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An Insight Into The Japanese Book Selling Industry-02

Group Project Global Strategy

R. Julio

on 28 January 2011

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Transcript of An Insight Into The Japanese Book Selling Industry-02

An Insight Into The Japanese Book Selling Industry BACKGROUND

*Japan has half the population of the United States.
*Number of Bookstores :
Japan: 17,000
United States: 11,000
*Japan characterized by a large number of small stores. Ex. Maruzen ($850 million)
*Competition = low in Japan
*The Japanese market has shrunk- industry sales have dropped by 20% in the last decade. SAIHAN SYSTEM

*Government mandated Price fixing law
*Saihanbai Kakaku Iji Seido=Retail Price Maintenance System
*Supporters: increases number of publishers and book sellers.
*Lead to:
longer shelf life
larger selection of books authors. Itaku Hanbai Seido

Consignment Sale System
Retailers and Wholesalers return unsold books to the Publisher free of charge
Benefits wholesalers and retailers
Reduces risks and inventory levels
Return Rate= 40%
Publishers benefit from: Larger retailers
Fewer books returned LACK OF ECONOMIES OF SCALES

Saihan System= major deterrent.
Economy of Scale: companies to obtain profitability and competiveness in their respective markets.
Eliminates retailer’s ability to control sales price limits
Potential growth
Brand Differentiation
Strategic alliances with Starbucks or Kindle Ebooks
New used book seller

*No competition= creates problems
*Consumer luxury :
Leads to little brand loyalty
Harder to gain a stronger consumer base.
*Consumer has fewer options SAIHAN SYSTEM BENEFITS

*Fewer small businesses will fail
*Lack of competition results in:
satisfaction with the “now”,
no worries about the “future”
no concern with competition or hostile takeovers. INSTITUTIONAL BASED VIEWS

Bookoff and Amazon Japan found strategic loopholes
-Incorporating new-used system
-Refurbishes old books
-sold at a discounted price : 40%
-Consumer= owner
*Amazon Japan
-Offer secure payment of online books
-Book, music, gaming, video
-sheer quantity of books mailed from distribution centers and warehouses RESOURCE BASED VIEWS

Sells its brand as a New-Used bookstore
global brand name
online expertise
online exclusive company
added discounts on other products INDUSTRY BASED VIEWS

Preventing competition through exclusivity
Prevents competition through unique refurbishing systems,
exclusive online company
sheer volume in sales DISSOLUTION OF SAIHAN SYSTEM

Would lead to:
Elimination of Majority of Small Bookstores
Larger Bookstores obtaining Economies of Scale
More Competition Industry Wide
Increased Profit Margins on Book Sales
Cultural Adaptation to New System
Increases in:
Profit margins for the larger companies,
Brand loyalty
Product Differentiation. JAPANESE MARKET EXPANSION

*Saihan System
large book retailer will benefit either way
Due to Growing Market
*Dissolved Saihan System
full scaled
differentiation is KEY for success in JAPAN TECHNOLOGY'S EFFECT

*e-Readers and e-books have become a profitable area for bookselling.
*Kindle, Apple iPad and Barnes and Nobles Nook
*E-Readers in Japan
Sony fails
*Pirated books Question 1
Will ebooks affect the book industry in Japan? Question 2
What could be done to prevent pirating of ebooks? Question 3
Would the removal of the Saihan System affect the book industry?
be culturally accepted? By
Chris Jones
Rosalyn Julio
Mark Nunes
Ladan Shaygan By
Chris Jones
Rosalyn Julio
Mark Nunes
Ladan Shaygan
Full transcript