©REUTERS/Anton Bridge
Pre-reading questions:
I will read each question. Then, please answer them.
- What services or products do you know Rakuten for?
- What aspects of Rakuten’s services or products do you find particularly impressive or satisfying?
Vocabulary:
I will read the words, meanings, and sample sentences. Then, repeat after me.
- rushed /ruhsht/
- suffer /SUHF-er/
- debt /det/
- aggressive /uh-GRES-iv/
- strategy /STRAT-i-jee/
[adjective] – done in a hurry, or feeling that you must do something quickly
She made a rushed decision without considering all the consequences.
[verb] – to experience or show the effects of something bad
The business suffered significant losses due to the economic downturn.
[noun] – something, especially money, that is owed to someone else, or the state of owing something
Managing his debts became increasingly challenging after losing his job.
[adjective] – using strong, forceful methods esp. to sell or persuade
The company adopted an aggressive marketing strategy to expand its customer base rapidly.
[noun] – a detailed plan for achieving success in situations such as war, politics, business, industry, or sport, or the skill of planning for such situations
The company’s strategy focused on diversifying its product line and expanding into new markets to gain a competitive edge in the industry.
Article reading:
Please read the whole article. Then, I will check your pronunciation and intonation.
In 2020, Rakuten (4755.T) joined Japan’s telecom sector, launching a mobile service network to compete in the market. Despite some success, the move significantly affected its finances. Rakuten Mobile faced hurdles, resulting in financial setbacks. The plan to create a cost-effective network using cloud-based software and affordable hardware met obstacles, leading to increased expenses, network disruptions, and reputational damage due to rushed deployment.
Consequently, Rakuten’s parent company suffered consecutive operating losses of about $5.5 billion over 13 quarters, coupled with upcoming debt obligations of $5.4 billion within two years. By 2024, Rakuten aims to break even for its mobile unit, relying on increased subscribers and average revenue per user (ARPU). Achieving this goal is challenging due to intense competition with aggressive pricing strategies. Nonetheless, Rakuten remains committed to its goals, seeking to refinance debt and bolster its financial standing amid potential economic uncertainties. Rakuten’s resilience partly comes from its thriving businesses: its core e-commerce competes with Amazon Japan, and its online financial services units continue to drive profits. To address financial concerns, Rakuten has taken steps since 2021, like issuing new shares, selling holdings in Rakuten Securities, and listing Rakuten Bank (5838.T), generating about 800 billion yen ($5.4 billion). Analysts suggest Rakuten Card might go public next due to its pivotal role in attracting customers with a points program connecting e-commerce to other services.
Consequently, Rakuten’s parent company suffered consecutive operating losses of about $5.5 billion over 13 quarters, coupled with upcoming debt obligations of $5.4 billion within two years. By 2024, Rakuten aims to break even for its mobile unit, relying on increased subscribers and average revenue per user (ARPU). Achieving this goal is challenging due to intense competition with aggressive pricing strategies. Nonetheless, Rakuten remains committed to its goals, seeking to refinance debt and bolster its financial standing amid potential economic uncertainties. Rakuten’s resilience partly comes from its thriving businesses: its core e-commerce competes with Amazon Japan, and its online financial services units continue to drive profits. To address financial concerns, Rakuten has taken steps since 2021, like issuing new shares, selling holdings in Rakuten Securities, and listing Rakuten Bank (5838.T), generating about 800 billion yen ($5.4 billion). Analysts suggest Rakuten Card might go public next due to its pivotal role in attracting customers with a points program connecting e-commerce to other services.
Comprehension questions
I will read each question. Then, please answer them based on the article.
- When did Rakuten enter Japan’s telecom sector, and what challenges did they face with their mobile service network launch?
- What financial setbacks did Rakuten Mobile encounter due to the issues with their cost-effective network plan?
- How many consecutive operating losses did Rakuten’s parent company suffer over the past 13 quarters, and what upcoming debt obligations did they face within two years?
- What are Rakuten’s goals for its mobile unit by 2024, and why is achieving these goals challenging?
- What steps has Rakuten taken since 2021 to address financial concerns, and what role does Rakuten Card play in attracting customers?
Discussion questions
I will read each question. Then, please answer them.
- Have you ever seen or heard a company struggle financially when entering a new market or launching a new product or service? If yes, how did those problems affect what you thought about the company and its plans? If not, can you think about how money troubles might impact what a company plans to do in the future and how stable it is?
- How do you think Rakuten’s expansion into the telecom sector might affect its overall business and competitive position in the market?
- Do you believe that other companies using really competitive prices will make it hard for Rakuten to reach its goal of breaking even in its mobile business by 2024?
- Do you think Rakuten’s taking big financial risks by entering Japan’s telecom industry shows a daring approach that innovative companies often have, or do you think it might mean they made some mistakes in their planning? Why?
- Rakuten is doing things like selling parts of its business and making its bank public to deal with money problems. Do you think these actions are a good way to keep the company steady, or do you worry they might make Rakuten lose focus on what they’re best at in the long term? Why?