The competitive advantage of the Toy R Us is that it was self service, supermarket-style format. The self service style gave the customers the chance to view different toys and pick between a different range of products, this is because they had a bigger and better selection than any single toy store. Viewing of the range of the products, gave Toy R Us a competitive advantage over the other retail shops selling toys. This will help Japan because for them, a typical toy store was small and did not sell a wide range of products and their display areas were customarily cramped. They also had a central control feature that ensured automatic replacement of every toy sold once the inventories dropped below the pre-determined levels.
The Toys R Us company used the low cost leader strategy in the market as compared to other toy retailing companies. This was an advantage Japan had since that it offered lower prices to the customers which led to more purchases and more discounts. This made the Toys R Us company sell more hence making more profits. The Toy R Us used their competitive advantage to expand their chains to other parts of the world and produced products that would be well accepted globally hence produced global products that are accepted globally and there was a huge cost to change their products since they were global.
Has Toys R Us selected the best entry strategy and the bes partner for Japan?
The other entry strategy that the Toys R Us used was 1st mover advantages as seen in the case study. The company saw a great potential in the Japanese market whereby though the children had little time to play they still had enough to play with the toys. Thus making parents spend more on the toys and this led to the Toys R Us Company flourishing. The birthrate in Japan also allowed the parents to spend more on the children hence they bought more toys.
The late mover advantages for Toys R Us in Japan were that, it has captured the market since people like new things. They also learnt how the Japanese market is and so they chose something different from the other toy sellers. This was that they introduced the supermarket style where the other toy sellers used the retailers style. Japan’s competitive advantage was that the birth rate of Japan was controlled hence there were few children hence parents had enough to spend on toys. Parents had fewer children and most of the money they spend on the toys for their children.
The Toy R Us got a partner Den Fujita who had a better grasp of U.S. retailing practices as he had helped McDonalds in introducing the U.S.-style fast food to Japan. Fujita had argued to the public that McDonalds-style food would be good for Japan, as he later explained that the Japanese are hard working, but very weak, very small hence had to strengthen them. It did not select a good strategy as the toy market was different from the fast food. Though both were foreign businesses the strategy that worked for McDonald did not work well for the Toy R Us. Thats why it delayed the opening of other stores until 1991. Toys R Us was a global market and this led them to penetrate easily in the market. People had the mentality that if the company is global then it is good. This therefore led to better markets wherever they went. The more the demand the more the sales hence bettering the economy of the Japanese toy market.
