Ikinari Steak: Reflections On A Failed Foreign Market Expansion

Ikinari Steak: Reflections on a Failed Foreign Market Expansion

Nakato Hirakubo, Brooklyn College Caroline Chen, San José State University George Whaley, San José State University Craig Davis, Ohio University

Abstract

President Kunio Ichinose opened the first Ikinari Steak restaurant in Ginza, Tokyo, in 2014, and it gained instant popularity. The standing-only fast-casual dining format was successful, so Ikinari Steak expanded locations and revenues grew. President Ichinose always wanted to own a restaurant in New York City; therefore, Kuni Corporation, the parent company that owned Ikinari, Pepper Steak, and other restaurants, decided to expand Ikinari Steak to the United States. The company’s U. S. management questioned the likely success of the novel standing-only fast-casual dining format in the U.S. These U. S. company executives warned President Ichinose the Japanese business model was unclear for U.S. restaurant market, the market mix did not address local customs and culture, and the local dining tastes of U.S. customers were different from Japanese dining tastes. Nonetheless, the first Ikinari Steak location in the U.S. opened in Manhattan's East village in February 2017. Rapid expansion in Manhattan was planned over five years, and eleven locations were opened by 2018. However, the standing-only fast-casual dining format was not popular in the United States, and Kuni Corporation closed nine of the eleven locations in 2019. This descriptive, evaluative case concludes at year-end 2019 with President Ichinose contemplating what went wrong with his strategy to expand in the United States.