– Toys R Us’ retailing format has been successful in the U.S, is there any reason why this selling format wouldn’t work as well in Japan as it does in the U.S?

Toys R Us has gained its success in the United States by selling goods at a low price. They are able to this by buying large quantities of products directly from its manufactures which allows them to sell their merchandise at 10-20% cheaper than small retail stores. Toys R Us also does year round campaigning to encourage people to buy toys all year, instead of just for Christmas. This strategy would not work as well in Japan. Japan has a very different culture than the United States. Japan is known for their many “mom and pop” shops which employee only one to two people. In the 1980’s these small retail stores accounted for 75% of retail spending. These small shops have very close relationships with their manufactures, and they help each other stay in business. The small stores of Japan are a reflection of the Japanese way of life. The homes there are small and the Japanese would rather buy in small quantities more often rather than buy in bulk less frequently. They appreciate the personal customer service from the small shops and do not mind paying extra for their items. Toys R Us would have a very hard time becoming successful in Japan. Japan is a small country and there is not a lot of room to build huge Toys R Us stores. They would have a hard time buying products from manufactures as the manufactures have loyalty towards the small retail stores. They may have to pay higher prices to the manufactures to get the manufactures on board with their huge toy store, which would defeat the strategy of “low prices.” Also, the people of Japan may resent Toys R Us for pushing all their “mom and pop” shops out of business and refuse to shop at their