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Toys R Us Japan

In: Business and Management

Submitted By lemosjanesm1
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Toys “R” Us Japan (Case No. 3)
I. Problem Statement:
Eager to enter the world´s second largest toy market, Toys “R” Us executives begin in the late 1980s to formulate strategies for opening large discount toy stores in Japan. However, the American company faced setbacks due to Japanese store-size regulation, application procedures, and a long-standing multi-layered distribution system. Continued effort and the acceptance of a Japanese partner enabled the company to prepare for the opening of a Toys “R” Us outlet in 1991. Faced with a lack of direct distribution deals and high land and labor costs, executives of Toys “R” Us Japan worried about the ultimate success of their new venture. Therefore, Toys “R” Us management must decide if entering the Japanese market is worth the effort it will undoubtedly entail. And if they decide to enter the market, they need to consider how to structure their entity; whether to modify their retail format to fit the Japanese market; and how to handle the political outcry that will inevitably accompany their investment.
II. Alternatives:
a. Status Quo - Continue to work with Mr. Fujita and McDonalds Japan to enter the Japan market
b. Abandon the alliance with Mr. Fujita and McDonald's and work directly with the toy manufacturers to build the Toys “R” Us store and retail network
c. Change strategy to have many "small shops" in Japan rather than the "big box" category killer that Toys “R” Us is known for in the US
III. Analysis:
a. Status Quo - Continue to work with Mr. Fujita and McDonalds Japan to enter the Japan market.
In 1971, McDonalds approached Mr. Fujita and asked him to join them in introducing U.S style fast food in Japan. What Mr. Fujita had brought to McDonalds was the retail experience, political influence, vision and a unique understanding of both the Japanese and American cultures which was equally...

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