Global Retail and the Transfer of Management Knowledge Case Study

Global Retail and the Transfer of Management Knowledge - Case Study Example There was much friction to be overcome if convenience stores were to be successful in Japan. This was mainly because of the overwhelming presence of small shops in the area. A lot of laws and regulations were put into place to try to protect these small shop owners, such as laws restricting large retailers-such as department stores-from certain activities (Bernstein, 2008). The company was brought to Japan mainly because of Toshifumi Suzuki. The company which he represented, Ito-Yokado, did not support the idea of bringing the convenience store to Japan as a franchise. However, Suzuki did support the idea and claimed that not only could profits be generated by convenience stores, but that the concept could also result in lessened friction between stores of different sizes. The number of small stores in the country was seen to Suzuki as an opportunity rather than a challenge. His idea was to build a franchise system of convenience stores and, in exchange for a cut of their profits, offer them managerial expertise and other guidance. He obtained knowledge from Southland with regards to how to operate a franchising system. Eventually, Suzuki was able to convince Masatoshi Ito to at least look into the idea (Bernstein, 2008). There were quite a few right moves by the company that led to it being such a large success in Japan. The company sent its amateurs for training in the United States. They knew to avoid price competition with supermarkets. They utilized Southland's accounting system. The setup of the store itself was perceived to the Japanese as being foreign, which had an appeal of its own. Ito-Yokado had such a great market power that Seven-Eleven Japan was able to leverage it to acquire wholesalers. The company positioned its stores in urban areas to attract individuals who only wanted a few items and were in a hurry. They carried a broad array of items for sale (Bernstein, 2008). When the model was re-exported to the United States, the Japanese had learned what mistakes to avoid by observing Southland's slow demise. They used some of the techniques that they utilized in their own country in order to make the convenience store change successful in the United States. One of the biggest keys to doing this was through adapting the latest in information technology. Since that concept had been so successful in Japan, the Japanese figured it could only do the same for the United States. In conclusion, this was a relatively unforeseen event-at least of its scope-in Japanese history. Japanese companies in the retailing industries were not seen worldwide as being efficient. Their distribution systems were archaic at best, and large retail giants such as Wal-Mart were few and far between. Using the skills they learned from Southland and their own parent company, Seven-Eleven Japan was very successful (Bernstein, 2008). Why did 7-Eleven thrive while Southland declined and eventually went bankrupt' Why, more in general, are there so many successful global retailers of non-US origin' 7-Eleven thrived not only because of the reasons discussed above, but also because of several other key factors. These include its franchise system and market dominance strategy, the rationalization