Case Study #2
BUE 260 851
1.) Summary of the case (key players; background). 2.) Identify the scope of the problem.
3.) Analyze the issue/outcome.
1.) What are Amazon's firm-specific resources and capabilities in the Unites States and Japan?
2.) What institutional barriers prevent Amazon from flexing its muscle in Japan?
3.) How does Amazon leverage its capabilities to overcome institutional barriers in Japan?
In the year 2000, Amazon had already established itself as one of three main booksellers in the United States, along with it's two competitors; Barnes & Noble and Borders. (Peng 2011, Pg. 155) Amazon wanted to take advantage of the Japanese market because there was a large market with very little competitors. Amazon was very optimistic after opening its doors the first year, but were very disappointed when sales only reached $150 million, which is nothing compared to it's worldwide sales of $4 billion. Amazon was unsure as to why it wasn't as successful in Japan as it had been in the United States. Amazon did some research to find out more about it's Japanese customers and also learn some of the laws, such as figuring out the primary source of their troubles came from the unique institutional landscape of the Japanese book selling industry, known as the Saihan system. The Saihan system allowed publishers to fix the price of new books and newspapers which took away from Amazon's advantage from it's competitors of having the lowest prices. Amazon's firm-specific resources and capabilities in the United States consist of their ability to offer products at a discounted rate of 20% to 30% which entices their customers to order products through them opposed to off of the manufacturer's website. Not only does Amazon sell books, but they also have a wide variety of electronics, appliances, furniture, dvds, clothes, etc… The ease of ordering multiple products at discounted...
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