The story of Toys “R” Us, one of the largest toys company in the world, began over 50 years ago. Its founder Charles Lazarus came back from the army and began to sell bicycles in the shop of his father. At that time, the US had a baby boom, and customers were always asking whether it is possible to purchase a bicycle with a toy. Lazarus quickly realized the situation. After a couple of years, he has opened an office in Washington, and in another ten years, the number of stores has exceeded one hundred. An important strategic decision was the refusal of the substantial profits in favor of the market share. Lazarus thought about and developed the number of stores in the country rather than about earnings. This was the reason for global expansion.
The Toys “R” Us, Inc. was founded in Japan in 1989 with headquarters in Kanagawa. Since that time, the company developed promptly, resulting in 100 stores by the end of 2000 (Aggarwal 267). Adopting the model accepted in the US and Canada, the company established the first Side-by-Side store joining Toys “R” Us with Babies “R” Us.
In the beginning, the Japanese market has an extremely different strategy that the US one since the Large-Scale Retail Store Law of Japan protected smaller businesses. For example, political issue stated that “for any store larger than 5,382 square feet owners had to obtain government approval to construct the building” (Dlabay and Scott 457). Besides, the fact that Japanese trade representatives were accustomed to co-operating only with retailers and wholesalers complicated the situation, particularly the “challenge against Akachan Honpo, an Osaka baby products wholesaler” (Melville 138).
The differences also exist in selling toys: “if toys connected with a child’s TV program, its life cycle usually three months” (Kaynak, Lee, and Dawson 38). According to Aggarwal, “competitive weapons such as door-to-door sales and boutique presences are much more prevalent in Japan” (272). The company had to overcome these barriers.
However, the Toys “R” Us could not perform their business the same way as the US as the Japanese market differs from the US one. In terms of a cultural and economic environment that is different in every country, it was not easy to satisfy the Japanese customer demand. It goes without saying that the entry of Toys “R” Us into the Japanese market has certain difficulties, but its benefits met expectations resulting in the 2nd biggest toy market worldwide. Toys “R” Us handle these differences proceeding to open new store formats. For instance, seasonal Toys “R” Us Express locations were popular among customers in Japan.
Moreover, the company integrated its local toys such as Bandai, Aprica, Combi, and Tomy with those of globally known, including Fisher-Price, Graco, and LEGO. Besides, in 2012, the company introduced a new online store where everyone can purchase no matter where or when he or she decides to shop. Toys “R” Us Japan used several marketing strategies to gain its aim of expansion, particularly the use of research data of its customers and play with the prices to continue to bring considerable results. Overall, it was the initiative Lazarus’ business model of a rapid expansion of the trading network offering a huge range of products with minimal wrapping that made Toys “R” Us stores dominant on the toy market in Japan. Losses of the expansion stage quickly became multi-billion dollar profits after the conquest of the many millions of loyal regular customers.
The Toys “R” Us has earned a Japanese reputation for the quality and safety of products. All their products meet international quality standards and have a perfectly balanced relation of price, features, and quality. While parents are busy buying toys, the children can play in peculiar places. For this purpose, there is a special playground, almost in every store. For customers’ convenience, stores classified toys by brand and by the age of children. Stores please customers with surprisingly original toys: a plush octopus, a rocket on wheels, a bicycle with a roof from rain, and plenty of other creative ideas.
One more peculiarity of Toys “R” Us appealing to the Japanese customer is that it supports the national manufacturer offering products that are common only in Japan, among which Agatsuma or PeopleandPilot Inc. The assortment of toys is diverse and continuously updates according to the latest requirements of life, including movies, cartoons, and events. “The Toys “R” Us Japan has gone from strength to strength with stores trading profitably around the archipelago expanding to 250 stores by 2010″ (Gilson et al. 125). Nowadays, there are “167 stores in Japan – 94 Toys “R” Us, 19 Babies “R” Us, 57 side-by-side stores, and approximately 7,000 employees all over the country working for Toys “R” Us” (Betros par.2).
In conclusion, it should be stressed that the Toys “R” Us company is an example of the success of a foreign retailer in a host country. It was not an easy process, but the management of the company did its best in order to handle challenges and to satisfy the customer applying several marketing strategies in Japan.
Works Cited
Aggarwal, Raj. Restructuring Japanese Business for Growth: Strategy, Finance, Management, and Marketing Perspective, New York: Springer-Science, 2012. Print.
Betros, Chris. “Toys“R”Us Japan.” Japan Today. 2011. Print.
Dlabay, Les R., and James Scott. International Business. 4th ed. Mason, Oh.: Cengage Learning, 2011. Print.
Gilson, Julie, Glenn D. Hook, Hugo Dobson, and Christopher W. Hugho. Japan’s International Relations: Politics, Economics and Security. 2nd ed. New York: Routledge, 2013. Print.
Kaynak, Erdener, Jung-Hee Lee, and John Dawson. International Retailing Plans and Strategies in Asia, New York: Routledge, 2012. Print.
Melville, Ian. Marketing in Japan, Oxford, England: Butterworth-Heinemann, 2012. Print.