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Why Barnes & Noble has survived

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Once upon a time, a company imagined a future where music, video and books were all digital, instantly available through a hand-held gadget. It saw itself as a big seller of that digital content.

No, we’re not talking about Apple, but about Barnes & Noble.

In a strategic move, the established bookseller launched the Nook tablet, demonstrating that its leaders understand how not to ignore digital—and how to survive.

Compare what B&N has done with the way former competitor Borders sat idly by as the digital revolution up­­ended the publishing industry. In contrast, Barnes & Noble expects to generate $1.8 billion from the Nook line in 2011.

Here’s what Barnes & Noble did to transform itself:

1. Brought in the right management. To turn itself into a technology company, it needed tech cred. Current CEO William Lynch had no prior experience in the book or physical retail business. He’s an Internet executive.

2. Pinned its future on the right strategy. The paper-book company’s strategy put it in head-to-head competition with the Amazon Fire and the iPad, made by two of the best tech companies in the world. Not even HP, Samsung or Sony have been able to do that.  

To do it, company leaders had to be willing to cannibalize the core business.

3. Used the right leverage. Barnes & Noble used its brick-and-mortar stores as a showcase for the Nook. They are like mini-versions of the Apple stores, with full sales and customer service forces. Tech-only companies can’t offer that.

— Adapted from “What Every Company Should Take From Barnes & Noble: A Page From Their Corporate Playbook,” Aaron Shapiro, Fast Company.

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