Toy Industry Case Study Example | Topics and Well Written Essays - 2000 words

Toy Industry - Case Study Example Therefore, the timing TRU chose to try to enter Japanese market was an advantage. The first reason is because they realized the changing political direction in Japanese retail sector and could achieve a first mover advantage if and when the laws are changed. Another advantage TRU recognized was the changing shopping demands in Japanese culture. The change in the culture stems from a higher disposable income, more education and free time. This results in more Japanese traveling over seas and exposure to global or international products, stores and culture. The new trend moved towards price consciousness and low prices with preference to specialty retailers with large selections. This is an advantage because TRU strategy is based upon price, selection and keeping stores in stock (case). Thus the changing Japanese shopping culture and political climate favored TRU's expansion into the market. When trying to enter the Japanese market TRU faced major obstacles in the forms f government regulations and business customs. As mentioned earlier the "big store laws" prohibited large foreign (even domestic) companies from operating in Japan without consent from local store owners in the area. TRU overcame these obstacles by using strategic contacts that helped put pressure on MITI (Ministry f International Trade and Industry) to revise the current laws. From the help f US lobbyist and government, mainly US trade representatives, Den Fujita, president f McDonalds Japan, and the for-mentioned opposition from the political climate, discussions were held addressing the issues in the Structural Impediments Initiatives in 1989. Through TRU strategic contacts' pressure, negotiations were reached that allowed favorability for TRU's market entry (case). Other contacts TRU utilized to enter the Japanese market are Nintendo and McDonalds. Nintendo, a large toy manufacturer, and TRU have an established long term business relationship that served as an advantage when Japanese suppliers refused to sell directly to TRU. Because Nintendo publicly announced they will directly supply TRU, other manufacturers began to follow Nintendo. McDonalds Japan was also a critical factor in TRU's market entry. Briefly, the partnership between the companies allowed valuable transfers f re-sources including market research, network connections and the knowledge f business practices in Japan. The formation f MTB Rengo group which comprises f TRU, McDonalds and Blockbuster also helps to maximize consumer traffic by building mini-malls with large parking lots that have in essence, one stop shopping convenience (Alexander 2004). "More families visit McDonalds in Japan than any other business and we look forward to working with them to effectively leverage this incredible traffic (www.toysrus.com)." McDonalds's will be further examined in the following section. Established, Experienced, and Adaptable Having already established their international presence, TRU has valuable experience in the foreign market and are able to adapt to its demands. This