In 2011, the Amazon Kindle sales generated around $2 billion in revenue and a further $1.7 billion with the sales of millions of e-books (CNN, 2011). These figures have pushed traditional book and high street newsagent WH Smith to launch its own e-reader in order to tap into this new market.
WH Smith was traditionally only present on the paper book market which is separated into two businesses: its high street division and its travel division. However, as Kate Swann, chief executive of WH Smith has put it, demand for paper books continues to be “soft” and new alternative markets or solution have to be found in order to continue to make profit. Consumer spending is unlikely to go up in the short term and changes have to be made to the company in order for it to remain profitable.
WH Smith has already started to pull out of low profit businesses like CDs, DVDs and games and has now also started to focus more on the travel division of the company where profits are This new business strategy which aims to abandon low profit activities and reduce costs also means that new self-service checkouts are being introduced in its 1,100 UK shops.
The launch of the new Kobo e-reader, the reduction in checkout staff and the fact that WH Smith is redefining its core activity shows that the company is trying to adapt to the new current economic situation and improve its profits in the short term.higher, growth potentials exist and high barriers exist for potential new entrants.
[...] In this case study, WH Smith is present in two different businesses. Even though its objective is to invest more in the travel division of its company, the high street stores provide a major part of the income and different HRM strategies must be applied to these two different businesses where the customer base is also different. Customers visiting a travel branch of WH Smith are less likely to return to the same store than the ones that shop at the high street outlets; WH Smith customers bought an average of three books a year in these branches according to Swann. [...]
[...] - Mitchell, D. (2011). Explaining Kindle's success: it's very simple(minded). CNN Money. - Purcell, J. (1999). Best practice and best fit: chimera or cul-de- sac?. Human Resource Management Journal, Vol. 9, No.3, pp.26-41 - Truss, C and Gratton, L. (1997). Soft and Hard models of Human Ressource Management: A reappraisal. Journal of Management Studies. Volume 34. Issue 1. pp 53-73. Books - Armstrong, M. (2006) Strategic Human Resource Management: a guide to action, London, Kogan Page. - Beardwell, J and Claydon, T. [...]
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