Enviroment

International Business and Environment
Case 1: Toys “R” Us in Europe and Japan
1. - What are the firms specific advantages of Toys “R” Us?
Toys "R" Us has captured almost 25% of the US toy market to easily rank first in sales in its industry in 2006 (graph 1). To what is it been necessary to that the company is the leader in the sector? To understand it, we will try to explain the specificadvantages that it has with regard to other competitors of the sector:
* Brand Image: It is very easy to think about the category killer when one speaks about its sector. This is due to the fact that the image of the company is very well placed as quality toy store.
* Price: The company uses its retail chains to buy directly from the manufacturer, essentially eliminating any need for awholesaler or “middleman.” By cutting out the middleman Toys “R” Us can acquire products at a much lower price compared to purchasing from the wholesaler.
* World expansion: The Company wants to come to more peoples in more places; we can think that it has approximately 875 shops in The United States, and more than 600 international shops.
* Use of them new technologies of the information:the shop online is of most visited of its sector (table 1)
* Standardization: Every store is similar in shape, design, size and layout. Customers can expect certain qualities or features to be present at every store. Advertisements and presentation including uniform colors are used at all stores
Graph 1

Table 1

2. - What specific cultural and political barriers to entry does it face?The globalization tends to homogenize to all the countries. It is tended to forget the differential elements. This one was Toys "R" Us 's major problem. The American company forgot that every market has its differential elements. It is necessary to bear these elements in mind if one wants to triumph. One of the factors that allow the expansion of the American giants, is the power of acquisition.This in Germany is not possible, due to the legal restrictions. For example, the dumping is prohibited; dumping is the long-term offer of goods below its level of purchase. The low prices, they were not also an important factor, since Germany is a country where the discount shops represent almost 50 % of the market. In addition, the German mentality could not conceive a shop of toys in which manyproducts were sold to part of toys. The German consumer gives many attentions to the quality of the employees. A company like Toys "R" Us, was giving more priority to the product that to the quality of the service. This I hit again with the mentality of the consumers Germans. With regard to Japan, the major obstacles that the company were, on the one hand the Japanese culture and on the otherhand, the market in Japan. The Japanese culture characterized for avoiding long-term uncertainty and a employment culture. The loyalty to the existing shops is an important point. With regard to the market in Japan we can stand out, the preference of the Japanese to local shops and an ideal exigency of the quality of the products.
3. - Why was Toys “R” Us more successful in Japan that in German?
Thegreat resistance that supposed the market of Germany for Toys "R" Us, served to the company to focus of different form its expansion for Japan. Japan is a market much more conservative than Germany. The most determinant factor that facilitated the entry of the company in Japan was the contracting of Den Fujita. The great knowledge of the gentleman Fujita on the Japanese market made possible amajor success in Japan than in Germany. He introduced large-scale discounting to people who supposedly wanted only cozy but high-priced neighborhood shops. Mr. Fujita was catapulted into prominence once again when he agreed to have McDonald's Japan take a 20 percent interest in Toys "R" Us's new Japanese operations. With very restrictive laws on the size of retail outlets in Japan, this alliance...