1. How do you assess Japan as a potential market for Toys “R” Us ?

Japanese market is the most viable place for foreign investment as the economy is in a perfect
shape. Many of the profitable running businesses of US are attracted towards Japanese market,
but the stringent regulations prevent new entrants protecting the local toy shop owners.
However, time has changed, and regulations are becoming relaxed enabling Toys R Us, a toy
company of US, enter into the Japanese market with its unique competitive advantage. Toys R
Us has been a threat to the small shop owners which are culturally connected to the people of
Japan. The company needs to have a strong alliance and competitive strategy in order to lead
the Japanese toy market

2. Toys being part of culture? What’s your point of view (POV)?

Although modern toys are immensely popular in Japan, traditional toys still play a
significant role in the lives of most Japanese children. Often these toys are folk toys that
reflect the customs, history, and legends of Japan

3. Is there any reason why the Toys R Us format wouldn’t sell in Japan as well as
it does in the US?

The US type toys do not sell in japan. Japan is more culturally sensitive nation. The dolls
they has to depict Japanese culture and figurines. But the American companies toys were
not appealing to Japanese people.

4. Given the structure of retailing in Japan, are the likely benefits of entry worth
the inevitable costs? How would you get around these costs?

 The market was wholly based upon products manufactured by local manufacturers, and
multinationals were highly discouraged to enter the market and increase competition with their
competitive prices. The main reason of this closed market was a system of price setting
between the manufacturers and sellers. There was a commitment to buy sell the toys at
manufacture stated price, with a guarantee of unsold product return from the manufacturer. A
kinship based market was hard to occupy, thus preventing many foreign companies to divert
from investing into Japan. The competitors included two prominent names of the toy industry,
Chiyaoda and Marutomi. Foresaid companies were considered to be the market leaders in the
toy industry of Japan.