Boots PLC: Japan Market Entry
(8 pages of text)
In 1998, Boots PLC was in the midst of planning to enter the Japanese retail drugstore market. Boots, a household name in the United Kingdom and a fixture in traditional English shopping areas known as High Street, had an impressive lineup of Boots-branded health and beauty products. Boots developed, manufactured, marketed, and sold these products through its chain of Boots The Chemists stores. Management was convinced that the markets for health and beauty products were becoming increasingly global. Although Boots made few international sales at this time, it was in the midst of expanding overseas and had identified Japan as a particularly attractive market to enter.
International retailing efforts can prove difficult, as many failed international ventures show. Japan presented a number of unique challenges and required careful planning and attention. Boots had dispatched a manager to Japan to work on market entry and had been discussing a joint venture to develop several pilot stores together with Mitsubishi Corporation, one of Japan’s large trading companies. Mitsubishi had a great deal of clout in Japan, something Boots lacked, and was interested in the retailing venture. The case centres around the question of whether Boots should go ahead with the joint venture with Mitsubishi, and also facilitates a broader consideration of the market attractiveness and market entry in general.
This case is suitable for courses in international business, international management, international strategy, and international retailing. It can be considered on several levels, including market attractiveness and fit, entry mode, and selection of a joint venture partner. The case presents an opportunity to debate what makes international market opportunities more or less attractive. For example, what factors beyond market size and growth do managers need to consider? In terms of entry mode, the case can be used to consider and compare alternatives. At the level of joint venture partner selection, the case provides an opportunity to debate how the potential joint venture opportunity fits or doesn’t fit with Boots’ situation.
To provide more detail on the retailing aspect of the case, the teaching note discusses international retailing and identifies a number of recent prominent failures in this area. Reasons for the failures are considered, and may be included in the class discussion of the case.
Japan, Large, 1998
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