Quote:
Originally Posted by DMcCunney
Should you get a few moment to go into them, please do. I agree it's possible to create a stronger entity out of the pair, but I'm not laying any bets on the success. I'd be curious to hear your friend's notions on the topic.
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I didn't mean to imply that it was an obvious "win" for them, but at this point both companies are in so much financial trouble, they're definitely going down if they don't do something big. And merging the two is the kind of radical thing that just might work.
My friend's thinking was mostly about economies of scale. The easiest advantage is that a combined entity can scale down. They could function with less overhead, fewer management employees; they can shut down the lowest-producing and most expensive locations. Of course that would only occur if they had been collecting good data over the years, and there's no guarantee that they have good data. I used to work for a large company that went through one big merger per year on average, and I was always shocked at how frakked up the data gathering was.
My thinking is that they will likely blow the merger by focusing on internal politics over what's best for the combined entity. They would most of all need to identify and keep the right people at the highest levels. They need visionaries at this point, people who can see new possibilities and not cling to the way they've always done things in the past. One of the big mistakes would be to fire the B&N execs and keep the Borders execs -- that's typically what happens in these situations,and it's almost always a mistake. They need to take the time to ID the people who can lead them into new realms.
The "psychological merger" of the two brands might be the hardest part. B&N has marketed itself as the "literary chain", a kind of nationwide store that still hand-sells literary fiction (hand-selling being the recommendations of each employee to each reader). Borders has always had a big-box style, and they've focused on genre fiction and other elements that make them more "populist" in feeling than B&N. Heck, most B&N locations don't even *have* a Romance section, whereas Borders promotes "romance readers groups" that meet each month and give out ARCs (donated by the truckload by romance publisehrs) to the members of the group. That's a pretty wide cultural divide to cross.
Not saying it's a slam-dunk, but I think it's their only shot.