RESTRUCTURE PLAN

Kinokuniya Book store marketing plan

Osaka August 29, 2011

Neville Greening

Introduction and Restructure Plan OutlineTable of contents

1: Introduction (Brief history of Kinokuniya) ……………..Page 3

2: Restructure Plan

a) Past performance facts……………………………………..Page 4

b) Present performance facts…………………………………Page 4

c) SWOT Analysis………………………………………………Page 41: Strength2: Weaknesses3: Opportunities4: Threats

d) Competition…………………………………………………..Page 5

e) Inventory offerings………………………………………….Page 5

1: Books2: CD’s3: Videos 4: Artwork 5: Magazines6’ Stationary

f) Problems to be discussed…………………………………..Page 6

1: Presentation (Interior & Exterior image)2: Company Portfolio (New approach)3: Company Clock Speed (Systems out-dated)

4: Flexibility (Relax company policies)5: Competitive innovation (No desire to innovate)6: Lack of profit orientation (Not hungry enough) 7: Not enough focus on customers (More emphasis on customers)8: Management reconstruction (Training programs) 9: No shared vision or long term goals10: Returns are low (Sales have decreased dramatically)11: Team working (Group work)12: Advertising in an open market.

g) Possible keys to success……………………………………Page 7

1: Company reform (Rebuild Interior & Exterior)2: Create new portfolio (Creative approach & clear presentation)3: Clock speed systems (Upgrade systems) streamline 4: Flexible company policy5: New ideas for innovation6: Staff to undertake sales training programs7: Better customer approach and staff presentation8: Training program for management 9: Discuss company outlook and long-term goals10: Marketing strategy (Sales forecast)11: Group working to generate better performance12: Advertising

h) Brief review of major issues…………………………………Page 8

i) Contingency plan.……………………………………………..Page 8

j) Conclusion……………………………………………………...Page 9

k) Reference list…………………………………………………Page 10

1: Company Introduction

Founded in 1927 by former president Moichi Tanabe, Kinokuniya opened its first book store in the Shinjuku district with just five employees. The busy bustling streets of Shinjuku were an ideal location for the store as it had easy access to transportation and a thriving downtown area.

During the Second World War the store was destroyed by an air raid that burnt it to the ground. Kinokuniya re-opened its doors in December 1945 and over the next few years branched out nationwide with stores opening in Osaka, Kyoto, Sapporo and etc.

Today, Kinokuniya bookstores operate in 64 major cities nationwide and 24 branches worldwide. In total it roughly employees 4,000 staff and has a capital of (JPY 36 million yen) around (US 468 million dollars). The company first began its business selling lumber and charcoal. Kinokuniya translates to, “Store of wood Province”

Todays Business Profile

1) Registered company name: Kinokuniya Co.Ltd2) President: M.Takai3) Main Business: Sales of Audio visual teaching equipment,

Office equipment, Books, Magazines, English teaching material, Art Gallery and Stationary.

4) Major suppliers: Japan Publications sales, Tohan, and other Major foreign publishers.

5) Main customers: Universities, Government Agencies, Private Companies and the general Public.

6) Main financing banks: Mizuho Bank, Tokyo Mitsubishi UFJ, Sumitomo Mitsui Banking Corporation.

2: The restructure is for its sister branch in Umeda, Osaka.

As competition has increased over the years there are now three major bookstores that have recently opened its doors in the neighbouring vicinity. Kinokuniya Osaka has had its fair share of the market for the last fifty years, but with newcomers popping up, this has dwindled. The profit margin in today’s market has dropped by forty percent

a) Past performance facts: During the bubble economy in the early eighties, KK-bookstore had happily reaped the benefits of a strong economy and prospering market. It strongly held a large share of the market.

b) Present performance facts: In todays very competitive market KK-bookstore has lost a substantial chunk of the consumer market to its nearest rival, Junkudo & Maruzen. The continuing slide would seriously affect the company’s performance and cause it to suffer severe consequences.

c) SWOT Analysis

1: Strengths: Long presence within the Japanese market (Experience) carries a reasonable amount of inventory. Long term customer base, large financial backing by major banks, global organization.

2’ Weaknesses: Lack of innovation, no vision for the future, poor company portfolio, unskilled staff, flexibility, customer care, efficiency, time management.

3: Opportunities: Move forward in a turbulent market, retrieve a better percentage of the market, profit increase, increased performance, skilled staff, and better image.

4: Threats: New competitors within the same market, loss of customers to rival companies, lost sales, market downturn

d) Competition

Competition for Kinokuniya bookstore has dramatically increased over the years and now there are three major players operating in the surrounding neighbourhood. The largest competitor is Junkudo & Maruzen who have aligned forces to become one of the largest bookstores in Japan, and stocking around two million books. Others stores that operate in the neighbourhood are, Nellies bookstore, Ashiya main street store, Libraries arcade and of course we must include, Amazon Japan as a fierce rival. In comparison, Junkudo & Maruzen has a better range of books to suite all walks of life, especially foreign books and has a much more relaxing atmosphere. They offer lounge reading sections for customers to take their time and carefully browse through books, magazines and other related material. Prices are equally the same, but efficiency and the cosy sit down atmosphere do make a difference.

e) Inventory offerings and other company projects

1: Books (250,000 in stock) Osaka Branch, Japanese and Foreign reading material, Magazines, Audio-visual, News Papers…2: CD’s and learning software3: Videos on education4: Stationary, both public and private5: Systems, Electronic information services 6: Publishing, production of audio-visual 7: Management of theatres and art galleries 8: Production of Bibliographic databases 9: Non-profit Organization10: Sponsor for young talented artist within Japan

f) Problems to be discussed

1: Osaka branch image hasn’t been changed in forty years. This includes both the front entrance and interior display.

2: Company portfolio lacks enthusiasm and character

3: Company clock speed systems are out-dated, still using traditional methods and losing time between sales. Information systems obsolete.

4: Flexibility policy to be looked at.

5: Lack of company innovation and no desire to be creative.

6: Lack of profit orientation and no push to add sales, not hungry.

7: Not enough focus on customer care, too many distractions with in house work. Customer service has deteriorated.

8: Management reconstruction needed. Motivation and efficiency has decreased.

9: No shared vision or long term goals. Company outlook needs addressing.

10: Returns have been low due to competition.

11: Team-working is not enforced, individual task are too slow.

12: Advertising needs attention to generate more awareness and sales.

g) Possible keys to success

1: Company facelift both external and internal. Cost to be discussed with the financial department, designers and board of directors.

2: A more creative company portfolio to clearly state its policies future goals and company benefits. English webpage page with more information.

3: Company clock speed systems are currently out dated. Update systems with better computerised equipment and IT

development. Online systems to better search inventory, Micro-Marketing systems introduced.

4: Flexibility on company policies to better improve sales. Discounts to apply to online and telephone sales.

5: Competitive innovation for increased sales. New ideas and new inventory to boost profit. Category killer is an innovate tool to help increase profit.

6: Lack of profit orientation in today’s modern organization will only sink the company. Both management and staff need the desire to work for sales and be a lot hungrier.

7: Ignoring customer needs leads to bad customer satisfaction. Focusing on the needs of the customer improve better relationship and continuing sales. Positive feedback is always a welcome sign of improvement.

8: Management reconstruction required to help improve efficiencies.

9: Shared vision with long-term company goals for future outlook. Senior and junior management strategy.

10: Company returns have been low due to rival competitors. R&D to look at possible solutions to improve market share.

11: Team-working is a must to help improve smooth and efficient operations. One source of information is just not enough in today’s organization. Management and staff working together to meet a number of challenges that the organization may encounter.

12: Advertising to increase awareness, sales, profit. Using internet related sites, pamphlets, visuals and other marketing related links.

h) Brief review of Major issues

We have looked at a number of issues that KK-bookstore has encountered and the challenges it may take to help restructure its store.

1) Company portfolio2) Speed clock systems3) Company innovation and vision for the future4) Inventory5) Possible facelift depending on its budget6) Customer focus7) Marketing strategy

i) Contingency plan (Plan B)

Go with the major issues first and work with the less important issues later. Address what is most needed for the improvement of the company now. Financial department and R&D to discuss future issues.

j) Conclusion

Finalize major issues for restructure plus terms and conditions.Agreement and secure contract.

Reference list

Book web Australia, Kinokuniya Books stores Australia Pty. Limited (1996) Available online from:http://bookweb.kinokuniya.co.jp/indexohb.cgi?AREA=06

(Accessed: 24/08/2011)

Homepage, Available online from:http://bookweb.kinokuniya.co.jp/(Accessed: 24/08/2011)

Kinokuniya cooperate data, Available online from:http://www.kinokuniya.co.jp/en/(Accessed: 24/08/2011)

Headquarters and Main contacts, Available online from:http://www.kinokuniya.co.jp/en/headquarters.html(Accessed: 24/08/2011)

International stores, Available online from:http://www.kinokuniya.com/(Accessed: 24/08/2011)

Company location and information, Available online from:http://www.kinokuniya.co.jp/company/(Accessed: 24/08/2011)

Domestic stores, Available online from:http://www.kinokuniya.co.jp/en/dsotores.html(Accessed: 24/08/2011)

Overseas sales offices, Available online from:http://www.kinokuniya.co.jp/en/osales.html(Accessed: 24/08/2011)