-weekly basis.

72. Quarterly Management Conference Meetings

73. Involving all levels of management