Major Events of Toys R US for Expanding into Japan - Essay Example

TOYS R US CASE ANALYSIS Answer Major events of Toys R US for expanding into JAPAN Toys R Us is one of the largest toy store of the world. It has expanded its market in various parts of the world. It deals with different kinds of toys and other children products. The company expanded its business in Japan. Some vital events took place in the company while launching its business in Japan. Those events are as follows: Toys R Us (TRU) had made agreement with McDonalds of Japan for establishing its business in that country. It was very difficult for the company to start up its business in Japan because of huge difference in the culture of Japanese people than that of UK, USA. So the company formed partnership with McDonalds which helped the firm to understand the business process which other companies follows for establishing its position in Japanese market. 80% of the company was owned by TRU and rest of the shares was owned by McDonalds of Japan. This partnership became very beneficial for TRU to start its business in Japan. TRU entered in Japanese market at the time of recession. The people of that country at were focusing of low priced products. For this reason the company introduced a catchy tagline for attracting customers in its stores. TRU provided discounts on its various products and maintained a good quality. The tagline of TRU in Japan focused on the low price and quality of its products. This helped the company to become popular among the Japanese people. By this even TRU was successful in establishing its position in the market of Japan. It also helped the company to create its customer base in that country. For expanding its business into Japan TRU had to set up stores in different parts of the country. The company required 3000sq ft area for establishing its retail stores. But according to the law of Japan government establishment of large retail stores were prohibited. The company TRU was able to change this law of Japan. The company opened its store of 3000sq ft in Japan in 1991. Soon the company opened its many other toy stores in different parts of this country. Therefore for establishing its business TRU changed the one of the government laws of Japan. TRU improved some of its internal factors for launching its business in Japan. The company introduced export managers in its business system for analyzing and evaluating the market of Japan. It helped the company to get a qualitative and quantitative idea about Japanese market for establishing its business. The organization teamed up with McDonalds of Japan for evaluating its new business environment. It helped the company to understand its customers in a better way and according to that providing various products and services (David, 2009). TRU also introduces sales associates which was a very new concept in the business process of Japan. It facilitated the company to reach maximum customers in a short span of time. By this process the company expected to increase its profit by acquiring more customers in its business. All of these major events played a major role in expanding its business in the market of Japan. 2. Answer Japanese consumers Japan has a huge number of potential customers which attracted TRU to establish its business in this country. The customers of Japan high highly concerned about the quality of product that its price. For this reason the company maintained a standard quality in its product which satisfied the need and requirement of its Japanese customers. TRU was also concerned about the benefit of its customers. For this reason the company priced its product low for befitting its customers at the time of recession. TRU implemented diversified business strategies for establishing its business in this country. Its diversified business policies were designed after considering different needs of its customers. The firm incorporated creative and innovative business strategies to satisfy its customers (Porter, 2013). The environment of TRU stores was developed to encourage its customers to purchase more products. The company delivered high quality of experience to its customers at the time of their shopping. By this process the company is able to establish a unique trend in merchandise mix and providing different types of services to its customers. TRU also provided online shopping facility to its customers of Japan. It helped the company to establish a new way in to enhance its business process. The online stores of TRU also sell different products for parents and juvenile products. Moreover the people of Japan spend a large amount of money on luxury products. Therefore this influenced the company to establish its business in Japan for selling various types of luxury products for children. Japanese Retailer Toy market of Japan is small. The country had many small traders who deal in this market. Japanese market was dominated by small toy stores which were owned by general retailers. In this country there were 500 general retailers who were involved in selling toys. Significant portion of their income was generated from the sale of toys. Internet facility had a great impact on the business expansion of TRU. This helped the company to establish its business position in a better way than the Japanese retailers in this industry. Establishment of large retail stores by the retailer was prohibited Japan’s government (Wintzer, 2007). Initially the company faced problems regarding this but for establishing its business the TRU was able to change the law which also benefited other Japanese retailer in their business. Technology and Staff in US and Japan TRU maintain a good quality of staffs in company. In the retail stores of both US and Japan many staffs are present for satisfying the customers by providing good quality of services and products. They play a vital role in delivering high quality of shopping experiences to the customers. In US the friendly staffs of TRU are very knowledgeable about the product. They behave in a very pleasant way with the customers. TRU had hired all Japanese people as their staffs in the retail stores of Japan. The company also used advanced technology in its retail store operations in both of these countries (Bamberger and Meshoulam, 2000). TRU introduced online business for selling its products in these countries. 3. Answer Comparison of US and Japanese culture Figure 1:Hofstede Model (Boxall and Purcell, 2003) US and Japan is very different from each other in the category of long term orientation. Japan has strong links with its past society from which the country implements different plans and strategies to deals with future challenges. But US has weak connection with its past society. US deal with challenges by implementing plans according to the situation. The impact of this will be TRU will follow traditional ways of Japan for dealing with business challenges in this country. But in US the company will focus more on time and situation to resolve problems and implement strategies (Boxall and Purcell, 2003). Power Distance category is almost similar in both the countries. Japan and US believe in hierarchical position. Power is distributed according to the position. The advantage of power distance is the organizational structure of TRU has many hierarchies. Therefore any business decisions are well analyzed at every level of the business before implementing its. It helps the company to implement effective business strategies. 4. Answer TRU implemented category killing strategy to establish its position in the market of Japan. By implementing this strategy the company was able to attract many customers in its business. At that time in the market of Japan no such big players were present in this industry. Therefore this strategy helped the company to acquire many customers for its business. According to me this is the right strategy for the company. TRU used sales associate in its business in Japan which was not used earlier by any of the company. This became a leadership activity for the company. For implementing its business strategies the company trained its employees which helped them to do their job very efficiently (Peng, 2013). TRU followed Laissez Faire leadership model in its business process. According to this model employee performs their work under the guidance of strong leaders and managers who supervise the employees in the retail stores. If I was the business leader I would have managed the business expansion of TRU in the same way as the company has done. This is because the implemented strategy of TRU helped the business to attract many customers in a new market. It also contributed a lot in establishing a high quality of service by the employees which satisfied the customers and maintained a well organized business process. As per my opinion I would have managed the business expansion of TRU in the same way because I think the way which TRU had chosen was the most suitable way for the business to expand in Japan’s market. 5. Answer Month January February March April May June Analyzing culture of Japanese people             Analyzing culture of Japans business environment             Agreement with McDonalds of Japan             Setting up stores             Advertisement             Acquiring customers             References Bamberger, P., and Meshoulam, I. (2000). Human Resource Management Strategy. CA: Sage. Boxall, P., and Purcell, J. (2003). Strategy and Human Resource Management. Basingstoke: Plagrave. David, F. R. (2009). Strategic Management Concepts. 12th edition. New Jersey: Pearson Education International. Peng, M. (2013). Global Strategy. USA: Cengage Learning. Porter, M. (2013). On Competition. USA: Harvard Business Press. Wintzer, E. (2007). Global Competition and Strategic Management. Germany: GRIN Verlag. Read More