The Japanese Distribution System

Paper Summary:

This paper explains that the Japanese Distribution System is completely non-conventional from the perspective of Western business practices, which makes it difficult for any Westerner to understand the complexities of the relationship between the various channels and their workers in Japan. The author points out that channel management assumes that active players, not passive consumers, form the major part of this system; they have individual needs and wants and apply these different needs and wants in no regular pattern. The paper stresses that the easiest and quickest method, by which to enter this market, is to form a strategic alliance with an established Japanese company such as the partnership of Kentucky Fried Chicken with Mitsubishi Keirishi.

From the Paper:

"The fact is that the Japanese Distribution System came into being during the early years of the seventeenth century, when several cottage industries in combination with the growing urban population gave rise to the phenomenon of a brand new class of people, known as the 'merchant class'. Another important fact to remember is the truth that almost all Japanese companies generally operate on the principle of very little equity, and a large amount of debts, wherein the manufacturers are ready to supply their goods to wholesalers in return for what are known as 'promissory notes' with terms that range from six months to more. "

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