1. Lestra has not been successful in the Japanese market for only a handful of simple, yet deep reasons. One of the most important reasons for Lestra not making it into the market in Japan is the fact that it is not manufacturing the right product. In order to compete directly with other products in Japan, it has to come close to them in providing the same type of product. The dust test as carried out by Arai shows some fundamental differences in the types of products used and demanded by Europeans and Japanese. (Turpin, 1989)
Lestra definitely has shown great deal of flexibility and understanding by keeping relations with Arai and constantly upholding its intentions to screen the Japanese market. However, there are some basic problems which did not let Lestra reach the Japanese consumers. The Japanese demand for duvets was quite different from what Lestra produced for its consumers in Europe. These differences were not minor and the changes were only slowly reflected in the successive samples that Lestra kept sending each time.
I believe that the Japanese market is a huge one for Lestra – at least twice as big as its market in Europe. This is due to the population of Japan and the number of users in Japan. This is further supported by statistics of revenue and profits made by other firms in Japan in the same business (Katagara Kogyo had soaring profits of US $5.5 million from sales of US $2.8 billion). The importance of such a market could not be ignored and that is perhaps the biggest reason why Lestra never gave up its intent of entering the Japanese market.
There is perhaps no single person who can be blamed for the lack of success of Lestra in Japan. In fact, there is clearly a lack of communication, understanding and the transfer of information from the Japanese end to the French. Even when the information is provided, there is the problem of comprehension for Mekies thus resulting in further delay in timings. Mekies is, to a certain extent culpable for the lack of success of Lestra due to the fact that he was informed clearly about the dust problem by Legrand and Arai. However, the dust problem was not solved completely and tests only showed that the fabric density was lower than the traditional fabric density used in duvets by other companies in Japan. The knowledge of the dust problem by Mekies had automatically meant that the next sample would not have the same problem. However, the problem continued resulting in Lestra not yet making an entrance into the huge potential-bearing Japanese market.
2. The competitive advantage that Lestra possesses over its competitors is the international brand it offers. The “Made in France” tag is one of the most important and strongest selling points that Lestra owns. Japanese consumers are automatically attracted to the French brand. (Accuracy and Forecast Standard Error of Prediction Markets, 2008)
Japanese consumers have presumed assumptions about products from European countries regarding quality and durability. The equity value from the “Made in France” was one of the most important selling points for the Lestra products. This fact was highlighted throughout the case by different people. Japanese consumers bought German duvets and other products having international tag names and were willing to pay extra for them. This was due to the fact that they reverred those products for their international manufacture, quality and considered them to be superior to the products manufactured locally or imported from China.
Apart from that, the tag of Lestra which was an internationally reknowned brand for fashionable items would add to the competitive advanatge for lestra in Japan. Essentially speaking, the two are inter-related and perhaps the same thing. In simpler terms, the value of the product is eventually raised due to the international “Made in France” tag attached to it.
3. My personal recommendations would be that Lestra should continue pursuing the Japanese market. In spite of the setbacks that had been persisting and that had eventually stopped Lestra from entering the Japanese market earlier, the Japanese market is definitely a market worth pursuing for the French fashion designers.
The product as insisted by Arai, had to meet certain demands in Japan before going off the shelf. It was perhaps the insistence of Arai and not the end-user at that time which prevented Lestra from entering the market. Whatever the case may, it certainly is a point that should be fulfilled by Lestra. The issue may have risen up later, if Lestra had entered the Japanese market, and would have had resulted in greater problems. Thus, Arai probably had some long-term implications in his mind when he insisted on the French meeting the Japanese fabric in terms of density and dust. (Turpin, 1989)
I would recommend Lestra to follow Arai’s proposal of buying the fabrics from Germany for the duvets. This would not only relieve Lestra from concentrating their efforts on redesigning the fabric, it would also result in lower costs, reduced design efforts an eventually flexibility. Re-designing a fabric requires considerable amount of time and effort, which perhaps, may not be available in plenty due to the expansion of the Lestra brand into the United States. Thus, at this point in time, it would be far more feasible for Lestra to procure materials from Fermany for the fabric. This could then be worked upon to create the finished duvets and shipped to Japan.
The advantages of this approach are more than other alternatives. Buying clothes directly from Japan would mean that Lestra would be adding to its manufacturing costs. The German fabric is pre-processed and meets the Japanese standards leaving only the final processing to be carried out by the Lestra staff. The dust test will definitely then be passed by the Lestra design and will eventually take on the shelves across Japan in no time.
1. Accuracy and Forecast Standard Error of Prediction Markets. (n.d.). Retrieved October 19, 2008, from IOWA: www.biz.uiowa.edu/iem/archive/forecasting.pdf
2. Turpin, D. (1989). Lestra Design. International Institute for Management , Lausanne.