Toys “R” Us Japan

Case Solution

Debora L. Spar
Harvard Business School ()

Documents the entry of the US retailer into the Japanese toy market. Discusses the history of Toys “R” Us in the United States, as well as the history of the Japanese toy market, distribution systems, wholesalers, and retailers. Eager to enter the world’s second-largest toy market, Toys “R” Us executives began formulating strategies to open large discount toy stores in Japan in the late 1980s. The American company is threatened by a series of setbacks due to Japanese regulation of warehouse size, the application process and a multi-layered distribution system that has been in place for many years. Continued efforts and buy-in from a Japanese partner enable the company to prepare to open a Toys “R” Us store in 1991. With the lack of direct sales contracts and the high costs of land and labor, executives at Toys “R” Us Japan are concerned about the eventual success of their new venture.

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