Globalization of Large Japanese Retailers andStages of Their Global Development
Chiwai Cheung

SummaryThis paper s七udies the globalization of． Japa耳ese retailers in terms of setting up affiliates

or acquiring foreign firms／ou七lets in comparison with other sectors in the past七wo decades．
It goes further to analyse the global s七rategy status of fifty big re七ailers by a modified Porter's

m6del on s七丁目tegic management of multinational companies：with four c6mponents（total andfinancial， personnel， merchahdise sourcing， and marketing management） and seven stages in theprocess of global development． Results show that Yaohan Japan and ltoh‑Yokado are theforerunners（seventh stage）， and lsetan and Seiyu are at the sixth s七age， and six firms in thefifth， eight in the fourth， twelve in the third， and twenty in the beginning two stages．
Comments on the economic and cultural significance of their global strategy， and scenarios ofrecent developments， and difficulty in linking the stage framework with regional and group
revepue status are given．
Keywords ： foreign direct investment， globalization， multinational firm， retailer， strategic

management．

1

Framework of Analysis

In the 1980s the big Japanese retailers made their direct investments

rapidly into key cities in Southeast Asia． lt was reported in Nikkei
Shimbun （Nov． 19， 1992） that the total sales space of eleven biggest retail‑ers in Asia and Australia， including their existing and planned floorage

amounted to 865，000 square meters． An outstanding example was
Yaqhan， with headquarters based at Numazu， Shizuoka Prefecture， whose
overseas sales space amounted to 296，000 square meters in 1991， overtook

its domestic floorage at 196，000 square meters． Their investments
appeared in various forms ： direct investment， joint venture， listing thecompany stocks at the stock exchange of host country， merging and qcqui‑sition （M ＆ A）， or participation in a local company's capital share． The
form or style itself of investment is really the corporation's policy， stra‑tegic management， or even philosophy． On the other hand， the form thatit takes has to conform to the requirements or legal framework of the

一19一Tokuyama Univ． Ronso

No． 46， 1996

host country， and depends much on the openness and readiness in its
investment environment， and incentives and taxation policies fOr foreign
investment． And other factors such as country risk， market potential，
global or regional trends in world economy are also important．
Various studies have thrown lights into the theoretical constructs ofglobal business and management． Questions are drawn to the corporate
structure and organization （Waldman， 1978） and marketing policy andinternational distribution system （Kaynak， 1988； Dunning， 1993）．
Taking the world automobile makers as an example， Porter （1986） has
shown the importance of competition in determining a corporate's global
strategy in terms of coordination and configuration of their activities，and decentralization or centralization tendencies of the production sys‑tem． Financial management'and risk minimization in foreign exchange
are also seen to be significant factors in determining what activities
should be remained at domestic ground or transferred to foreign soils．

Others have worked through empirical studies of individual retailer
or distributor ： Laulajainen （1992） on Loius Vitton， Cheung （1992） on

Japan's Yaohan group， and etc． Edgington （1993） has studied theglobalization of Japanese manufacturing corporation and generalized
three periods of their global strategies， namely， the linear link‑up to
Japan in the 1970s， international specialization and mesh strategies in the

1980s， and tetra‑polar strategic division of the world into Europe， USA
and SOutheast Asia in the 1990s．

1．1 Purpose of Study
The purpose of this study is twofold as follows： 一（1） to ahalyse 'the operation of globalization activities of Japanese retail‑ing industry as a whole in the last decade， and compare it with otherindustries and services ：'（2） to analyse the stages of global strategic management and location
context of the major retailing corporations originated from Japan．

1．2 Methodology of Analysis
This study will include two parts． The first part looks at the globali‑

zation of the retail sector by comparing its new foreign direct investment
︐（FDI） with other economic sectors through four different periods sincepre‑1980 years． lt will alSo provide the regional distribution of these

一20一Cheung ： Globalization of Large Japanese Retailers
activities of the recent year 1993． Lastly， the employment situation， or

employment effects of Japanese FDI will be analysed． The data is
obtained from the annual・handbook of Japanese enterprises with overseas
investments （Toyokeizai Shimposha， 1993）， which is the only source thatbreaks up

commerce

into'wholesale， retailing， and restaurant categories

for further analysis．

The second part attempts to establish a framework for analysing
different phases of development in the globalization of retailing activi‑
ties． lt first modifies the framework of Porter （1986） for multinational

manufacturing corporate activities by including all the support activities（i． e． total management， personnel and labor management， research anddevelopment， and sourcing）， and the downstream part of the line activi‑
ties of sales and marketing， but excluding manufacturing （Fig． 1）．

With the new framework， the phases of development are consideredby the activities of these retailers in three different markets ： capital／
financial， merchandise supply， and sales （M． Wada， 1985）． ln the capital
market， the phases of global expansion can be seen asl in ascending order，

utilizing the loans from foreign banks in Japan， short‑term investment
into foreign capital market， getting loans or funding from foreign capital

market， and investment in foreign firms or vice versa． The merchandise﹁ωΦ哨出自ぢく廿︒＆つの﹂Total Management（lnfrastructure）
「

1

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Flow ofourchase

Manufacturingbommodity@ofbommodities
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@

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Sales

q
rerv・ce 醤@ andlarketingDownstream Activities

Upstream Activities

Figure 1 ： Porter's Analysis of Multinational Corporate Activities

一21一

ε

Tokuyama Univ． Ronso

No． 46， 1996

supply market gives the phases of merchandise sourcing through sogo
shoshas （trading houses） ， merchandise sourcing and information throughoverseas branch offices， and lastly similar process through overseas
affiliates， or the joint‑ventures with foreign suppliers． The sales market

is categorized into stages of： supplying merchandise to market throughshoshas， direct export to foreign firms， and lastly marketing through theestablishment of overseas affiliates or retail outlets． Later ltoh （1993），

expanded the number of phases to five， adding the establishment ofregional headquarters and diversification of overseas operations into
other types of retail' patterns， and into different sectors besides retailing．

Along this line of thoughts and recent developments up to 1993， theauthor attempts to develop a larger framework with seven stages of stra‑tegic global management to analyse Japanese retailers． lt includes themore advanced states of listing the stocks of local affiliate companies atoverseas stock exchange， and move of headquarters to most revenue maxi‑

mizing or cost minimizing location which may be outside Japan．
The date for classification are drawn from the annual 'reports of listedcompanies in the first section of Tokyo Stock Exchange for the fiscal yearof 1992／93． These companies in the first section are set up with over 1
billion yen in capita｝ outlay and with net assets over 1．5 billion yen， andwith regular profits for recent years before they can be listed． The num‑
ber of retail companies is found out to be forty‑eight， and that includes

almost all the big retailers． However， the shoshas are not included here
as they are wholesalers in nature．

H Globalization of the
Other Sectors

Retail・ Sector in Comparison with

What is the significance of retailing sector among others in the
globalization of corporate activities ？ Which period in the past decades
shows the greatest growth ？
Table 1 shows that 217 retailing firms of different nature， such as

depar．tment stores， general merchandise stores （GMS）， discount houses，

convenience store chains， specialty shop chains on clothings or electric
appliances， and others， invest overseas directly． lt only consists of 1．5％

一22一Cheung ： Globalization of Large Japanese Retailers
Table 1 ： Japanese Enterprises With Foreign Direct lnvestments
Pre‑1980

Construction

49
36
125

Manufacturing

1，566

Wholesaling

1，598

Fishery， Agriculture＆Forestry

Mining1986〜90

13
31

44
36
201

59

630
379

1，269

30

4，197

2，045

6，100

Securities＆Investments
Real Property

Transportation
Services

Stock Share Holding＆Others

130 0．9
121 0．8503 3．5
5，16536．3

16

2，314

35
112
137

Restaurant
Finance＆Insurance

21

109

51
176
167
51

64
36
235
43

Total ％

1991＆after

589
665
33
20
186
85

80
60
446
302
279
285
514
270

Retailing

ALL INDUSTRIES

1981〜85

36
14
82
51
36
82
155
1，659

88

3，984 28．0

217 1，5131 0．9
964 6．7
490 3．4
406 2．9
670 4．7
998 7．0459 3．2
14，23899．8

Notes：（1）Only the Japanese foreign direct inves七men七s with the equities over 10％are in‑cluded in the study；（2）The enterprises which have re七reated or are inactive now， are excluded． The
total figure is different frorn the sum of all periods as the periods of some invest‑

ments are unknown．

Source： Toyokeizai Shimposha （1993） Kaigai Shinshutsu Kigyo Soran （Handboole ofEnterprises with Overseas lnvestments） ， pp． 48 N 61．

of all the firms ihvesting overseas， with major shares at manufacturing（36．3％o） and wholesaling （28906）．

The 1980s have been characterized by two dramatic rises of yen
against the US dollar （endaka）， i． e． early and mid‑1980s． These two pe‑

riods of endaka have pushed large， medium and even small Japanese enter‑
prises in starting or deepening their roots or connections overseas． Thesefirms mainly invest overseas for low labor costs， and not only for inten‑
sive or unskilled labor， but also for skillful labor， or even research anddeveiopment brains． Comparing the share of percentages among the four
short periods of classification， the retailing sector has a moderate start inpre‑1980s with 30906 （compared with the same for all industries， also for
manufacturing， and 40906 for wholesaling in the same period） ， then 15％ in
the 1981‑85 period （149060 for all， 11SO）60 for manufacturing and 179060 for
wholesaling）， then 37910r for the 1986‑90 period of largest growth （439060 for

all， 45％ for manufacturing and 32％o for wholesaling）， and lastly， 17％
for the period of 1991‑93 （12％ for all， 12％ for manufacturing and 109060

for wholesaling）． The last figure shows the Japanese retailers are still

一23一No． 46， 1996

Tokuyama Univ． Ronsovery active in recent couple of years in starting new investments overseas，

compared to other sectors． Perhaps the reason is that the high rates of
economic growth which took place in some Asian countries， because of thesuccess in export‑oriented industries and service trades， brought up an
increasing proportion of middle‑income class in their cities， who favor
more varieties of commodities， and they readily turn into custpmers of

new GMSs or department stores， or gourmet restaurants．
Table 2 informs us the distribution pattern of Japanese retailers andtheir affiliates in different regions in the world， 1993． The greatest con‑centration of their operations， both for marketing and sourcing of mer‑chandise， are at Asia （42％o）， compared to a concentratioh of 55％ formanufacturing， 39％ for all industries， and 279060 for wholesaling． Europe
is the next region with 27％ of the overseas retailing activities originatedfrom Japan， perhaps much more with sourcing of commodities thanretailing outlets． This main sourcing relationship may be the same forNorth America which is ranked as the third region with 239（or．
Table 2 ： Distribution of these Enterprises and their AffiliatedCompanies Overseas in 1993
Asia

qetailing@ 90

̀LL INDUSTRIES

T，496

North America

Central＆South America

621

1，143

300

P，294

P，025

P96

@ 59

@ 49

@4

R，090

R，563

W58

AfricaOceania

Total

107

5，165

Q12

Notes：Only the Japanese foreign direct investmen七s with the equities over 10％are includedin the study．
Source： Jbid．

The employment of Japanese retailers in host countries for theiroperations there are 36，802 persons in 1993． Employment of these retail‑ers hold a share of 1．5％， the same as the percentage for the number of

their affiliate companies or branches． The manufacturing sector has amuch bigger share in local employment 一 709060 ， compared to the percentage

of 36906 in the number of affiliates， and the wholesale sector a limited

performance of 10％， compared to 289060 for the number of affiliates（Table 3）．

一24一

P4676

P，088

Europe3412‑142

2，845

vholesaie

2226‑80

Manufactuhng

Middle East

R，984

@ 217

P4，238

Cheung ： Globalization of Large Japanese Retailers
Table 3 ： Employment Situation of Japanese Overseas
Enterprises， 1993

Local Employees Expatriates from Japan

Manufactu血g1，684，255persons

vholesale@245，103

14，591qetailing@36，802925

̀LL INDUSTRIES

Q，415，909

47，312

18，969 persoτ1s

Source： Jbid．

The 'share of expatriates from parent company for the retailing sector
is 925 persons， 2％o among all sectors．

Another data from the 26th Survey on' approximately seventy
Japanese retailing corporations （Nikkei Ryutsu Shimbun， 1993） give thefollowing results． There are a total of 988 retail outlets （department
stores， supermarkets， specialty shops， convenience stores， and etc．） over‑seas， and 182 branch offices， employing 34，474 local employees． The total

annual turnover of all these operations amounts to 328 billion yen in thefiscal year of 1992． Besides， the value of merchandise imported in thesame period is approximately 345 billion yen．

皿Stages of Their Global Development and Strategies
A conceptual framework of classifying the globalization of Japaneseretailing corporations into seven stages are shown in Table 4． The major

activities of the corporation related to global strategic management are

seen to be total management especially finance management， personnel
and labor management， souiccing of merchandises， and sales and market‑
ing （Table 4）．

In the globalization pr6cess； total management refers to changes in
the corporate structure； like new establishment of branches， departments，or outlets， being visible from organization chart， and also finance man‑agement． ln terms of total management， it shall first be domestic start‑

ing with domestic market‑oriented strategy， then changed to both domes‑
tic and overseas market‑oriented， and lastly global market‑oriented． The
department‑in‑charge is， at the first stage， the merchandise department

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No． 46， 1996

Tokuyama Univ． Ronso

Cheung ： Globalization of Large Japanese Retailers
itself， then changed to overseas department of more integrative responsi‑
bilities handling all overseas contacts'

奄?nature． At the beginning stages，

establishment of overseas branch offices， of overseas retail outlets， andgradually move to M ＆ A of local companies， setting up regional head‑quarters in key cities overseas， establishment of affiliated finance compa‑

nies for securing funds， listing of overseas affiliated companies in local

stock exchange to increase the company capital without the need to pay
interests for loan． And lastly， total management may promote restruc‑turing into a group with holding company at the top， and the headquar‑ters may have to move to the most revenue maximizing （or to 'a lessextent cost minimizing） location when situation favors and allows．
Next， the personnel and labor management shall change itself in the

globalization process． The first few stages will be just dispatching
Japanese staff overseas， then go on to training and education local labor，

development of local middle‑rank managers and specialists， to lastly，
integration of Japanese and local staffs．

The third component 一 sourcing of merchandise， shall begin withsourcing through sogo shoshas or wholesale trading companies． Then
gradually， it is changed to establishing branch offices， later affiliate com‑panies of their own． The aim of merchandise development then shifts
from domestic market to both domestic and overseas in their own enti‑
ties， and lastly a real combination of both．

The fourth component 一 sales and marketing comprises of stages ofsale of imported goods in the beginning， more involvement in import andexport trade， establishing overseas outlet in one single retail pattern， togradually diversifying these activities． And lastly， various types ofactivities are conglomerated and adapted to attain benefits from theeconomy of scope．
Fifty listed enterprises in the retailing sector are classified according

to this four‑component and seven‑stage framework． The results' ofanalysis are limited to more advanced stages of from the seventh to thethird， and given in Table 5 with their locational context of their overseas

activities． Furthermore， the results of seven‑stage classification of the

global development are given in Table 6， divided between department
stores and GMSs／others．

一27一

RonsoTokuyama Univ

Table 5

No． 46． 1996

Selected Japanese Retailers ： Their Overseas Outlets or

Affiliated Companies as at FY 1992

1

4

f

f

f

f

S

f

1

1

1

1

Taichung

1

Beijing

1

1，f

f

1

f

1

P

．f

3

f

f

1︐f

3

f
f

1

S

f

f
1

1

2

1

1

t

f

1

f
1

3

1

1

MalaccaPenang1

KK：inabaru

1

Brunel

1

Bangkok

1

6

2

1

2

︹

1

Rangoon2

f

f

Bagdadf

Sydney1f

Melbourne

1f

2

DELAWARE

H．

Chicago1

LA．

4

Fresno

3

1，f

1︐f

New York

f

1

f
f

ManilaK．Lumpur

1

1

2

f

1

5L

Singapore

2

P

4W

Seoul

1

f

1

DalianShenzhen

1f

Tientsi轟Shanghai

1

uNY

2

IZuMI
KASuMIDAIICHITOBuSTORE
INAGEYAHEIWADO

2

g

TOKYuSTORE
HANKYuHKTN
7ELEVENJAPN
TAKAQNAGA．SAKIYA．
MEITETSuHKTN

Taipei4L

MATSuZAKAYADAIMARu
SOGO

Macau

TOKYuHK
1T
AN
BESTDENKI^StatesHong KongDAIEI
NIC且IIJuSCO
TAKASHIMAYAMITSuKOSHI
SEIYu
1f
ISETANITO耳YOKADOYAOHANINTL＊

Cities

1

f

f

f

f

f
f

f
f

f

f

f

f

28一

f

1

f

S

Cheung ： Globalization of Large Japanese Retailers

1．

Vancouver

1

1

f

1

f

Amsterdam

F

EF

1F

1

San Jose

A

6

4，f

1
F

2

F

F F

F

F
f

Brussels

L

LuxemburgfFrankfurtL

fDusseldorf

L

f

．F

f

f

L，f

1，f

London

1

f

1

f

f

1，f

Lyon

f
1︐f

f

f

1︐f

L

Paris

f

1
f

Rome

S

f

S

1

f

f

f

f

F1

58

F5f

711f

42f

93f

X2f

F︐4︐14f

A，S

A3
32f
2f

1

F︐2

F143f

F2S4fP

Abbreviations ： Numbers

F811f

2F

P6f3L

o

H︐2A︐2L

v，29，

F︐5L︐9︐3f

H，4L

F85f

Barcelonaf．

fMilanoTOTAL：i1
1

58

Honolulu
Sao PaulouNY

A

Orland1

IZuMI
KASuMIDAI亙CHI
ぞOBuSTORE
INAGEYAHEIWADOVIRGINIA

TOKYuSTORE
HANKYuHKTN
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TAKAQ

A

f

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MATSuZAKAYADAIMARu
SOGO

TEXAS

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Seattle1．TO耳．YOKADO^States1

S．Francisco

̀IEI
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TAKASHIMAYAMITSuKOSHI
SEIYu
ISETANYAO H A N I N 雪 L ＊Cities

．D

t

S

S
1
f

for existing retail outlets ； and others as
foll
OWS：一

A ： acquisition ；f ： affiliated purchase office ；F ： affiliated financial company ；M：merging；
P：planned retail outlet under construction；
S：stock share participation；

H ： headquarters or holding company ；t ：technical assistance・

L：listed at local Stock Exchange；

W：wholesale or merchandise mart．

り

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No． 46， 1996

Tokuyama Univ． Ronso

Cheung ： Globalization of Large Japanese Retailers
The most advanced stage， i． e． the seventh stage， is attained by two

corporations， namely， Yaohan lnternational （listed name '≠?YaohanJapan） and ltoh‑Yokado， both being GMSs in Japan． But for Yaohan，
its nineteen retail outlets in Asia are mostly department stores， with four
outlets in Hong Kong listed in local stock exchange （1993）， thirteen out‑lets in North and Latin America， and one in Europe． The company caught
great attention as in 1990s when it restructured its group and then moved

its newly established holding company to Hong Kong． The reasons are

many， as mentioned by Chairman Kazuo Wada himself （Wada， 1991）．
China's market potential， low corporate tax rate in Hong Kong at 169（ol，and greater cooperation with overseas Chinese connections based in HongKong． lt has also diversified into wholesaling sector by establishing theInternational Merchandise Mart （IMM） and regional headquarters in
Singapore in late 1980s， and involving in M ＆ A in Chinese restaurants，specialty shops of leather goods， cake shops， and meat processing factoryin Hong Kong especially （Cheung， 1992）．
Itoh‑Yokado is of a different story． lt has first learnt franchising

practice from the parent company of Southland with headquarters in
Texas and then began its operations of convenience store chains quite suc‑cessfully in Japan． Later， as the parent company got into financial trou‑ble， the ltoh‑Yokado Japan has bought the stocks of its parent company
and its related affiliates in USA， and set up its new group holding com‑pany in Delaware． lts stocks are also listed in the stock exchanges in

Luxemburg and Paris， besides Tokyo． lt now operates a broad range ofretailing activities， including convenience stores， supermarkets， discountstores， department stores， and others like restaurants， processing facto‑ries and real estate business．

It is interesting to note that these two corporations （GMS， conven‑ience store chain）， but not the department stores， have been so active at

the frontier in the global strategic management according to our researchfindings．

Two firms， namely lsetan Department Store and Seiyu GMS， are clas‑sified into the sixth stage of global development． lsetan has set up its

finance affiliate in Amsterdam， and listed five of its retail outlets in
Singapore in the local stock exchange． Besides， it operates nine more out一

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Tokuyama Univ． Ronso

No． 46， 1996

1ets in major cities in Asia， and thre'e more branches for sourcing of mer‑chandises．
Seiyu has set up two finance affiliates in Amsterdam， one for Seiyu‑

European region and the other for the whole Saison Group （distribution

and resort development conglomerate） 一world region． lt also operates
one retail outlet in Hong Kong， and five affiliated purchase offices in theworld． The Netherlands offers tax haven for certain enterprise activities
and also enable enterprises to obtain capital at lowest interest rates there．

Six companies are classified into the fifth stage of global strategy．

Mitsukoshi department stote operated six outlets and eleven affiliate pur‑chase offices in the world， with the latter concentrated in big cities in

Europe． Takashima （department store） operates seven outlets and four

affiliate purchase offices overseas． Jusco （GMS） operates fourteen
retail outlets． （department stores mostly） ， concentrated in the cities in．the

Newly lndustrialized Economies， and also Bangkok and Kuala Lulnpur，
and three affiliated purchase offices． Nichii （GMS） has set up its affili‑

ate finance company in Amsterdam， participated in the equities of twoother companies in Europe， and it holds four purchase offices overseas，
and a new project in Dalian， China． Daiei （GMS）， being the biggest GMS
chain in Japan， operates four outlets in Honolulu， thirteen '≠??奄撃奄≠狽?pur‑chase offices over the world， and a finance affiliate company in
Dusseldorf． Best Denki，．an electric appliances shop chain， operates afinance affiliate company in Amsterdam， and two outlets in Asia．
Eight enterprises are categorized into the fourth stage． They include

five department stores， Tokyu Hyakkaten， Sogo， Daimaru， Matsuzakaya，and Meitetsu Hyakkaten ； and three GMSs／others， Nagasakiya， Taka‑Q，
and 7‑Eleven Japan， which is an affiliate of ltoh‑Yokado but being inde‑

pendent in financial account， has acquired the stocks of fifty‑eight con‑venience stores in Honolulu． Tokyu Hyakkaten has acquired Dragon Seed
Company （a chain of two department stores and eight specialty shops） in
Hong Kong and participated in equities in Yungji （a chain of three depart‑

ment stores） in Taipei． Taka‑Q （men's wear shop） has made an acquisi‑tion in Honolulu．，

In the third stage twelve enterprises are categorized， including

Hankyu department store； and the GMS group of Tokyu Store， Uny，

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Cheung ： Globalization of Large Japanese Retailers
Heiwado， lnageya， Tobu Store， Daiichi， Kasumi， lzumi， Parco， Chujitsuya

and Joshin Denki． Among which Hankyu and Tokyu Store have set up
affiliate finance companies in Amsterdam but their strategic manage‑
ment are still mostly domestically oriented． lnageya has held equities ina firm in Taipei， and lzumi in the Yaohan's IMM in Singapore．
Lastly， in the two early stages of global development， the rest twenty

companies are included． There are three department stores and four
GMSs／others in the second stage， and then five department stores andeight GMSs／others in the first stage， which means they are domestic‑oriented in their strategic management．
It is noted that a lot of Japanese multinational retailers have concen‑

trated their activities in Hong Kong and Singapore for their market po‑
tential and indeed， some have placed the regiona｝ headquarters function of

the multinational corporate network there． Besides， some of them havealso selected Amsterdam， Dusseldorf， or Frankfurt for finance procure‑ment and other purposes． Hong Kong offers a corporate profit tax at
16％， Singapore at 25％ in general but a discounted rate of 10％ for enter‑

prises operating regional headquarters or procurement center functions．
In comparison， Japan companies have to pay a profit tax rate of 459060 inJapan．

IV Concluding Comments
The study has attempted to classify the global development or strate‑

gic management of Japanese major retailers into seven stages mainly by
their organization set‑up， financial management， procurement of mer‑chandises and marketing policies． Several comments can be drawn．
4．1 Need for Further Study
Further study to cross the global strategic framework of the retailers
with more quantitative data （e． g．， turnover of sales， number of employedpersons， area of selling spaces， and etc．） is necessary to establish sometheoretical relationships between them． Usually the turnover of retail

outlets overseas are difficult to get． Loan procurement or financial
management is seen to be an important link， the nature， amount， fre‑quency， and interest rate of loans draWn inside and outside Japan have to

一33一Tokuyama Univ． Ronso

No． 46， 1996

be analysed further to get a better understanding． Finance． management
is significant because it provides for the large capital outlay in the realestate development or rentals for commercial premises， especially inJapan． Besides， the sectorsi of department stores and GMSs／others may
best be separated with future scenarios for each sector will better answer

the implications for strategic emphasis． Furthermore， how the develop‑
ment of stages in global strategy is related to the profit status of parent

company is also an important issue that remains to be explained．

4．2 Significance and Expected Roles of Japanese Retailing lnvestments

Overseas
One may comment that the significance of Japanese global retailing
activities is not strong in terms of the number of affiliated companies andlocal employment， a figure of only 1．5906 compared to other sectors goingoverseas． HoWever，'

狽??retailing trade has a cultural and symbolic effectupon local population in their display of merchandise and promotion ofcultural activities． They present possibilities of adopting different
forms of life‑styles to local customers at major cities in NIES andSoutheast Asia with their show windows and displays． Of course theyalso present great challenge to the local retailers in how to serve better theneeds and desires of the customers and to compete in the market share．

Moreover， it is estimated the Japanese retailers may have captured ashare of the total turnover over 50％o in Hong Kong and Singapore due tothe presence． With more and more influence， the major retailers should
also be conscious of their significance in culture， with more sourcing or

support for good local merchandises， and for preservation of traditional
values in the host society． ln longer planning， former experiences tellthat they have to fit themselves into the local community and play therole of corporate citizen in supporting cultural and welfare activities．

4．3 Trends of Global Strategic Management： Network Relationships
and Strategic Alliance

Are the operation strategy of Yaohan and ltoh‑Yokado unique ？
Sometimes， enterprises operate in a very unique way．

Yaohan looks to the business opportunities of Hong Kong before and一34一Cheung ： Globalization of Large Japanese Retailers

after its return to China in 1997・（later changed to move its YaohanInternational to Shanghai in June 1996）， market potential and recent
growth of China， and develop her group into a distribution conglomerate．

It has other new moves like entering joint‑ventures with the Chinese

Venture lnvestment Corporation （CVIC） in opening more supermarketsi
claimed to be a hundred in number， in China， besides， hamburger shop
chain， shoe‑making factory， cellular phone manufacturing and marketing，
and large‑scale joint‑venture in Pudong at Shanghai． lt also plans to set

up a China business school with bases at Tokyo and Hong Kong to develop

more trained manpower with． the knowhow of both the import‑export
business laws and the Chinese language． Moreover， the group is trying to

make Use of the personal relationship with local business leaders in Hong
Kong， and Chinese political leaders for expanding its service trade there．
To conclude， its major spheres of activities are four areas ： department

stores， supermarkets， wholesaling and 'restaurants． One may observe
that， Yaohan， because of great domestic competition and especially at thethree major metropolitan regions （Keihin， Keihanshin and Chukyo）， has

limited choice but spent most of its corporate activities overseas forgreener lands． Of course the Big Store Law has also been playing a
restrictive role for starting big stores in Japan up till 1993． Yaohan also

has projects in Kitakyushu （IMM） and Sapporo （K． Wada， 1991 and1993）．

Seiyu， or the Saison group， on the other hand， has not been so active

overseas in terms of operating new outlets outside Japan． lt only oper‑
ates two fihance affiliates in Amsterdam， and lists its stocks at threestock exchanges in Europoe． The Seiyu Group has developed certain stra‑tegic alliance with nine distribution partners in bther Asian nations tomake cheaper bulk purchase for merchandises and seek for opportunities
for further cooperation．

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No． 46， 1996

Tokuyama Univ． Ronso

Notes
The study has been reported at the lnternational Conference on
Retailing and Services Science

Recent Advances injointly sponsored by the Canadian and European lnstitutes of

Retailing and Services Studies at Lake Louise， Canada in May 7‑10， 1994． Besides， a Japaneseversion has also been reported to the Kansai Chapter， Japanese Association of Economic
Geographers at Kansai University， late 1994． This is a ．revised draft but da七a are not updated

to 1996 as the period at 1992‑93 has presented the time with most rapid global expansion forJapanese retailers． A second study on the presen七status including the closures or the retreatedwill be necessary in the near futur'e．

Acknowledgments
The author likes to thank Professor Masakazu Ueda （Osaka City University）， Professor

Masayasu Muragami （Kansai University）， Professor Yoshimasa Kato （Kobe University ofCommerce）， Professor Masato lkuta （Ritsumeikan University）， Professor Akinobu Terasaka（Ryutsu Keizai University） and Professor Scott Erickson （lthaca College， New York） fot
kindly commenting on the earlier drafts or paper presentations． Needless to say， the sole re‑sponsibility and views of the paper remain with the author．

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