Evaluate the Japanese Market for Toys “r” Us
Q1. Evaluate the Japanese market for Toys “R” Us.
In the position of Toys “R” Us, Japanese was very fascinating place market for them. Economy of Japanese is rapidly increased by 1980s. And also Japaneses birth rate is decreased as their life styles changed, such changes make possible to Japanese parents focus on their children who relatively less number then the past. So they can spend on their money to extra culture life for their children. Because of these reason, Japanese market was highly increased. When we see Exhibit 5, total retail sales of toys & games of Japanese was pointed $ 7,884.0 and this was implied that Japan had high scales of industry next to U.S. for these reasons, Japanese market had perfect situation for Toys “R” Us.
However, Japanese market was so difficult to build up their market place. First, the way of Japanese life is not suitable to western market style. Usually many Japanese own small market to maintain their retire life. And even customer was accustomed to use these stores that display only limited number of products but offer to personalized service. And also, they have their particular system that the prices are determined by major firms and they are supported to thousands of small affiliate stores. And the price of this called “suggested price”. Although these suggested prices were fixed high, customers want to communicate with retailers who own their favorite store. And also, wholesaler and retailer have symbiotic relationship for their profit. For these reasons, system of Japanese market was hardly changed.
And regulation of law also make hard to get in Japanese market. Japans Ministry of International Trade and Industry instituted the Large Scale Retail Law in 1973, as responding to the small retailers demands. As we see Exhibit 9, the Number of Outlets in Japan was slightly increased during 4 years. Like this, the all large retailers faced a rigorous screening process while they tried to go into markets, Toys “R” Us was not exception.
Q2. How does Toys “R” Us affect the Japanese toy retail industry?
While many factors such as high land price and labor