Environmental Factors in Marketing

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Toys R Us, a major toy retailer in the United States, has rapidly expanded into 29
countries around the globe. It began with expansion into Canada and Singapore in the 1980's and moved into the Chinese market in 1991 (Brahan, 2010). The large retailer boasts a 95% satisfaction rate among U.S. consumers, due to its current model of using large warehouse-like spaces to fulfill the wishes and needs of almost every child or parent who shops in its stores or online. However, in expanding into international markets, this strategy may be less effective, particularly in countries where disposable incomes are much lower and costs for physical space might not be worthwhile establishing.

Realizing the challenges in setting up and operating physical space in the various
countries in which it has expanded, Toys R Us has taken the approach of expanding only
into those regions where disposable incomes and purchasing habits are very similar to those in the U.S. It also chooses more local product offerings for each of the countries in which it operates. Global economic interdependence relies on the success of one organization, for others, such as toy manufacturers and suppliers, to be successful. Therefore, choosing countries where disposable incomes are similar means that those suppliers and manufacturers whose goods are sold at the various countries' Toys R Us sites should profit enough to make the relationships with the organization worthwhile. In addition, the economies of various regions should benefit positively by setting up stores in international markets. In places where there is little infrastructure to support product sales, with little or no internet access for inventory processes or lack of technological support for supply chain activities, maintaining a store is much more challenging.

Regional or national laws also influence how each store location operates. Working
hours and days are different in many locations. Some employees may legally work longer, while others must provide more time off, to meet national labor standards. In France, for example, the typical work week is 35 hours and there are strict limits on the amount of overtime one can work, no more than 48 hours in one week. In addition, workers are given two and half paid days of leave for each month worked, after working only one month in each calendar year.(Confederation Fiscale Europeenne, 2011). There are further restrictions on the number of overnight hours, generally limited to an 8 hour ...