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1.

According to Rugman and Collinson (2009), they define firm specific advantages (FSAs) as strengths
or benefits specific to a firm and a result of contributions that can be made by its personnel,
technology, and or equipment. Toys R Us offers a wide variety of products to its customers in a
“supermarket” style shopping experience using a self service model. Within the stores customers
are able to purchase additional children related items, beyond the scope of what customers would
expect to find in a toy store (items such as diapers and baby food). By having this style of retail it
allows the store to reduce the amount of sales support staff needed, which enables the store to
further discount their products. Furthermore, the company maintains a strong-consumer
orientated marketing focus that is nationally responsive to these specific customer needs.
Correct answer: The Firm-specific advantages (FSAs) of Toys “Я” Us include their business model,
which is to purchase toys and other merchandize at low prices from producers, and then sell them
at low prices to consumers. In Japan, this formula gave the company a competitive advantage
against local rivals whose products went through a number of intermediaries before it reached its
shelves. Another part of this business model were the large stores which allowed for a large
inventory, a lot of choice, and a parking lot. More specifically, the people that Toys “Я” Us hired to
get the job done are an FSA.

2. One of the greatest cultural barriers that Toys R Us experiences, is that many countries which they
try and establish stores within are not used to large scale retail toy stores. Many foreign countries
retail toy stores are smaller in scale and are typically located within the downtown areas. However,
these types of locations are not necessarily suitable for Toys R Us, as they need areas on the
outskirts of town that provide large sprawling areas to build large stores with comparable parking
areas. When Toys R Us attempted to attain a building permit for a new store on the outskirts of the
German town of Cologne, the company was met by much political resistance through the local
chamber of commerce and the retailers association, both which strongly felt that toy stores should
be located within the inner parts of the city. Furthermore, the German Toy Manufacturers
Association also provided great resistance questioning why a toy store would be selling non toy
items. Through this resistance, the company realized that these types of legal and political
resistance could effectively be used by a country to block foreign competition. When attempting to
move into the Japanese markets, Toys R Us business model greatly clashed with traditional
Japanese business models which focus on personal attention, rather than the self serve format
which exists in the Toys R Us model. By deciding to move forward with their entry into the Japanese
markets, if the cultural barriers within Japan could not be overcome, then Toys R Us risked having
the Japanese culture not accepting their stores, ultimately resulting in the company pulling out from
these markets.
Correct answer: Toys “Я” Us was American, which alone signified a political problem because of
fears of imperialism and of Americanization of lifestyles in other countries. In Germany, the
company was greeted by a partial boycott and a public relations blitz that condemned the concept
of a self-serve toy supermarket as being alien and wrong. The fact that the retailer wanted a large-
area space for its store also displeased locals. In Japan, commercial and other political restrictions
prevented the company from implementing a business model similar to that in the United States.
3. It appears that Toys R Us proved to be much more successful in the Japanese markets for the fact
that they enlisted the help of a local partner, Den Fujita. Fujita had great experience as he had
experience with running McDonalds Japan. Fujita was an expert on the cultural and political aspects
of Japan, and knew how to guide Toys R Us through these barriers. Within Germany, it does not
appear that they used this approach. In Germany, the company sold the Toys R Us experience by
continually selling their store concepts through German trade shows. Through this approach, the
company eventually wore down the political and cultural resistance they were experiencing in the
country. If the company had enlisted the help of someone with the experience of Fujita in the
German market entry, the process would have most likely been engaged more readily by the
country.
Correct answer: The success of Toys “Я” Us in Japan can be attributed to the help of a very
influential local partner who helped open doors for the company. However, the size of the market
and the level of competition were also important. Note that German competitors adopted many of
the strategies of Toys “Я” Us, which might have created a more competitive environment in which
to operate.

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