Sales and Distribution Case Study

Daiei vs Aeon: Contrasting Retailing Strategies of the Japanese Retailers

OR

Abstract:
Daiei, which had been the largest retailer in Japan since 1972, lost its number one position to Ito-Yokado in 1999 and had accumulated debts to the tune of 2.4 trillion yen by 2000 due to the collapse of the bubble economy. Since then, it has been implementing various restructuring strategies and has been bailed out twice, receiving 640 billion yen of assistance from the banks. It still carried a debt of over 1 trillion yen in 2004 with UFJ (a Japanese bank) being the major creditor providing 400 billion yen. On the other hand, Aeon had emerged as the largest retailer in Japan with total revenues of yen 3.5 trillion in February 2004. It had become the leading contender for sponsorship in Daiei's rehabilitation programme undertaken by the Industrial Revitalisation Corporation of Japan and aims to become one of the world's top 10 retailers by 2010.

Pedagogical Objectives:

To discuss the contrasting growth strategies of Daiei and Aeon, with Aeon gaining a strong foothold in the highly competitive Japanese retail market that was once dominated by Daiei.

Keywords : Retailing strategies; Daiei; Aeon; Japanese retailing industry; Bubble economy; Speciality store operations; Supply chain management; General merchandising; Distribution efficiency; Competitive Strategies Case Study; Price competitiveness; Product differentiation; Japan’s Wal-Mart; Industrial Revitalisation Corporation of Japan; Rehabilitation programme; Worldwide Retail Exchange (WWRE)

Contents:

• About Aeon and Daiei
• Contrasting Retailing Strategies and Aftermath