Case Study of “Bookoff, Amazon Japan, and the Japanese Retail Bookselling Industry”

2008 Words Jun 25th, 2010 9 Pages
Case Study of “Bookoff, Amazon Japan, and the Japanese Retail Bookselling Industry”
1. The reasons for the profitability of large Japanese retail booksellers relatively poor and their scale relatively small.
One reason for this is that there is no significant industry consolidation has occurred, so there is no dominant bookseller, because there is a unique formal institution which is price-fixing system that makes it illegal for larger and potentially more efficient competitors to use price competition to drive out small competitors. Laws have allowed publishers to fix the price of new books, music, and newspapers in the bookselling industry, this means retailers are unable to compete on price. For a long time, sales has been in
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So the small number of suppliers and they provide the newest and most popular books shape the strong bargaining power
The buyers of this industry now can choose to use internet to entertain, this causes the overall drop in book sales in Japan, and the number of retailers in the industry is very big, so they can choose between different stores without any switching costs, and they are all facing undifferentiated books, so the bargaining powers of buyers in the industry is very enhanced.
The substitutes are posing big threat of this industry, e-book and cell phone novel are convenient and less expensive compared to existing hard copy books and customers virtually incur no costs when switching from hard copy books to e-books, cell phone novels. So the substitutes are a big threat for this industry.
For Bookoff, the strategy Bookoff deployed is low-cost leadership, it uses a loophole in the Saihan system to offer lower prices by opening used-book stores, because used books are an exemption to the Saihan system. Bookoff uses its new technologies to clean book covers and grind down dog-eared pages to make a used book look practically new, and the rehabilitated books are at new book quality, so, it offers the same value of a product at a lower price compared with its rivals, the technology it is using is an entry barrier for other competitors and potential entrants. While the…