For example, Japan has a very expensive distribution system, with distributors only wanted to sell to certain wholesalers, creating the need for one or more “middlemen” in the distribution process. Competition within Japan is also fierce. Many larger retailers have begun studying Walter’s efficiency objectives and readily implemented and incorporated new policies and procedures within their own stores to gain a competitive edge against the U. S. Based retailer. Neon sent 368 employees into Japanese Walter’s for the purpose of research attempts to compete.
Walter is facing a weakened economy, which at the moment is a problem, however it could have future benefits with suppliers. Due to the weak economy, suppliers are in desperate need of more sales, and therefore are starting to “break rank” and sell to retailers that they don’t normally have ties to. Japanese customers are also notoriously “finicky” shoppers which poses another force, however shoppers have noted that prices are lower in Walter than their usually shopping retailers, despite local retailer’s efforts to price comparatively to Walter.Customers also pay attention to where their products are made in an effort to strengthen the economy. Walter has had to advertise “Made in Japan” products in an effort to increase customer traffic and sales. There are a wide range of forces that effect the general environment as well.
Mangers are fighting a continuing battle because forces that effect the general environment effect ongoing decision making and planning. These forces include: economic forces, technological forces, calculators forces, and demographic forces, as well as, political and legal forces.The article noted that mom and pop stores make up 58% of the market. This is an example of calculators forces that are impacting Walter. The Japanese tend to favor local stores rather than national to do their shopping and spend their money. Customers have also come to rely on the sales flyers that are sent out weekly from retailers in order to determine where and when to shop, thus making it difficult for Walter’s “already low prices” or “lowest price guarantee” to be understood in Japan.A new computer system that will help track products sales by the hour, item and profit margin will aid in overcoming technological forces. This will allow a more “real time” view of profits as well as peak shopping times, and what products customers tend to buy more regularly.
Economic forces facing Walter include a “sluggish economy” and generally gig real estate prices for urban areas single story structures are examples of economic forces that are working against the retail giant.Urban areas within Japan are often over crowed forcing stores to build mufti-level buildings, therefore, customers are finding single level stores “cavernous”. Up until recently Japan had laws that restricted store size and hours of operation that had been set in an effort to protect smaller less efficient local retailers.
Some of these laws have been changed or lifted giving Walter some ease for with legal forces. In short, there are a variety of forces that are weighing against Walter’s emergence into the Japanese market, there are a few forces that have been found beneficial.Walter is aware of the challenges that it faces emerging into such closed market. Mangers are taking great steps in making sure to be aware of the global environment, task environment and general environment around this new Venture. If Walter’s manager continue to be pressingly aware of all the forces and how they can affect day-to-day business, as well as take the time to research the various factors influencing these forces, success could be a long term outcome of the new business venture.