Illusion of First Mover Advantage and Dilemma of Adjustment Strategy:
A Case Study on Carrefour's Withdrawal from Japan
Sang Chul CHOI
Professor of Marketing and Distribution System
Faculty of Commerce, University of Marketing & Distribution Sciences
Introduction
Carrefour announced the withdrawal from the Japanese market and Carrefour Japan's purchase by the Aeon, the biggest retail company in Japan, on March 10, 2005. Even though Carrefour asserted the withdrawal as a strategic partnership with Aeon, the public opinion in Japan expressed generally the view that Carrefour's boasted hypermarket format failed unavoidably to the adaptation to business practice and the consumers of Japan .
When Carrefour opened its 1st store in Makuhari city in December, 2000, the sensational mass media clamored exaggeratedly that it was the re-invasion of a black ship(KUROBUNE in Japanese). However, the current opinion was relieved to confirm that the black ship was crushed down, before even 5 year had passed.
In this paper, the main concern is focused to the aspect called "the failure of the adaptation" which results in the business retreat of Carrefour Japan. Certainly it is the undeniable fact that the business retreat is equal to the failure of local adaptation by the foreign enterprise as the result. However, when we look back to the past years, it is clear that Carrefour Japan had tackled with local adaptation enthusiastically, even though it had repeated various trial and error in Japanese market, and that it had obtained a fair evaluation regarding the business performance in the troublesome Japanese market.
Though Carrefour has been said to be the best at local adaptation among the global retailers of the world and it approached to the Japanese market prudently because it does not intend to repeat the failure in America and so on, it is important to identify why it did not advance the adaptation strategy smoothly in Japanese market, and why it did not fit the consumer needs and business practices of Japan in the process of adaptation.
In this paper, first of all, we review the history briefly since the entrance into Japanese market by Carrefour. Secondly we analyze the stereotype that the retreat of Carrefour Japan is considered as the failure of the adaptation strategy generally. Japanese market is evaluated as the easiest market to fail in the world, when the global retailers make business.Certainly it is understandable that the reason of the retreat of Carrefour Japan is explained that it was overconfident of the hypermarket format, or it couldn't adjust to the difficult Japanese market where the manufacturers and wholesalers have channel power abnormally. Nevertheless we point out that such general explanation is one-sided in this paper.
And then we want to argue the over-adaptation hypothesis of Carrefour in Japanese market, in other words, the dilemma of the adaptation. Finally we propose some challenging research issues from Carrefour's retreat from Japan.
