These days, doing a business is like engaging in a warfare. The market is similar to a battlefield for competition on know-how, technology, innovation, marketing strategy, finance, human resources, etc. where every player employs whatever techniques to fight for their continued existence.
Competition in the book market or printing media or “Book strore” business is another furious league that is second to none. When we refer to the “superstore” in the book business, we are talking about a few world-class organizations like Barnes & Borders. However, the birth of Amazon.com in recent years has enormously revolutionized the whole industry and set out a new chapter of retailed selling business.
Competition in the U.S. market
The U.S. is an extremely competitive market place, especially for the book business where the world’s oldest book seller like Barnes & Noble and its long time arch rival competitor like Borders are the industry dominant players. Both compete head-on when it comes to the number of branch opening in the U.S. and other parts of the world. All sorts of strategy have been employed but the most effective one seems to be the offering of 10%-30% cash discount.
By the time Amazon.com tapped in the on-line bookshop, it was an instant success and looked as if it would easily outsmart the success of Barnes & Noble. Shortly thereafter, Barnes & Noble opened the on-line bookshop to compete in the on-line market as well. They opened the www.bn.com (www.bboks.com) which uses the technology of Microsoft Reader compared to the Adobe Acrobat Reader used by www.amazon.com. To date, no conclusion has yet to be made that who the read winner is between the real book store with an e-book shop and the pure e-book shop.
While Barnes & Noble was busy competing with Amazon.com, Borders has aggressively expanded its presence to overseas markets. In Europe alone, there are seven Borders shops.
Super branches like the ones on Charing Cross Road and Oxford Street have operated full scale in a 4-story building, selling all sort of books from “Books, Music, VDO, Café” The presence of Borders in Europe caused big industry shake-out. The local book store like Waterstone, WHSMITH BOOKS etc., Foyles and many others that have radically adjusted their strategy that have never been so aggressive like the offering of 10-30% discount from cover price on all new books, the promotion like buy three and pay for only two, or pay only one pound on new novel. In addition, event marketing has been organized more frequently than has previously been the case.
Not limited to its presence in Europe, Borders also expanded to Asia such as in Singapore. And around the world, Borders operates in Australia (Melbourne, Sydney), New Zealand (Auckland), England (Brighton, London, Oxford St., Charing Cross Road, Leeds, Yorks, Cheshire, Bournemounth), Scothland (Glasgrow), to name just a few.
Competition in the Asian market
Singapore – the country smaller than the Phuket province – has about 3.9 million population. The per capita GDP is at $US25,353/year while the economic growth rate is an expected 8.0%. Thailand, in comparison, has 62.6 million population. GDP per person is $US5,757/year and economic growth rate is for forecasted at 6.6% (from Asia week, Oct 20,2000) .
In Singapore, MPH is the oldest and largest book store. There are about five Kinokuniya branches although all are relatively in a small size. It turned out that when Borders came to Singapore, the first round knock-out was on MPH store. Now it attempts to compete by opening an on-line book shop. Simply speaking, MPH avoids an outright competition with Borders and turn to the e-Commerce strategy as a basis for their competition. It runs a number of sales promotion strategy, including the reward card and the niche play. In the long run, the sore ambitiously aims to become a regional book shop.
Kinokuniya, which is the Japanese book store also responded strongly. All branched were refurbished in terms of both area and format. It also dropped out two less promising branches and now running only three larger branches at the size comparable to the Chula Book Center at Siam Square. They started some intensive promotion strategy such as
(1) Offering 20% off on all new books : novel, business, and many others.
(2) Opening more product lines. Originally they focused only on Japanese books. In terms of depth, they included more categories such as Magazine, Text Books, Trade Books.
(3) They do Event Marketing every month. Before the arrival of Borders, their event marketing was soft and far less attractive.
Distribution is a major factor of the book store business as the number of outlets determine the accessibility of the customers. Take the Kinokuniya example, in Asia-Pacific, it operates many branches in many countries i.e. Singapore (Singapore Main Store, Liang Court Store and Bugis Junction Store), Thailand (Bangkok Store at World Trade Center), Sukhumvit Store at (Emporium), Malaysia (KLCC Store, Lot 10 Store, Pusat Bandaraya Store and Penang Store), Indonesia (Plaza Indonesia Store and Plaza Seneyan Store), and Australia (Sydney Store).
To expand the distribution to covers al channels, Kinokuniya sells through multi-channels i.e. through physical outlet, through Library, through adoption (selling books through teacher or instructor), and through the on-line shop (www.kinokuniya.com), etc. Kinokuniya also uses the Global Promotion strategy. Generally, most book stores will run a local promotion. With a number of branches, they might run a corporate promotion. In case of Kinokuniya, when other branches outside Asia-Pacific organize a promotion, such campaign will apply to all Kinokuniya branches including all branches in Asia-Pacific. This reflects its image as being a one united. World-class book store.
In conclusion, Kinokuniya book store is a Japanese business that is able to jump the league and competes head-on with the big player like Borders to jump the US. From the above mentioned approach, we can see that superpower using the same rule, only if they are determined and have the will power to win.
Dr.Danai Thieanphut
Managing Director
DNT Consultants Co.,Ltd.
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