Wal-Mart entered the Japanese retail market by buying a stake in Seiyu

Wal-Mart in Japan

Wal-Mart entered the Japanese retail market by buying a stake in Seiyu

 The caselet primarily focuses on the US retail giant Wal-Mart’s unsuccessful venture in Japan. It discusses the different strategies that the company adopted in Japan and their impact on its business. The caselet gives an overview of the Japanese retail market and the closely-knit network of suppliers and retailers which made life difficult for Wal-Mart. It also compares the relevance of Wal-Mart’s everyday low pricing (EDLP) strategy in Japan and the US.

Issues:

» Importance of market research in global retailing

» Need for channel relations in a foreign country

» Aligning strategies with diverse cultures in retailing 

Introduction

Retailing in the United States got a major thrust in the early 1960s when three major players — Target, Kmart and Wal-Mart – opened their retail stores in Michigan, Minneapolis, and in rural Rogers, Arkansas, respectively. Wal-Mart, founded by Sam Walton, went on to become the world’s largest retailer… 

Questions for Discussion:

  1. Wal-Mart entered the Japanese retail market by buying a stake in Seiyu. However, it reported heavy losses consecutively for two years. Discuss the reasons why Wal-Mart could not succeed in Japan. 

  2. Do you think Wal-Mart should continue in Japan even after suffering huge financial losses during its first two years? Give reasons in support of your answer. What are the steps that Wal-Mart can take to improve its operations? 

  3. Domestic competition is one of the prime factors that affected Wal-Mart’s business in Japan. Mention the steps taken by the competitors to counter Wal-Mart’s efforts in Japan.

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