After 8 years of trying to enter the Japanese retail market, Tesco has admitted defeat and will sell off it's 129 small stores.
Tesco's CEO Philip Clarke has stated that there is a scalability issue. Tesco first moved into the Japanese market with the acquisition of C2 in 2003 where they purchased 78 stores.
It seems that Tesco has misunderstood the cultural problems associated with a country like Japan. Other European companies have failed in Japan too, French Supermarket Carrefour and UK chain Boots to name a couple.
Wednesday, 31 August 2011
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There are huge cultural differences between east and west, products, packaging, service levels, types of service, transactional service. It also shows how branding can work against you as the retails shops in japan have captured the hearts and minds of their customers, do we all embrace foreign businesses so easily?
ReplyDeleteHi Liam
ReplyDeleteYou're right, it took McDonald's 10 years to get into Russia. Culturally the East operate differently from the West (bribes / payments are part of business practice for instance) however if a company manages to penetrate the Eastern markets then the riches on offer are endless.