Japanese and the U.S. Corporate Management, Case Study Example

1. Identify the issues or problems within the case

The issue in this case is that Toys “R” Us had attempted on a number of decades to penetrate the lucrative but restricted Japanese market. At each level, the U.S. firm had encountered hardship and opposition. The Japanese retailers had attempted to ban the chain’s entrance, the way small shopkeepers within the Nigata region, site of the initial Toys “R” Us warehouse. The Japanese media had strongly condemned Toys “R” Us terming it a “black ship of Kawasaki,” and a horde of Japanese toy producers, comprising Nintendo, who declined to address straightly with US retailer. Furthermore, the layout of Japan’s multilayered supply structure also appeared to collude over Toys “R” Us, frustrating the organization’s plans and propagating Japan’s disgracefully increase client prices (Hills, 1999).

2. Identify and draw on particular theories to support your analysis

For several decades, Japan had been pertinently illustrated as a country of small shopkeepers. Although the citizens of the four islands were nearly half that of US, the size of retail branches in Japan were the nation’s common “mom and pop” warehouses. Throughout early 1980s, those small stores made up to about 75% of retail costs. Almost half of those branches dealt with food, in relation to 20% in the US. The disintegration of retailers was corresponding to the disintegration of the wholesalers who provide for them. Whereas Western viewers inclined to mock the Japanese trading structures too tedious and outdated, a number of Japanese clients trustworthy appeared to enjoy and applaud its gains. Further to their commercial operations, small store trading, therefore, provided valuable social reason (Hills, 1999). Illustrated straightly by some as a “social service,” then vendor sector was “complete with under-employed job seekers who in given communities can also be unemployed. Advocates of Japanese unit moreover claimed that small vendors were a common reflection of the Japanese approach. Japanese clients liked to shop each day for small amounts of fresh products. Tiny homes and kitchens gave no extra space for storing additional foods. On the other hand, those against it claimed that tiny stores persisted to live only because they were defended from extra successful competitors through laws limiting the development of extended stores and implicit non-competition plans. Japanese clients would consent less service in return of reduced prices (Mason, 1992).

For most of the US, the inequality in investment sizes was clear that the Japanese market stayed deceitfully closed to US traders. Subsequently, by 1989, US bargainers initiated a number of debates with their Japanese colleagues to mark and resolve structural issues in each state. This stands as an obstruction to trade and equality of payment modifications, with a target of adding to the decline. The basis of the discussion, nonetheless, has been based on perennial issue of expected trade obstacles to US imports and Japan’s investment. The US group as well proposed that Japan client prices were greater in relation to what it should be. They also stated that it was related to prices from other markets, where a Japan’s supply system persisted to be a key obstacle to US export sales. In addition, just as all foreign investors expecting to invest in Japan, Toys “R” Us continues to experience significant challenges in getting appropriate real estate (Mason, 1992).

3. Recommendations to the problems

For the two countries to co-exist and do business on equal terms, there is a need for initiation of laws and regulations to govern the supply and distribution sector. This is because it causes several challenges and consumers will prefer the one offering their products and services at lower prices. With proper policies, both investors will be protected and clients will have no option other than purchase from both investors. On the other hand, the initiative of firms seeking alliances with large local partners is highly recommended, as all the players will have equal shares within the market. Moreover, the well-established firms may support the weak companies. Discussion is also proposed in order for the sector players to agree on terms of operations and meet clients’ needs on an equal basis. This way every sector will be upgraded the weak or smaller ones will be forced to keep track of the present market situations. This initiative also is recommended because other investors to the sector will always be required to meet given conditions before setting up their operations (Hills, 1999).

References

Hill, C. (1999). Toys “R” US Japan. Harvard business school.

Mason, M. (1992). “United States Direct Investment in Japan: Trends and Prospects,” California Management Review, Fall 1992.