Unsuccessful American Business Ventures in Japan
Wendy’s was a failure in Japan due to the customer trend. Wendy’s consolidated revenues were $636.3 million, an increase of 4.1 percent compared to $611.4 million in the third quarter of 2011. In Japan, Wendy 's sales amounted to 6.2 billion yen ($70 million) in sales in its fiscal 2009 (Gilbert, 2009, para 2). Wendy’s revenue in Japan was not comparable to its American counterpart. This resulted in all 71 Wendy’s restaurants to shut down on January 2010. Japanese consumers desire high quality, nutritious, tasty, and safe food at a reasonable price. In the early 2000s, after a few Japanese cows were inflicted with mad cow disease, consumers boycotted beef nationwide, causing a severe setback in the dairy industry (Gilbert, 2009, para 2). Japanese consumers are skeptical about food safety.
Competition was a main external factor to Wendy’s failure. According to Gilbert (2009), “Japan is McDonald’s largest market outside of the United States. It has nearly 4,000 restaurants there.” McDonald’s dominates the fast food business in Japan. Wendy’s found it difficult to compete with McDonald’s since it was in the market longer and also McDonald’s understands the cultural aspects of Japanese customers.
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