BOOKOFF AND THE BOOK RETAIL

INDUSTRY IN JAPAN
Liana Novani Putri – 12030117190232
M. Nicko Fabriano - 12030117190230
1. Describe the book industry in Japan using
Porter’s 5 forces ?
• Rivalry amongst competitors exists but is not expressed in terms of price wars because of the price
fixing system. There are, however, a large number of evenly-sized firms offering the same products in a
largely stagnant industry.
• The threat of potential entry is high. There are little scale-based advantages, little non-scale based
advantages such as unique technology, almost no product differentiation and no government policy that
discourages new entrants
• The wholesale suppliers determine price, and the two dominant suppliers have undue influence on the
industry, especially on the smaller operators. There is no indication that they intend vertical integration, but
their influence will remain substantial for as long as the price fixing system is in place.
• In terms of buyers, they can obtain the standard, undifferentiated products from any bookseller, so
they have little influence. But there is a substantial threat from substitutes. Printed material is
under threat from other sources of information and entertainment, and booksales are likely to further
decline.
2. What do you think will happen if this Saihan
system is abolished by the Japanese
Government? Explain.
It can lead to drastic changes in the Japanese Book market.
 Elimination of majority of small bookstores: Absence of Saihan can trigger small bookstores to merge and
can lead to a less fragmented book industry.
 More competition and efficient retailers: With no limit on price levels, retailers will try to be as efficient as
possible and try to achieve higher profits through economies of scale. They will in turn try to price items at
lesser prices and this will make the market more competitive.
 Establishing of brand loyalty and product differentiation: Retailers will be consolidated and customers will
prefer one brand of chain of retail to others. This will transform the currently commoditized book market.
 Increase in profit margins: The dissolution of Saihan will cause the companies to increase their profit
margins, leading to an overall prosperous industry.
3. Develop VRIO diagram for Bookoff
VRIO ANALYSIS
• As with the value of resources, Bookoff is able to sell used books at a lower price than its competitors meaning
that its books have value because it gains profit even after selling cheaply. For that reason, Bookoff receives
several new customers every day because their products and services are valuable. Therefore, Bookoff is better
than their competitors.
• The books are not rare in the Japanese bookselling industry because there are numerous retailers selling books.
However, Bookoff sells used books while other retailers and wholesalers specialize in new books. In this case,
Bookoff is safer in the bookselling industry because it provides rare items.
• Bookoff is far much better than its competitors because the technology it uses to renew used books is not
imitable. As such, any other company that might attempt to imitate Bookoff by selling used books must also
possess the technology used to improve the quality of books.
• Bookoff have experienced employees that bear the potential to utilize the resources properly. For instance, the
organization of Bookoff in all stores is franchised. Secondly, all employees at Bookoff are trained as
entrepreneurs.
4. The success of Bookoff in its home country (Japan)
encouraged its management to offer its franchise in
Indonesia (Jakarta). In your opinion, what international
strategy is suitable for the Bookoff in Jakarta to
implement?
On International Corporate Level Strategy, between Multidomestic Strategy and Global Stragety. The
suitable one to implement Bookoff in Jakarta is: Global Strategy.

• Global Strategy: international strategy, where the corporate headquarters determine the business unit strategy
used in each country.
• This strategy indicates that the company has a high need for global integration and does not really need a
local response from the country.
• Where it is reduced back to Transnational strategy, is an international strategy that combines the benefits
and efficiency of a global scale with a local response. For companies that use this strategy, the main activities
are not centralized in the parent company but each branch carries out its own duties
• Environmental trends also play a vital role on implementing global strategy. Which are: liability foreignness
and regionalization.

• Choice of international entry mode: strategic alliances by having a partner in Indonesia and maximize the
second goods source in Indonesia (thrifting) where thrift currently is still favourable trends in Indonesia for
several years.

• Strategic Competitiveness Outcomes: international diversification and return by extends the sale of goods
or services across global borders and countries into different geographic locations, also enhanced innovation
by 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.
5. In your opinion, will Bookoff in Jakarta be
as successful as Bookoff in Japan?

In our opinion, opening BookOff in Indonesia will be a great success. Only Bookoff will later become a used
goods retailer with technology making it like new at an affordable price. Whether you're in the market for used
books, media, clothes, accessories, or appliances, Book-Off can provide you with the products you are looking
for. It's also great when moving home - you can both unload unnecessary things (at a nominal price), but also
buy for your new place.