Industrial Engineering & Management

The Localization of the Japanese Convenience Store FamilyMart in Taiwan

Abstract

Chung Sulin

This paper takes a preliminary step towards realizing the internationalization of Japanese convenience stores and investigates the localization process of Taiwan FamilyMart. The development process of Taiwan FamilyMart can be divided into three broad stages: market entry (1988 to 1993), growth (1994 to 2005), and maturity (2006 to 2014). This paper discusses how Japanese FamilyMart transferred its expertise and know-how to the Taiwanese market through these three stages with a focus on five-point critical success factors. This study’s research method uses survey analysis conducted via interviews with company executives and historical information collected from newspapers, magazines, and other secondary data. A combination of prior research and author own preliminary studies on the Japanese founded company suggests that a five-point summary explains FamilyMart’s critical success factors in the evolution of Japanese convenience stores: (1) The number of franchise stores exceeds corporate stores. (2) Sales for the ready-to-eat food category, such as the rice ball, are greater in Japan than in other countries. (3) The joint product distribution system with the manufacturer is crucial to operations. (4) The efficiency of chain management is enhanced by information systems. (5) Service, quality, and cleanliness (S&QC) are considered the fundamental responsibility of retailers. The results of this study show that Taiwan FamilyMart successfully managed the five-point critical success factors for effective Japanese convenience store operations despite initial barriers to knowledge transfer. Significantly, FamilyMart achieved market entry by establishing joint venture arrangements whereby local partners were granted majority management and encouraged to pursue innovation. This represents a core success factor. However, in addition to capital investment the company supported the technical expertise of local companies by maximizing resources. FamilyMart combined the contributions of the parent company Itochu Corporation and its related companies and suppliers in the domestic market to aid overseas development in the Taiwan local market. In conclusion, this study finds that barriers to knowledge transfer were overcome by establishing joint ventures with local partners, encouraging innovation, and applying effective strategies that aligned with the market context.