1. Key features of the Japanese distribution system
The distribution channel in Japan has a high number of intermediaries when compared to the United States. Nintendo, for example, uses a network of 70 affiliated distributors to distribute its products. It is based on long-term personal relationships. This system developed because in Japan “the merchants were restricted by law to their local patch, and retailers were encouraged to mop up labor from the land”. An additional reason is the preference for fresh food and small quantities due to small kitchens and little storage space. Even until today, the small mom and pop shops are higher valued by society than the mass discount retailers. Profit is not the highest priority of a shop owner but rather personal loyalty to his or her distribution keiretsu.
2. Japan as a market for Toys “R” Us Given the differences of doing business in Japan from the United States and the specific business strategy that Toys “R” Us uses in all of its worldwide markets, I would not consider Japan a good market. The company’s strategy and objectives do not agree with the values of Japan’s society. First of all, Toys “R” Us is a foreign company and therefore, does not have any long-standing personal relationship with Japanese businesses. Secondly, it is able to sell toys at a discounted price because it buys these in bulk. Due to the high rents in Japan, it might not be able to have a large selling space as it is available in its other markets. Consequently, these discounts will be unavailable and Toys “R” Us has to compete with well known Japanese toy stores, providing toys at the same or at an even higher price.
The Business plan on Range Of Products Pokemon Market Product
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3. Adaption of the business model to the Japanese Market
Toys “R” Us would have to adjust its business model closer to the Japanese model of smaller stores and the building of its own distribution keiretsu through loyalty and personal efforts to attend to Japanese customers, which will most likely take years before any genuine trusting relationship can be achieved. This will mean low or no profitability because Toys “R” Us will be unable to replicate the buying structure that it uses in its other markets of buying directly from the manufacture and not using a wholesaler or distributor, which only adds costs and unwanted steps in the distribution process. The fact that the schedule of store openings was reduced from six down to one in 1991 shows clearly that the company’s entry into the Japanese market is unsuccessful. 4. Entry Strategy
Toys “R” Us had a good idea of entering the Japanese market with a local partner that knows the business environment. However, it does not follow the tradition of shared efforts between manufacturers and toy wholesalers and would buy directly from the manufacturer without involvement of several wholesalers. Toy manufacturers may not supply Toys “R” Us out of fear of being cut out of existing partnerships. Moreover, Japanese consumers place a high value on individual and excellent customer service, which is provided in the traditional mom and pop shops. Toys “R” Us may not be able to provide such personal service because of the size of the store and number of products offered. Superior customer service adds costs to operations and as a result increases the price of the toys. The competitive advantage of selling at a discount price will be lost. Regarding the choice of Den Fujita as the Japanese partner, it would be in Toys “R” Us’s best interest to end the corporation immediately. Fujita’s openly criticized persona in Japanese society unnecessarily decreases brand image.
The Business plan on Pearson Custom Business Resources
Carrefour is global brand whose market edge is ideal. The supermarket chain is revered across the world. It is keeping this in mind that such a brand should always seek to have and maintain this success; key aspect would be to ensure that all their potential customers are reached wherever they are in the globe. One of the ways to ensure this is achieved would be the indulgence of information ...
