IndexCompetition and market entryExternal analysis: PESTL analysisRecommendationsCompetition and market entryThe launch of Amazon. com immediately began to impact the way consumers purchased books. As Waterstones was a Highstreet bookshop they had to incur overheads such as 'rents and labor cost tariffs', this made it difficult to compete with Amazon and other e-retailers as they were able to deduct the price of the overheads from the total cost of the books which in turn allowed them to sell books cheaper than Waterstones. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an original essay “Online-only retailers were able to keep costs lower because they had no overhead associated with retail locations.” Although Waterstones prided themselves on selling a wide range of books to their consumers, another problem they have encountered since the launch of Amazon. com had to compete with Amazon's unlimited "virtual personal space." com had for books. “Online retailers were also able to stock many more books than the average bookstore thanks to their unlimited virtual shelf space.” With the withdrawal of the Net Book Agreement (NBA) in 1997 Waterstones found itself with another competitor. Supermarkets such as Tesco and Sainsburys have found an opportunity to retail books to consumers. From the case study we are told that they were focused on selling a "small range of books that were likely to sell in high volumes". This allowed them to negotiate lower trade discounts which allowed them to sell books at a discounted price. This undermined Waterstones as it had previously been one of the major book retailers to discount book prices. Retailers also caused a problem for Waterstone's discount book marketing strategy as they too were able to negotiate better trade discounts as they were able to stock an unlimited number of books sold in large volumes. From Table 3 of the case study we can see that supermarkets tended to get a 50% discount on books while retailers got 55%. This was a 5-10% lower discount rate than independent stores and large chains. In addition to these problems, an economic recession occurred. Revenue available to governments has decreased, resulting in higher tuition fees. Waterstones would previously have stocked books for educational purposes, but as tuition fees had risen, sales of printed textbooks would have declined as students "probably had less disposable income". It wasn't just students who had fewer cuts to disposable income in the public and private sectors would have resulted in "less consumer spending" and printed books at the time may have been a luxury to buy and would have affected Waterstones book sales. who in the past may have been reliable consumers of printed books were the older generations. However, "in 2011, around 27% of over-65s in the UK" used the internet to purchase goods. Waterstones would have found this to be another problem as a previously reliable target market for purchasing paperback books was adapting to new forms of shopping. Daunt's strategy has been mostly positive, from the refurbishment of the Waterstones store to the reintroduction of the old logo. However, Daunt's strategy also included the dismissal of a large number of regional managers who had been part of the company sinceseveral years. Although these changes "would have saved money", Waterstones staff were less enthusiastic about this strategy. Instead of applying for new roles, several managers decided to resign. Due to these staff changes and resignations, staff morale among Waterstones employees was at an all-time low. This would have been another problem for Waterstones as staff are an integral part of their business and the company needs everyone to work together to achieve the overall objectives of the company. However, the situation continues to worsen and 4 of their key buyers and marketing director have decided to leave the company. From our analysis of the problems facing Waterstones in the case study it is evident that at the time this article was written Waterstones was facing several problems, such as e-retailers and the launch of e-books, the entry of supermarkets into the books, an economic downturn and reliable markets moving away from the traditional purchasing method and, finally, staff morale at an all-time low due to the new business strategy. What makes SWOT very beneficial is that, with a lot of attention, it can help a company discover the opportunities you are looking for well positioned to exploit. And by understanding your company's weaknesses, you can manage and eliminate any threats that could catch you by surprise in a company. By looking at your competitors using the SWOT framework, you can devise a strategy that helps you stand out from your competitors, so you can succeed in your business. External Analysis: PESTLE Analysis Political Factors The UK is a good political environment for the bookselling industry. There are no political restrictions within the country that could affect Waterstones' growth. The bookselling market is growing with a record year in 2017. Total income from book sales (physical and digital books) increased by 4% to £3. 7 billion. Economic Factors The economic factors that concern Waterstones are high levels of unemployment, which in return decreases the demand for books which also affects the demand to produce such books. These factors are out of Waterstones' control but because they depend on people buying books this has a big impact on them. Social factors There is no single reference market, as almost all age groups read. There is a difference between children's books, education and just for pleasure. Different consumers have different needs and their attitudes and purchasing behaviors are varied. Additionally, the growth of e-books on the market has generated greater popularity than physical copies. Technological Factors Technology is vital to competitive advantage. The development of e-books and the opportunity to develop further in a market that Waterstones appears to be an important factor in means that they will be able to increase future sales in the future. Additionally, Waterstones uses its social media platforms to its technological advantage by promoting its product on networking services such as Twitter and Facebook. Legal FactorsThe retail sale of e-books and traditional books is to some extent determined by copyright laws which differ from country to country. There is no law stating that there is a fixed price for e-books in the UK. Other laws are the consumer laws which exist to protect the consumer from purchasing deceptive products and the competition law which prevents larger companies from bullying smaller ones. Environmental Factors Everyone's desire to try to protect the earth and be more respectful.