Analysis of Toys R Us Case in Japan

2823 Words Dec 30th, 2010 12 Pages
Analysis of Toys R Us Case in Japan There are various fundamental basics that any organization large or small scale needs to follow when setting up a new company locally and also when they venture across borders in international entrepreneurship. Effective management is one important aspect that will ensure that the company successfully achieves its goals and objectives efficiently. Management consists of organizing, planning, and leading (Adler & Gundersen 2008). Many businesses today define management as simply the things that need to be done to keep the organization going. However, for the business to penetrate the market, and experience continuous growth while maintaining healthy competition, it requires good leadership skills, …show more content…
In their analysis, Toys R Us thought this would be a good market to invest in but further research revealed that the retail industry would be hard to penetrate and with its plans of using the discount formula would be an uphill task in this market. Most of the toy stores were small domestically owned shops and displayed almost similar goods. They bought their goods from wholesalers who deal directly with the manufacturers and the retailers sell their products at the manufacturers’ suggested price. The business chain of manufacturers , wholesalers, distributors and retailers maintained their long tern relationships on personal commitment rather than on competitive terms. Conversely, the American market system is very different from that of Japan. Businesses in America try at most to reduce the chances of intermediaries and aim at reaching the customer directly. They find the Japanese system cumbersome and the burden of the long chain falls on the consumer. They cannot expand their businesses due to imposed regulations and seem to enjoy the benefits that are given by the manufactures while they can achieve more if they are allowed to expand and dictate their own prices. Toys R Us saw this as a great opportunity to break this tradition and introduce discount prices that would change the toy market for the better. However, it proved to be a hard task for the company to break into the market due

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