M. Edgar Barrett and Christopher D. Buehler
The Ito-Yokado Company consisted of three business segments: Superstores and other Retail Operations (lto-Yokado superstores, Daikum discount stores, York Mart, York Benimaru, Robinson's Department Stores, and Oshman's Sporting Goods); Restaurant Operations (Denny's and Famil Restaurants); and Convenience Store Operations (7-Eleven Japan). Ito- Yokado had just acquired struggling Southland Corporation and transitional long-term strategies for Southland would have to be developed. Although diversified, Southland's largest business segment was its Stores Group responsible for operating and franchising of over 7,500 7-Eleven convenience stores. Masanori Takahashi, a senior strategy analyst for Ito-Yokado was considering the possibility that long-term strategies that had been successful in Japan also could be successful in the United States was vastly different than that of Japan; nevertheless, he was confident that through careful and thorough planning, the goal of making Southland profitable could be achieved. Learning Objectives
1.To acquaint students with the development of a Japanese company and its move into U.S. markets. 2.To acquaint students with elements of "Japanese management" through Ito-Yokado's "operation reform project" and to induce them to question the transferability of marketing across national boundaries. 3.To familiarize students with the nature of retailing in Japan. 4.To show how Southland Corporation became subject to acquisition by Ito-Yokado Company, Ltd. 5.To present the nature of the convenience store industry in the United States.
In mid-March 1991, Masanori Takahashi, a senior strategy analyst for Ito-Yokado Company, was preparing to depart for Dallas, Texas. Once there, he would be leading a team of Japanese and American managers responsible for establishing transitional and long-term strategies for the Southland Corporation. After nearly an entire year of intense bargaining and negotiation with Southland and its creditors, Ito-Yokado acquired Southland on March 5, 1991. Takahashi began working with Ito-Yokado in 1972 as an assistant manager of one of the company's superstores. He had advanced to the position of regional manager by 1979. In early 1981, Ito-Yokado's Operation Reform Project was conceived and Takahashi was asked to be a member of the team leading the project.
During the first few months on the team, Takahashi quickly understood certain crucial aspects of the new project, most notably the use of point-of-sale (POS) systems. Implementation of the project advanced most rapidly in Ito-Yokado’s 7-Eleven Japan subsidiary, so he also had become familiar with the operating environment of convenience stores in Japan.
As Takahashi left his Tokyo office, he could not help but feel both excitement and apprehension regarding his new position. He had gained confidence while involved with the successful Operation Reform Project at Ito-Yokado's superstores and 7-Eleven Japan convenience stores, but this experience might or might not prove to be useful in respect to Southland.
Ito-Yokado's founder, Masatoshi Ito, was born in 1924 and graduated from a commercial high school in Yokohama. He worked briefly at Mitsubishi Heavy Industries before joining Japan's war effort in 1944. After World War II, he worked with his mother and elder brother at the family's 66-square-foot clothing store in Tokyo. 1 The store was incorporated as Kabushiki Kaisha Yokado in 1958. By 1960, Ito was in sole control of the family business. During that same year he made his first visit to the United States.
In 1960, Ito visited National Cash Register (NCR) in Dayton, Ohio. While in the United States, Ito was introduced to terms such as "supermarkets" and "chain stores" by NCR, which was interested in selling cash registers to Japanese retailers. In Japan, retailing was...