Discuss the reasons why founder and CEO Mikitani feels it is imperative for Rakuten to expand beyond the boundaries of Japan. Provide examples to support your answer.How should Amazon and Alibaba combat the global expansion of Rakuten? Provide examples to support your answer.Describe any competitive advantages that Rakuten has in its competition with Amazon and Alibaba. Japan's Largest E-Commerce Company, Rakuten,Competes GloballyThe Rakuten smartphone app BeautyC Navigator, which helpscouples predict the best time to try to conceive a child.Rakuten (www.rakuten.com) is a Japanese electronic commercecompany. (The Japanese word rakuten means optimism.) Since itbegan in 1997, the company has moved into sports, banking, in-surance, and even wedding planning. Rakuten is so pervasive inJapan that one in four online purchases in the country occurs onthe company's B2C and B2B e-commerce platform, Ichiba. Further,the company's loyalty program has 90 million members. (Japan'spopulation in mid-2016 was approximately 127 million.) The diver-sified company owns:Despite its national prominence, Rakuten is not as successful out-side Japan. The company is not well known in the United Statesand Europe, and Alibaba controls the majority of e-commerce inChina. Rakuten's limited global presence is a barrier to growthgiven Japan's decreasing population and its poorly performingeconomy. As a result, the e-commerce giant is expanding overseas,purchasing several foreign companies and investing in others.In just a little over a year, Rakuten spent $2.6 billion on inter-national deals. Company CEO Hiroshi Mikitani has stated that hisfirm cannot operate exclusively in Japan. Rather, it simply needsto defend its market position there. Among the firm's major foreignactivities are the following:• A professional baseball team and a professional soccer team;• The Rakuten Bank;Rakuten Broadband Service;• In early 2014, Rakuten purchased the Cyprus-based messagingapp Viber (www.viber.com) for $905 million.Rakuten Beauty, a chain of beauty salons;• In September 2014, Rakuten bought Ebates (www.ebates.com),an online coupon service based in San Francisco, for $3 billion.Rakuten customers who sign up for Ebates can use Rakuten'sWeb portal to browse the selections of other e-commerce sites,A vehicle inspection service;Rakuten Insurance;Rakuten Wedding, where couples plan their weddings; and (TOEIC) in 2015. According to TOEIC, a score above 800 indicatesadvanced proficiency.Rakuten now has an English-only policy, which it calls"Englishnization." CEO Mikitani made Englishnization a key platformin Rakuten's global expansion. Virtually all company communicationand interaction-from meetings to internal e-mails-is conductedin English.As of mid-2016, Rakuten's attempts to expand its businessincluding Amazon, and earn cash back on their purchases. In2014, this discount service had $5 billion in transactions andgenerated about $20 million in operating profit.• In March 2015, Rakuten purchased OverDrive (www.overdrive.com), a major e-book distributor based in Cleveland, Ohio.• In March 2015, Rakuten led a $530 million round of fundingfor Lyft (www.lyft.com/drive), spending $300 million of its ownmoney for 12 percent of the car-service app.• Rakuten acquired Fits.Me (https://fits.me), a London-basedstartup that creates virtual fitting rooms. The firm's technologyenables online buyers to virtually view how clothing looks onthem without visiting a physical store.globally were still in their early stages, and there are risks to thatstrategy. Specifically, Rakuten may not have the financial resourcesto compete with Amazon and Alibaba. For example, Rakutenreported $5.66 billion in revenue for 2015. By contrast, Alibabareported $12.3 billion, and Amazon reported $107 billion.• Rakuten has purchased a stake in Pinterest (www.pinterest.com).Sources: Compiled from J. Russell, "Rakuten Launches Its OwnSecurity-Enhanced Android App Store in Japan," TechCrunch, August19, 2015; "Rakuten's Research Centers Focused on Mobile," PYMNTS.com, July 30, 2015; C. Shu, "Rakuten Opens New Research Centersin Boston and Singapore," TechCrunch, July 29, 2015; E. Brooke,"Amazon Competitor Rakuten Acquires Virtual Try-On Service Fits.Me," Fashionista, July 13, 2015; I. Lunden and N. Lomas, "RakutenBuys Virtual Fitting Room Startup Fits.Me in a Fashion CommercePlay," TechCrunch, July 12, 2015; D. Loo, "Rakuten to Raise $1.5 Billionin Japan, Overseas Share Sale," BloombergBusiness, June 3, 2015;"Rakuten Forges Ahead in English," The Japan Times, May 23, 2015;S. Buhr, "Rakuten Is Looking to Acquire PopSugar for $580 Million,"TechCrunch, April 13, 2015; B. Einhorn, "Japan's Amazon Has BiggerDreams," BloombergBusiness, April 9, 2015; www.rakuten.com, ac-cessed August 21, 2015.• Rakuten acquired French e-commerce portal PriceMinister(www.priceminister.com).• The Rakuten Institute of Technology opened locations in NewYork, Tokyo, Paris, Boston, and Singapore. The institute's mis-sion is to support both the company's research and develop-ment and its global expansion.Rakuten expanded its financial services into the United States,offering a credit card through a subsidiary of First National Bankof Omaha.Not all of Rakuten's acquisitions have been successful. As one ex-ample, the electronic bookstore Kobo (www.kobo.com), whichRakuten purchased in 2011 for $315 million, had not generated aprofit as of August 2015. Nevertheless, by the end of 2014, the book-store boosted its users by 25 percent, with 23 million customers.Further, Kobo helped stem the tide of red ink by concentrating onits mobile app to sell e-books.One key element of Rakuten's strategy of global diversificationhas been to encourage its employees to become fluent in English.And they succeeded. The average employee scored 802.6 pointsout of 990 on the Test of English for International CommunicationQuestions1. Discuss the reasons why founder and CEO Mikitani feels it isimperative for Rakuten to expand beyond the boundaries ofJapan. Provide examples to support your answer.2. How should Amazon and Alibaba combat the global expan-sion of Rakuten? Provide examples to support your answer.3. Describe any competitive advantages that Rakuten has in itscompetition with Amazon and Alibaba.

Question

Discuss the reasons why founder and CEO Mikitani feels it is imperative for Rakuten to expand beyond the boundaries of Japan. Provide examples to support your answer.How should Amazon and Alibaba combat the global expansion of Rakuten? Provide examples to support your answer.Describe any competitive advantages that Rakuten has in its competition with Amazon and Alibaba. Japan's Largest E-Commerce Company, Rakuten,Competes GloballyThe Rakuten smartphone app BeautyC Navigator, which helpscouples predict the best time to try to conceive a child.Rakuten (www.rakuten.com) is a Japanese electronic commercecompany. (The Japanese word rakuten means optimism.) Since itbegan in 1997, the company has moved into sports, banking, in-surance, and even wedding planning. Rakuten is so pervasive inJapan that one in four online purchases in the country occurs onthe company's B2C and B2B e-commerce platform, Ichiba. Further,the company's loyalty program has 90 million members. (Japan'spopulation in mid-2016 was approximately 127 million.) The diver-sified company owns:Despite its national prominence, Rakuten is not as successful out-side Japan. The company is not well known in the United Statesand Europe, and Alibaba controls the majority of e-commerce inChina. Rakuten's limited global presence is a barrier to growthgiven Japan's decreasing population and its poorly performingeconomy. As a result, the e-commerce giant is expanding overseas,purchasing several foreign companies and investing in others.In just a little over a year, Rakuten spent $2.6 billion on inter-national deals. Company CEO Hiroshi Mikitani has stated that hisfirm cannot operate exclusively in Japan. Rather, it simply needsto defend its market position there. Among the firm's major foreignactivities are the following:• A professional baseball team and a professional soccer team;• The Rakuten Bank;Rakuten Broadband Service;• In early 2014, Rakuten purchased the Cyprus-based messagingapp Viber (www.viber.com) for $905 million.Rakuten Beauty, a chain of beauty salons;• In September 2014, Rakuten bought Ebates (www.ebates.com),an online coupon service based in San Francisco, for $3 billion.Rakuten customers who sign up for Ebates can use Rakuten'sWeb portal to browse the selections of other e-commerce sites,A vehicle inspection service;Rakuten Insurance;Rakuten Wedding, where couples plan their weddings; and (TOEIC) in 2015. According to TOEIC, a score above 800 indicatesadvanced proficiency.Rakuten now has an English-only policy, which it calls&#34;Englishnization.&#34; CEO Mikitani made Englishnization a key platformin Rakuten's global expansion. Virtually all company communicationand interaction-from meetings to internal e-mails-is conductedin English.As of mid-2016, Rakuten's attempts to expand its businessincluding Amazon, and earn cash back on their purchases. In2014, this discount service had $5 billion in transactions andgenerated about $20 million in operating profit.• In March 2015, Rakuten purchased OverDrive (www.overdrive.com), a major e-book distributor based in Cleveland, Ohio.• In March 2015, Rakuten led a $530 million round of fundingfor Lyft (www.lyft.com/drive), spending $300 million of its ownmoney for 12 percent of the car-service app.• Rakuten acquired Fits.Me (https://fits.me), a London-basedstartup that creates virtual fitting rooms. The firm's technologyenables online buyers to virtually view how clothing looks onthem without visiting a physical store.globally were still in their early stages, and there are risks to thatstrategy. Specifically, Rakuten may not have the financial resourcesto compete with Amazon and Alibaba. For example, Rakutenreported $5.66 billion in revenue for 2015. By contrast, Alibabareported $12.3 billion, and Amazon reported $107 billion.• Rakuten has purchased a stake in Pinterest (www.pinterest.com).Sources: Compiled from J. Russell, &#34;Rakuten Launches Its OwnSecurity-Enhanced Android App Store in Japan,&#34; TechCrunch, August19, 2015; &#34;Rakuten's Research Centers Focused on Mobile,&#34; PYMNTS.com, July 30, 2015; C. Shu, &#34;Rakuten Opens New Research Centersin Boston and Singapore,&#34; TechCrunch, July 29, 2015; E. Brooke,&#34;Amazon Competitor Rakuten Acquires Virtual Try-On Service Fits.Me,&#34; Fashionista, July 13, 2015; I. Lunden and N. Lomas, &#34;RakutenBuys Virtual Fitting Room Startup Fits.Me in a Fashion CommercePlay,&#34; TechCrunch, July 12, 2015; D. Loo, &#34;Rakuten to Raise $1.5 Billionin Japan, Overseas Share Sale,&#34; BloombergBusiness, June 3, 2015;&#34;Rakuten Forges Ahead in English,&#34; The Japan Times, May 23, 2015;S. Buhr, &#34;Rakuten Is Looking to Acquire PopSugar for $580 Million,&#34;TechCrunch, April 13, 2015; B. Einhorn, &#34;Japan's Amazon Has BiggerDreams,&#34; BloombergBusiness, April 9, 2015; www.rakuten.com, ac-cessed August 21, 2015.• Rakuten acquired French e-commerce portal PriceMinister(www.priceminister.com).• The Rakuten Institute of Technology opened locations in NewYork, Tokyo, Paris, Boston, and Singapore. The institute's mis-sion is to support both the company's research and develop-ment and its global expansion.Rakuten expanded its financial services into the United States,offering a credit card through a subsidiary of First National Bankof Omaha.Not all of Rakuten's acquisitions have been successful. As one ex-ample, the electronic bookstore Kobo (www.kobo.com), whichRakuten purchased in 2011 for $315 million, had not generated aprofit as of August 2015. Nevertheless, by the end of 2014, the book-store boosted its users by 25 percent, with 23 million customers.Further, Kobo helped stem the tide of red ink by concentrating onits mobile app to sell e-books.One key element of Rakuten's strategy of global diversificationhas been to encourage its employees to become fluent in English.And they succeeded. The average employee scored 802.6 pointsout of 990 on the Test of English for International CommunicationQuestions1. Discuss the reasons why founder and CEO Mikitani feels it isimperative for Rakuten to expand beyond the boundaries ofJapan. Provide examples to support your answer.2. How should Amazon and Alibaba combat the global expan-sion of Rakuten? Provide examples to support your answer.3. Describe any competitive advantages that Rakuten has in itscompetition with Amazon and Alibaba.

Accepted Answer

1. Reasons why the founder and CEO Mikitani feels it is Imperative for Rakuten to expand beyond the…