Toys R Us Case Study.

Only available on StudyMode
  • Download(s) : 244
  • Published : January 17, 2007
Open Document
Text Preview
Created in 1957 Toys "R" Us (TRU) has become one of the leading outlets for toy retail around the world and has achieved globalisation by breaking into one of the most testing markets in the world. Although Japan is part of the triad, being one of the biggest economies in the world, it has always been a difficult market for foreign investors to crack due to so many cultural differences, legal restrictions and other such trading barriers. By breaking into the Japanese market, it would mean that TRU could achieve true globalisation.

In 1992, TRU decided to try and enter the Japanese toy market, but faced many challenges if they were to be a success. In the 1980's annual retail sales in Japan grew by 94% and children's products accounted for a significant proportion of this. It showed that the desire for products that TRU produced was there, but they needed to find a way into the localised and fragmented toy market that was present in Japan at that time.

Cultural differences had proven to be a problem in the past with companies such as McDonalds investing in Japan and not completing efficient research on colours for example. After this setback McDonalds realised that a relationship with local businesses or organisations with local knowledge was necessary and worked with businessman Den Fujita who made McDonalds Japan a great success. TRU followed suit and made a strategic alliance with Den Fujita, as he appeared to be the only business leader who had succeeded in bringing foreign retail business into the restrictive market. With very restrictive laws on the size of retail outlets in Japan, this alliance would prove useful in order to build the large TRU warehouse's that were part of the TRU brand.

It was important to TRU to enter the Japanese market keeping their brand image intact and business models aligned with those used in every other market they operated in. Part of their brand image was the "category killer" which meant they offered low prices...
tracking img