Localization Strategies of Japanese Food Service MNE in 8 AsianCountries and Regions: A Case study
Sairan Hayama
Shukutoku University
Keywords: localization strategies, cross-cultural management,Mos Food Services Inc.
1. Introduction
Different from 20 th century, in which Japanese MNEs established theirplants in Asia in order to get cheaper labor to produce and export theirproducts to developed countries, Japanese MNEs today regard Asian
countries and regions as emerging and expanding markets and pay m uch
attention to the local cultural factors such as languages, religions, livingstyles, social norms and values to define their local business strategies(Justyna Dabrowska, 2008). Under this condition, in order to survive andgrow in this current dynamic and competitive global business environment,
more and more Japanese food service MNEs are going out to reach for newmarkets in Asia and the business opportunities are growing due to theremarkable economic development of Asian countries and regions.
However,accompanying

withthisglobalization

expandingprocess,Japanese food service companies are also facing a lot of difficulties andchallenges at the same time and how to manage and deal with these culturaldifferences between local markets and Japan market plays a very importantrole in terms of doing business in Asia. Japanese MNEs need to analyze andadapt

tonew

markets’ culturesanddesign

appropriate

localization

strategies for the local markets.
2. Purpose of this research
In Asian markets, Japanese MNEs are facing cross-cultural difficulties.
For example, Uniquo had failed in Indonesia & Bangladeshi markets in thevery beginning when they launched casual clothing in 2013 due to the lack ofknowledge about traditional Islamic lady fashion. Ajinomoto also had
encountered cultural differences and have been researching and developing
appropriate local taste products/food in order to be accepted by the local

markets. Thus, managing cultural difference issues has become extremely
essential to Japanese MNEs’ success in Asian countries and regions.
Based upon a case study of Mos Food Services Inc., this research’s purpose
is to analyze the cultural factors which influence Japanese food service
MNE’s business strategies and explore how Japanese MNEs overcome thesecultural differences and succeed in Asian markets. A qualitative approachhas been used in this research. Data has been gathered through direct
observation and in-depth interviews (April & July,2017). To gather secondary
data, this research has used journals, books, and published articles.
3. Literature Review
The discussion on standardization versus localization has been lasted for along time. In order to reach to various global markets, MNEs take local
market’s economic, political, social and cultural factors into consideration.
Though it is well known that if a company wants to save its cost for R & D,
production and marketing, the best choice should be standardization strategy.
However, each country has its own culture, economic development st age andMNEs are expected to respond to the cross-cultural issues in each market.
Sometimes, a localization strategy, sometimes a balanced strategy should beapplied in order to win in a competitive market.
Table1: Characteristics of Standardization and Localization Strategies

Characteristics

Standardization
Strategy
Companies operate as if theworld were one great
market disregarding
superficial regional andnational boundaries.

Localization
Strategy
Based on understanding
the specific requirement
and consumer preferencesof the local consumers.

・ Well managed companies
move from customizing
products to offering
universally standardized
products. (Levitt,1983;Cavusgil,1996)
・ Standardization helps
promote corporate identity
and the development of
global brand recognition
brings distinct advantage
over competitors. (Enatsu&Kuwana, 2012; Ota, 2016)

・When a company reaches
to overseas markets, its
products and service
should respond and adapt
to the local market.
Managers from the homecountry have to learn thelocal business customs
and learn how to managecross-cultural issues.
(Adler, 1986; Ota, 2016)

As indicted in table 1, some researchers argued that companies need tolearn to operate as if the world were one great market disregarding
superficial

regionalandnationalboundaries.

Theseresearchersforstandardization proclaimed that well managed companies had to move from
customizing products to offering universally standardized products (Levitt ,1983; Cavusgil, 1996). However, on the other hand, some researchers indictthat when a company reaches to overseas markets, its products and service
should respond and adapt to the local markets. According to this localization
approach, managers from the home country should learn the host country’s
business customs, languages and learn how to manage cross-cultural issues.
(Adler, 1986; Ota, 2016)
4. Case Study Analysis: Mos Food Services Inc.
Mos Food Services Inc., established in 1972 as a Japanese food service
company,hasoperated

hamburger

franchises

andotherfoodservice

businesses in Japan and in 8 Asian countries and regions. It is a 45 year -oldcompany and has more than one thousand and three hundred employees. Mos
Burger’s first overseas store in Asian market was opened in Taipei, Taiwan
in 1991 and has developed its international business for 27 years. So far, it
has established more than three hundred stores in Asian markets.
Mos Food Services Inc. encountered cross-cultural differences and has
been researching and developing local taste products/food in order to beaccepted by the local Asian customers. Following the direct investment inTaiwan in 1991, Mos Food Services Inc. has been developing their markets in
8 Asian countries and regions including Singapore, Hong Kong, China,Thailand, Indonesia, Korea and Australia. In spite of Taiwan and Singapore
markets, the other overseas stores were opened in 21 st century. MOS
BURGER stores have been growing smoothly in Taiwan market. Singapore,Hong Kong and Korea’s markets are also expandi ng though not as speedy as
Taiwan. In terms of Thailand, Indonesia, China and Australia markets, MOS
BURGER’s business has not been going very smoothly. Compared with theother markets, MOS BURGER has been growing in Taiwan continuously andthe reason is because of its balance of standardization and localization
strategies.

Regarding the other markets, there are cross -cultural issues

needed to be solved.

5. Findings, Implementation and Limitation
Thanks to the understanding and cooperation of Mos Food Services Inc.’s
top managers, this research has got some findings. By analyzing the datacollected from interviewees and case study, the influences of cultural factors
in MOS BURGER’s development and localization strategies have been proved.
Like Mos Food Services Inc., Japanese food service MNEs are encouraged to
do their best to manage cross-cultural factors in order to be competitive andsuccessful in Asian markets.
Finally the author has to mention that this research has its limitations.
Firstly,

itdiscussed

thecross-cultural

impacts

onJapanese

MNE’slocalization strategies in Asian countries but has not analyzed detailed
differences between Japanese culture and e ach Asian countries’ cultures.
Secondly, Mos Food Service Inc. is a medium-size MNE and the analysis has
its limitation. However, its potential global development is worthy ofobserving and following.
Main References
Adler,N.J.(1986) International Dimensions of Organization Behavior, Boston: Kent
Publishing
Cavusgil TS (1996) Pricing for global markets. The Columbia Journal of World Business
31: 66-78.
Cayla J, Arnould EJ (2008) A Cultural Approach to Bra nding in the Global Marketplace,Journal of International Marketing 16: 86 -112.
Enatsu, K., Kuwana, Y. (2012) International Business , Dobunkan Publishing, pp.100-112
Ferarro, P.G.(1990) The Cultural Dimension of International Business , Prentice Hall
Haron AJ (2016) Standardized Versus Localized Strategy: The Role of Cultural Patterns
in Society on Consumption and Market Research. Volume 5, Issue 1, pp1-4
Hofstede, G. (2003) Culture’s Consequences: Comparing Values, Behaviors, Institutionsand Organizations Across Nations , 2nd., Sage Publications.
Levitt T (1983) The globalization of markets. Harvard Business Review 61: 92 -102.
Melewar TC, Saunders J (1999) International cor porate visual identity: Standardizationor localization? , Journal of International Business Studies 30:583 -598.
Ota, M.edted. (2016) Practices and Theories of Cross -Cultural Management, Dobunkan
Publishing
Takahashi, H.(2013) The Challenge for Japanese Multinationals: Strategic Issues forGlobal Management , Palgrave Macmillan