Toys R Us

1. Was Japan an attractive market for Toys “R” Us? Do you think there were any cultural obstacles to product acceptance? Strong competitors? a. Japan was a very attractive market for Toys “R’ Us. While there are cultural differences between the United States and Japan, the United States and our products are generally accepted by the Japanese. The use of McDonalds in the transition into Japan also helped Toys “R” Us. Toys “R” Us faced a few competitors when they entered Japan, but there was no strong competitor. In Japan at the time there was no such thing as a “toy superstore” so they quickly dominated the market. Toys “R” Us only faced competition from other popular brands producing toys and selling them in specialty shops. Some brands were Bandai, Nintendo, Sony and Koei. 2. What were the entry barriers into Japan? Any culturally based barriers, in terms of how to do business? a. There were a few entry barriers into Japan, first being that although there was not a toy superstore already in existence, there were tons of small toy stores in operation. Toys “R” Us was unsure how they would be met by the public. There were also high import barriers. Japan also held the market in characterized toys as well as video games. When they entered Japan, they were met with strong opposition from Japanese toy manufactures who were petitioned by the small shop owners to boycott Toys “R” Us. 3. How did Toys “R” Us manage to cross the entry barriers into Japan? What alternative modes of entry could they have tried? a. Toys “R” Us managed to cross the entry barriers into Japan by importing their own product from the United States. They also were able to gain customers by carrying multiples of the same products. The Japanese were use to the small retailers running out of a product, but Toys “R” Us promised to have the product in plentiful stock. The import barriers were met by creating a distribution house in Japan where inventory was sent and counted rather