TEAM MEMBERS:Yurong Liu

Melody HaddockVan Huynh

Vanessa LopezUsoro Itata

Amazon In Japan

Amazon In Japan

How Amazon leveraged its capabilities to succeed in Japan?

Agenda

• Company Background• Critical Issues• Strategic Analysis• Recommendations• Questions & Answers

Company Background

It was named after the great river in Brazil nourishing the most abundant live species, because it supply the most abundant books and other gadgets online.

• Founded by Jeff Bezos

• Time magazine's Person of the Year in 1999.

• U.S. News & World Report as one of America's Best Leaders in 2008

Amazon RiverIn Brazil

Overview of Amazon.com

Old days

• Major business is selling books online • Competing with traditional bookstores, such as Barnes &

Noble, Inc.

Today

• Selling diversified products, including DVDs, CDs, MP3 downloads, computer software, video games, furniture, food, etc.

• Competitors: Barnes & Noble, eBay Inc. and Wal-Mart

Strategic Analysis

Amazon.com has established separate websites in Canada, the United Kingdom, Germany, France, Japan, and China

amazon.co.jp was established in 2007

• Invested $8 billion • Setback due to

Saihan system • Come back with

different strategy

Critical Issues

Japans Internet Usage• Japanese are the pioneers of internet and mobile technology• Ranked 3rd in the world Japan has 93.4 million internet users

Competitors in Japan Market• Softbank - broadband company , sole provider of the iPhone and iPad in

Japan• Rakuten – broadband company, recently bought buy.com

– B2B2C company without a warehousing function

Critical issues of doing business in Japan

• Japan appears as a lucrative market as • Japanese are voracious readers• Less concentrated than American market• Most Japanese bookstores are brick-and-mortar forms

• But Japan poses:• Legal hurdle• Saihanbai Kakaku iji Seido system fixing book prices: outlaw price

competition• Directly attack Amazon’s strategic positioning as low-price online book

store

• Cultural roadblock• Fear of fraud refraining internet credit card purchases in Japan• Hard to facilitate online purchases

Strategic Analysis (continued)

• Physical – Headquarters in Seattle WA

– Extensive distribution channels

– Strategic relationship with major logistic agencies and local shipping agencies

• Organizational– Completely customer centric company – “… to build a place where people can come to find and discover

anything they might want to buy online. “

• Technological• Cutting-edge technologies (IT platforms, CRM softwares, databases)

Strategic Analysis (continued)

• Human:– “Work hard, Have fun, Make history”

• Innovation (Amazon’s key leveraging capabilities in Japan)– Innovate or Evaporate !!!!!

• Overcome competition: – Introduce new products Amazon Kindle DX, Amazon Scan

search, Japan Jewelry Store, etc…

– Offer point reward systems and free shipping

– Maintain “Amazon marketplace”

Strategic Analysis cont

• Overcome legal barriers - Saihan : – Switch strategies from books to consumers products (60%)

• Overcome cultural barriers: – Accept ATM payment (unique in Amazon Japan subsidiary)– Excerpt reading” to suite the taste of Japanese’s

tachiyomi custom.

• Reputational: – No 1 online retailing entity in Japan 2009.

SWOT ANALYSIS

• STRENGTHS– Well-built global brand name– Cutting-edge technologies– Strong financial capabilities– Good corporate culture and customer service– A highly innovative organization with effective research teams– Extensive network of business supporters (distribution channels,

financial entities)

• WEAKNESSES– Very strong competitors (i.e. Rakuten Japan)

– World fuel price escalations

SWOT ANALYSIS

• OPPORTUNITIES• Online retailing is on the growth, not only in Japan but also

worldwide

• Customer’s technology awareness is enhanced.

• Many opportunities for acquisitions of new business or business partnership especially profitable brick-and-mortal firms in Japan.

• THREATS• Brand dilution (inherent risk upon diversifying product lines)

• Merely dependent on technology maintenance and development

Recommendations

To sustain its growth in Japan, Amazon needs to:

• Continuously do market research

• Maintain and improve its distribution channels

• Build up a trustworthy relationship with local authorities

Conclusion

• Amazon.co.jp is on the rise

• Critical Issues

• Financial Capabilities

• Good Corporate Culture

• Has room for expansion

http://www.youtube.com/watch?v=Q-RVjhH1L1s&NR=1

Thank you for your attention!

Any Questions or comments?

Thank you for your attention!

Any Questions or comments?