The Japanese Distribution System

Paper Summary:

This paper examines how distribution has often been considered the most effective non-tariff barrier to the Japanese market and how the distribution system in Japan is vastly different from its American and European counterparts. It discusses the evolution of the Japanese distribution system, its distinguishing features, methods of successfully penetrating the Japanese market and the future outlook for the system.

Outline
1.0 Introduction
2.0 Evolution of the System
3.0 Features of the System
3.1 High Density of Middlemen
3.2 Channel Control
3.3 Business Philosophy & Culture
3.4 Large-Scale Retail Store Law
3.5 Price and Return System
3.6 Distribution Keiretsu
4.0 Overcoming the Japanese Distribution System
4.1 Successes in Japan
4.2 Failures in Japan
5.0 The Future of the System
Endnotes

From the Paper:

"The complex distribution system in Japan has evolved for numerous reasons. Following the Second World War, there were no large stores selling products. The average Japanese consumer did not possess enough financial resources to purchase more than the bare necessities provided by small, localized shops. Due to citizen demand, the Japanese government opted to support these small stores. As a result, the distribution system was forced to cater to the localized shops. The Japanese government even enacted the Large-Scale Retail Store Law to ensure the continued survival of the small stores. Japanese consumers also prefer to purchase fresh goods, and possess limited storage space for bulk shopping. This further promotes the longevity of small stores and the necessary distribution chains."

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