Amazon Goes Global
Individual Case Write Up 1: Amazon Goes Global
1. Why did Amazon choose the United Kingdom as its first entry location? Why not other countries such as Canada and Austrlia?
With the emergence of a global marketplace, Amazon has since ridden on the waves of the opportunities that comes with globalisation. After more than a decade of expansion, Amazon’s international operations accounted for about 43 per cent of its revenue, bringing in $26.28 billion in 2012. This shows the significance of targeting the international markets. However, entry into foreign market does not come without risks and costs that resulted from barriers created by distance. The CAGE Framework of distance by Ghemawat …show more content…
With strong competition and legal restrictions in Japan, Amazon had to adopt strategies that did not revolve around pricing or product offerings in Japan. Legal restrictions prohibited deep discounts and bypassing of sales tax, and Japanese books were already sold at low prices. Amazon was also unable to rely on the sale of English-language books in Japan as English-language book sales only represented a small fraction of the $9.3 billion book industry in Japan. Amazon hence decided to focus on the customer service and differentiation to grow its customer base in Japan. The collaboration with Basis Technology to develop a Unicode-enabled platform for its Japanese language site worked to increase amazon’s customer base in japan since it was able to eliminate a major language barrier. This strategy allows Amazon to tap on its competitive advantages. They also formed alliances and create acquisition with local Japanese companies.
Additionally, Amazon engaged in charity works such as when they teamed up with red cross in the relief efforts after tsunami hit japan in 2011. This helped to instil a positive image of Amazon among Japanese customers and gaining their trust.
Since Japanese consumers enjoyed Western products but were still strongly attached to their own culture, Amazon’s strategies were largely effective in