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Restructuring / Turnaround Strategies Case Study
Case Title:
Wal-Mart in Japan: Survival and Future of its Japanese Business
Publication Year : 2007
Authors: Anita.M, Doris John
Industry: Retailing
Region: Japan
Case Code: RTS0165C
Teaching Note: Available
Structured Assignment: Available
Abstract:
Localisation is the buzz word for a successful global business. Japan’s retail market, the second largest in the world, accounts for ¥130 trillion. It is characterised by a unique consumer behaviour, distribution system and increased retailer density. These challenges hamper the success of global retailers who tried to transplant the business model from their parent country into the Japanese market. Analysts attribute that lack of localisation and adoption of the ‘cookie-cutter’ approach in foreign markets as the main reason for their failure. Wal-Mart, the world’s largest retailer has been daunted by the five consecutive years of losses since its entry into Japan in 2002.It entered Japan by acquiring Seiyu, a struggling Japanese retail chain. Despite implementing many strategies, Wal-Mart was not able to successfully execute its US model in Japan. By mid-2007, Wal-Mart had invested $1 billion in Japan and had made Seiyu its wholly owned subsidiary, by acquiring a 53% stake. The year 2007 was relatively better. The net loss for the first quarter of 2007 had declined to ¥4.4 billion compared to the net loss of ¥52.8 billion in the first quarter of the previous year. In spite of this positive trend, analysts suggest that Wal-Mart should sell Seiyu and give up its Japanese operations. Wal-Mart however is committed to Japan.
Pedagogical Objectives:
- To analyse the retail industry scenario in Japan
- To analyse Wal-Mart’s successful US retail model
- To compare and contrast the retail market characteristics in developed economies, viz. Japan and the US
- To analyse the strategies to be adopted by Wal-Mart for survival and growth in Japan.
Keywords : Wal-Mart; Japan; Retail; Retail Market Scenario in Japan; Keiretsu; Seiyu; Consumer Behaviour; Restructuring / Turnaround Strategies Case Study; Japanese Distribution System; Developed Economy; Business Environment; Survival Strategies; Localisation Strategies; Revenue Models; Strategy; Economics
