While I am reading blogs of my classmates, Song Gao’s post –UBC Bookstore? Discount Bookstore? catch my eyes. I agree with what she said about different position strategies adapted by UBC Bookstore and Discount Textbooks. She mentioned that UBC Bookstore distinguish itself with UBC-logo products, delicate merchandise presentation, comfortable indoor environment; while Discount Bookstore is simply a textbook retailer by comparison. She concludes that both store operates well because they positions themselves differently to create unique value for customers.
In addition to what she said, I’d like to share my view on Company Objectives, Competition and Costs of the two bookstores.
For company objectives, UBC Bookstore seems to has profit orientation while Discount Store is sales-oriented. Stressing savings on textbooks, Discount Bookstore offers lower price by reducing its costs and lowering its profit margin. Since Discount Bookstore locates outside UBC with little store decorations, it naturally obtains the competitive advantage of lower costs. UBC Bookstore, on the other hand, charges a premium on almost, if not all, every merchandise. Utilizeing its monopoly power within UBC, Our “friendly” UBC Bookstore take advantage of the inelastic demand by jacking up prices to maximize its profits. Still, we see lots of students lining up in UBC Bookstore at the beginning of each semester(Perhaps this huge demand justifies all the premium price charged by UBC Bookstore ).