Rakuten Case Study

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1. According to Applegate (2009) a business model defines how an organisation interacts with its environment to define a unique strategy, attract the resources and build the capabilities required to execute the strategy, and create value for all stakeholders. A business model frames the fundamentals and can be used to guide strategic analysis and decision making. It forms the foundation for how executives about opportunities to pursue, businesses to launch or buy, activities to perform, talent to hire, and ways to organise to deliver value to stakeholders. Rakuten was launched in 1997 as an online shopping mall, this was its business context. It functioned similarly to a traditional brick-and-mortar shopping mall as they just provided an area to trade and didn’t hold any inventory itself. Mikitani and Honjo went with the shopping mall idea as they didn’t have people and money to start up anything else. They also couldn’t afford to hold inventory. They recruited as many shops as possible to be a part of the online shopping mall, thus eradicating the need for them to hold inventory. They saw an opening in the market to be an online shopping mall as few merchants had the technical ability to Internet shops, this was their market position. Rakuten’s customer base was the merchants that affiliated to it and not the merchants customers. With the development of its software platform and their different call centers they were able to solve a lot of the problems that their customers faced. Rakuten hired programmers to develop Rakuten Merchant Sever (RMS) which allowed computer novices to be able to create and edit their own virtual storefronts. It also allowed merchants to process transactions, evaluate Website traffic and communicate with customers. Mikitani considered acquiring a U.S company that had developed an online shopping mall platform but rejected this idea as he

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