Thursday, March 9, 2023

Decision Rights at Barnes & Noble

After a steady decline in profitability, Barnes & Noble is rebounding. It was purchased by a hedge fund in 2019 in order to implement a new strategy of more local autonomy. It turns out that book demand is quite regional and even local. The new strategy allows individual stores to make decisions on what titles to stock. They even stopped publisher promotions of potentially unpopular books in special displays.

  1. Who was making inventory decisions? HQ
  2. Did they have good incentives to make good choices? Yes
  3. Did they have good information on what choices to make? No

Solution: Allow at least some inventory decisions to be made at the stores who know their clientele's particular tastes. I suspect that this also required greater incentives  at the store level.

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