CASE ANALYSIS GROUP 4

Member:
LUISA J. GUNDAYA
EVANGELINE TOLEDO
Robelyn Rosales
Stephanie Joyce Cana
Jimmy Lasacar
Joniel Argawanon
 WALMART IN JAPAN

To states that Walmart wants to use best practices from its U.S. stores to help its
Japanese affiliate, Seiyu, function better. To entails putting in place cutting-edge information
systems, maintaining strict inventory management, utilizing international supply chains to get
low-cost goods, launching everyday low prices, enhancing customer service through staff
development, expanding store hours, remodeling current locations, and opening new ones. To
improve the performance of its Japanese subsidiary, Seiyu, by transferring best practices from
its U.S. stores. To implement advanced information systems, tight inventory control,
leveraging global supply chains for low-cost goods, introducing everyday low prices,
improving customer service through employee training, extending store hours, renovating
existing stores, and investing in new ones. to boost productivity, gain market share, and
achieve profitability in the Japanese retail sector.

1. Why, historically, has the level of FDI in Japan been so low?

 Japan isolated geographical location and historical factors.
 Government regulation until the 1990’s which forbade foreign firms to enter Japan.
 Large scale retail store law that was repealed in 1994.
 Resistance to acquisition
 Cultural differences; different consumer expectations.
 Fear of restructuring the economy and system by foreign owners as they viewed
foreign involvement in the economy as threat
 Slow economy growth, less consumer spending, aging populations.

2. What are the potential benefits to the Japan been so low?

• Greater foreign direct investment (FDI) in Japan can bring benefits such as increased
competition, which leads to improved productivity, innovative management practices,
technology transfer, and ultimately economic growth.

3) How might the entry of Walmart into the Japanese retail sector benefit that sector?
Who could lose as a result of Walmart entry?
• The entry of Walmart into the Japanese retail sector could benefit consumers by
offering lower prices, improved product variety, and better services due to increased
 competition. However, local retailers and suppliers may lose out due to pressure to
match Walmart's pricing and practices, potentially leading to consolidation or
closures.

4.) Why has it been so hard for Walmart to make a profit in japan? What might the
company have done differently in it's early years in japan?
• Walmart faced challenges in Japan due to cultural differences, resistance to American
management practices, and initial missteps like stocking low-quality Chinese goods.
To improve profitability, Walmart could have adapted quicker to Japanese
preferences, avoided abrupt layoffs, and focused more on offering high-value items
tailored to the local market, rather than solely relying on discounting strategies.

5.) Why did Walmart announce in late 2012 that it would expand its operation in
Japan after opening no new stores in four years?
• Walmart announced its expansion in Japan in late 2012 because it observed
opportunities to adjust its strategies and cater better to the Japanese market, such as
offering products tailored to the aging population and leveraging its global supply
chain to introduce popular items. Despite initial setbacks, Walmart saw potential for
profitability by adapting to local preferences and streamlining its operations.

POINT OF VIEW

Walmart's venture into the Japanese retail market was met with challenges and
ultimately led to its decision to exit the market. Walmart's entry into Japan began in
2002 when it acquired a minority stake in the supermarket chain Seiyu. Despite its
global success, Walmart struggled to adapt its business model to the unique
preferences and expectations of Japanese consumers. One of the key factors that
contributed to Walmart's difficulties in Japan was the cultural differences between the
American retail giant and the Japanese market. Japanese consumers have distinct
shopping habits and preferences, which Walmart found challenging to align with its
standard practices.
Walmart’s goal was to transfer best practices from its U.S stores and use them to
improve the performance of Seiyu. This meant implementing Walmart’s cutting-edge
 information systems, adopting tight inventory control, leveraging its global supply
chain to bring low cost goods into Japan. Introducing everyday low prices, retraining
employees to improve customer service extending opening hours renovating stores,
and investing in new ones.

STATEMENT OF THE PROBLEM

OBJECTIVES:

• To states that Walmart wants to use best practices from its U.S. stores to help its
Japanese affiliate, Seiyu, function better.
• To entails putting in place cutting-edge information systems, maintaining strict
inventory management, utilizing international supply chains to get low-cost goods,
launching everyday low prices, enhancing customer service through staff
development, expanding store hours, remodeling current locations, and opening new
ones.
• To improve the performance of its Japanese subsidiary, Seiyu, by transferring best
practices from its U.S. stores.
• To implement advanced information systems, tight inventory control, leveraging
global supply chains for low-cost goods, introducing everyday low prices, improving
customer service through employee training, extending store hours, renovating
existing stores, and investing in new ones.
• To boost productivity, gain market share, and achieve profitability in the Japanese
retail sector.

SWOT ANALYSIS :
ALTERNATIVE COURSE OF ACTION
ADVANTAGES

1. Efficient Supply Chain: Walmart is known for its efficient supply chain
management, which can provide a competitive advantage. It is one of the first retailers
to heavily invest in supply chain technology.
 2 . Introducing everyday low, prices, retraining employees to improve customer
services, extending by opening hour, renovating stores, and investing in new ones
3. Walmart's advance inventory management systems and aggressive pricing policies
can be beneficial in a market like Japan, where efficiency and cost-effectiveness are
highly valued.

Disadvantages:
• 1. Different Consumer Preferences: Japanese consumers have different shopping
behaviors compared to American consumers. They prefer hunting for good deals at
multiple stores rather than buying everything in one place.
• 2. Market Saturation: The Japanese market was already congested with many
supermarkets and local stores, making it difficult for Walmart to gain a significant
market share.
• 3. Lack of Adaptation: Walmart was unable to adapt to local business customs,
dietary habits, and labor relations.

CONCLUSION

In conclusion, Walmart had issues entering the Japanese market because to cultural
differences, employee resistance, and difficulties adopting its business strategy.
However, by modifying its methods, offering specialized items, and utilizing its
worldwide supply chain, Walmart is gradually making strides toward profitability in
Japan.

RECOMMENDATION

Walmart should keep adjusting to the local market by providing products that are
catered to Japanese tastes, strengthening its bonds with suppliers, and investing in
cutting-edge tactics like eschewing conventional distribution routes in order to
overcome its challenges in the Japanese market. Additionally, Walmart may increase
its popularity and profitability in Japan by emphasizing customer service and taking
cultural nuances into account.