Toys “R” Us

Toys “R” Us Goes to Japan Case Discussion Questions for Tuesday, January 29 The following questions are provided to guide your thinking about the case and to help you prepare for our class discussion on this case. Please prepare some notes to each of these questions that you can refer to during the discussion. Please also prepare a one page response (and no more) to Question #5 to turn in at the beginning of class. 1. What made the Japanese market attractive to Toys-R-Us? 2. What entry barriers did Toys-R-Us face going into Japan? How did Toys-R-Us overcome these various entry barriers? 3. What problems did Toys-R-Us encounter in trying to transfer its firm specific advantages into the Japanese market?

Why did Toys-R-Us internalize (i.e., maintain majority ownership control) these firm specific advantages rather than license them to another organization in Japan? 4. What adaptations did Toys-R-Us make in entering the Japanese market? Why did it make these adaptations? How do these adaptations compare to the adaptations made by IKEA to enter the U.S. market? 5. What is your assessment of Toys-R-Us’s decision to partner with McDonald’s Japan in order to enter the Japanese market? Why did they do this? How did this help Toys-R-Us? How did this help McDonalds? 6. Was the mode of entry Toys-R-Us used to enter Japan consistent with the “optimal entry mode matrix” shown in Exhibit 6.3 (P 172) in your textbook? How does this model help us in general understand a company’s choice of entry mode?