Japan’s Country Report
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Japan’s Country Report
加拿大国际政治论文代写 According to Hastings (2018), the country established its legal system based on legal codes used in France and Germany.
Executive Summary
Since Shinzo Abe became Japan’s Prime Minster in 2012, the country has undergone policy reforms that have greatly influenced its business market. However, the country’s relationship with its neighbors such as China, North Korea, and Russia continues to deteriorate due to ownership disputes regarding islands bordering Japan. Despite these political challenges, the country’s economy has grown rapidly since World War II. Particularly, it has developed to become the 3rd largest economy in the world albeit lacking natural resources and raw materials for its industries. To cater for the country’s deficit in raw materials, the government has established low tariffs that encourage imports into the country.
Still, foreign firms might experience non-tariff barriers when conducting businesses in Japan due to its unique cultural heritage.
Notably, Japan’s culture encompasses Buddhism, Confucianism, and Shintoism elements that influence its business environment. These elements determine the success or failure of firms conducting their businesses in the country. With regard to natural resources, Japan is highly dependent on energy imported from the Middle East.
Any political disruption in the Middle East is likely to affect the nation’s imports and greatly devastate its economy. Therefore, it needs to focus on alternative natural energy sources and decrease its dependence on imports. Based on Japan’s market environment, the proposed project will involves selling solar products to the Japanese population. The project will assist the country in reducing overreliance on energy imported from overseas. The business anticipates cultural barriers and challenges regarding declining Japanese population when introducing the product in the foreign market. Even so, the country’s stable economy, low tariffs, and limited resources present a need for solar energy.
2.Country Analysis
A.Political Environment
Japan is a constitutional monarchy with an Emperor whose power is limited by the constitution. Even though the Emperor might undertake diplomatic roles, the constitution limits the monarchy to performing ceremonial duties. According to Gov.uk (2018), Japan’s government comprises of the Legislative, Executive, and Judicial branches. The Legislative branch consists of the House of Representatives and the House of Councilors. The House of Representatives, also known as the Lower House, has 480 seats with members elected after every 4 years. The House of Councilors comprises of 242 seats with members elected by popular vote after every 6 years. The Executive Branch comprises of a Cabinet headed by the Prime Minister. Japan’s current Prime Minsters Shinzo Abe has served the country since 2012. 加拿大国际政治论文代写
Japan has enjoy political stability since Abe’s ascension to power. Gov.uk (2018) states that the Prime Minister’s administration has established positive relationship with powerful economics such as the United States. Particularly, the country’s relationship with the US has assisted it in strengthening its security and foreign policy. However, relationships between Japan and China have deteriorated over the years due to disagreements over ownership of islands in the East China Sea.
Additionally, the relationship between Japan and Russia has soured due to an existing dispute regarding the ownership of Hokkaido islands and Kamchatka Peninsula. Besides these disputes, Japan perceives North Korea as a direct threat to national security. In recent years, North Korea has proved its ballistic missile and nuclear weapons strengths and, thus, political disputes between the two states might harm operations of foreign farms in Japan. Indeed, strained relationships between Japan and these neighboring countries poses a political risk for foreign firms operating in the region.
B.Legal Environment
Japan’s legal system resembles European civil law systems developed in the 19th century. According to Hastings (2018), the country established its legal system based on legal codes used in France and Germany. Particularly, it established its legal system in the mid-19th century following the Meiji Restoration. After restoration of the imperial rule, the country adopted the Meiji Constitution as its primary lawmaker. However, after the Second World War, Allied states restructured the country’s constitution. Since America had a significant influence in restructuring Japan’s constitution, the country’s current legal system is made up of the American and continental law. Despite Western influence, Japan bases its civil and common laws on traditional Japanese values. Therefore, while the country’s legal system mirrors the continental and American laws, traditional Japanese values influence its law concepts. 加拿大国际政治论文代写
Sekiguchi et al. (2018) claims that foreign investors in Japan can establish joint stock companies by obtaining registration from the commercial registry in their area of operation.
The process entails a registration fee charged at a 0.7% rate. Additionally, investors must produce documents that specify the name, purpose, location and governance issues regarding the business during the registration process. Registered companies must adhere to Japan’s laws regulating employment relations including the Labor Standards Act, Labor Contract Act, Labor Union Act and Labor Relations Adjustment Act, and Industrial Safety and Health Act (Sekiguchi et al., 2018). Japanese labor regulations apply to all workers in the country, regardless of the employers’ or employees’ nationality. If a foreign company employs expatriates, they must obtain a valid visa that specifies their area of work and place of residence.
Additionally, Sekiguchi et al. (2018) posits that foreign companies operating in Japan must adhere to the Companies Act and the corporate governance code. The corporate governance code highlights governance principles that foreign firms must follow when operating in Japan. Over the year, the Japanese government has made numerous amendments on its Civil Code to reflect societal changes and contemporary business practices. Among the amendments instituted in the code is pre-transaction reporting for any acquisitions conducted between foreign investors. However, the country lacks legislations that prohibit foreign investment and shareholding except in aviation, telecommunications, and broadcasting industries. Furthrmore, the country has established economic sanctions that restrict companies from engaging in certain trading activities with Russia and North Korea. Foreign companies that operate in Japan and plan to conduct business with other countries must observe all existing restrictions.
C.Economic Environment
After the Second World War, Japan established strategies that fostered rapid economic development. Currently, the country is the 3rd largest economy globally and a high-tech powerhouse economy in Asia (Gov.uk, 2018). Despite its small geographical size, Japan has the largest export market for firms in the US, UK, and China. Moreover, the country has depicted its desire to develop intellectual property and new trends in the recent years. In fact, it has allocated the 2nd highest amount of resources to Research and Development in the globe. Its holds financial assets amounting to about $14.71 trillion, which is more than 300% of its GDP (Gov.uk, 2018). Arguably, the country has achieved massive economic growth due to its exports. Since Abe’s ascension to power, Japan has experienced a 1% annual economic growth. These statistics show that Japan has a lucrative economic environment for foreign firms. 加拿大国际政治论文代写
Among Japan’s economic risks are its limited natural resources and declining population. Due to its limited natural resources, the country is highly dependent on imports. Japan imports numerous products including food, gas, and raw materials for its industries. Natural occurrences such as Tsunamis have further incapacitated the country’s energy sources, proving to be a key threat to its economic development. Besides, Japan’s population is declining rapidly. In fact, economists project Japan’s population to decline from 127 million to 100 million in 2053 (Gov.uk, 2018). The declining population coupled with the ageing workforce are a key challenge to the country’s economic development efforts. The Japanese government has established policies to address population decline and foster economic growth. Particularly, the government has developed structural reforms and deployed flexible fiscal policies to address population decline and revive the country’s economic growth.
D.Trade Environment
Despite its rapid development, Japan lacks natural resources and, thus, it must import raw materials for use in its industries. The country’s key imports include coal, oil, iron, aluminum, wood, ore, and copper that are essential for its massive energy requirements (AFE, 2019). Subsequently, it obtains capital to cater for these imports through its major exports such as cars and electronic equipment. Japan’s key exports have changed over the years from agricultural products to manufactured goods. The country is less competitive in the agricultural sector due to its limited geographical area. Moreover, it is less competitive in industries that require intense energy such as aluminum and petrochemicals due to insufficient domestic sources of energy. Therefore, trade is a crucial component in Japan’s economic growth.
Japan’s key trading partners are Middle East countries and the United States. Due to its massive energy deficit, the country has established powerful ties with Arab countries where it purchase oil. In fact, the country spends more funds on its oil purchases compared to other imports (AFE, 2019). However, Middle East countries cannot exhaust Japan’s export products. 加拿大国际政治论文代写
For this reason, the country has established close ties with the US that provides a lucrative market for its exports.
To foster trade, Japan has established low tariffs for U.S. companies operating in the country. According to the International Trade Administration (ITA) (2018), Japan has one of the lowest global trade tariffs. Average tariff rates in the country include 13.1% for agricultural products, 2.5% for non-agricultural products, 9.2% for clothing, 2.3% for clothing, 0.2% for electrical machinery, and 0.0% for non-electrical machinery (AFE, 2019). The country’s low tariffs are its key incentives for attracting foreign firms.
Despite low trade tariffs, foreign companies must evaluate other barriers in Japan’s business industry before establishing their operations in the new market. According to the ITA (2018), U.S. companies might encounter non-tariff barriers in federal regulations that favor domestic while discriminating foreign products. Additionally, foreign firms might experience licensing challenges when conducting business in the country. These challenges might arise from licensing powers allocated to industrial associations that limit membership to domestic business. In some sectors, Japan has established regulations that require companies to demonstrate past business experience in the country. In this manner, new entrants without prior experience in Japan might experience challenges venturing in the foreign market.
E.Cultural Environment 加拿大国际政治论文代写
A country’s cultural environment encompasses values, beliefs, and attitudes of the local population that shape business operations in the region. Japan occupies a unique geographical area that shapes its culture and social norms, which influence business operations in the country. The country consists of four main islands surrounded by smaller islands (Franklin, 2017). Due to this geographical isolation, the country has nurtured one of the richest cultures globally. Its culture contains Buddhism, Confucianism, and Shintoism elements that form the foundation of the country’s business environment. For instance, Confucianism elements promote the development of a collective mentality and establishment of hierarchical relationships among the Japanese. These relationships have fostered the long-term relationships between employers and employees, leading to the development of business practices such as lifetime employment. Therefore, Japan’s cultural components influence business functions such as the decision-making process and management style. 加拿大国际政治论文代写
Japan’s unique cultural heritage has a significant role in determining strategies adopted by multinationals.
For instance, Confucianism elements have fostered a collectivist culture among the Japanese. Notably, Confucianism emphasizes communities and group relationships, meaning that the Japanese associate their accomplishments with organizations where they operate. In this regard, Japanese employees are likely to work in a single organization during their entire careers (Aliasis, 2018). Conversely, employees in the US tend to value individual accomplishments over success in groups. Since Americans are more individualistic, workers tend to focus on individual aspirations rather than the objectives of their employees. For these reasons, organizations operating in the US tend to experience high employee turnover compared to their Japanese counterparts.
Additionally, Confucianism promotes hierarchical relationships that differentiate the Japanese business environment from that in America. In Japan, employees earn respect in an organization based on their experience (Aliasis, 2018). In this regard, employees who have worked in a company for a long time tend to occupy a higher status compared to staffs who have not worked in the firm for long. The hierarchical relationship within companies in Japan have fostered development of long-term relationship between employers and employees, further reducing workforce turnover. While the American workforce depicts a hierarchical relationship, employees in the country earn respect based on their individual accomplishment rather than experience.
3.Proposed Plan for New Product Entry 加拿大国际政治论文代写
A.Challenges and Opportunities for doing Business in Japan
1.Challenges
Cultural differences is a major challenge for multinational organizations operating in Japan. The Japanese have a rich culture fostered by elements of Confucianism, Buddhism, and Shintoism. Due to these elements, employees tend to develop collectivist and hierarchical relationships in the workplace. Since the US’s workforce emphasizes individualism, American multinational companies might experience challenges in motivating workers when they expand their businesses to Japan. Additionally, the businesses are likely to experience language barriers when operating in the country.
Furthermore, multinationals are likely to experience challenges due to the declining and aging Japanese population. The country’s declining and aging population is a key threat to its labor force. As people age, they retire from the labor force, leaving a gap in the country’s major industries. Jack (2016) claims that Japan does not have enough young workers to fill the vacant job positions left by the aging workforce. For this reason, multinational organizations operating in the country are likely to suffer from lack of manpower. Besides, insufficient manpower will reduce the country’s production rate and devastate its economy. 加拿大国际政治论文代写
2.Opportunities
Japan has as stable economy that provides multinational organizations with an attractive market to expand their businesses. According to Gov.uk (2018) the country holds high financial assets compared to its population, which contributes to its economic efficiency. This economic environment facilitates the production of goods and services for local and foreign companies in Japan. Hence, the country’s stable economy provides U.S. firms with an attractive investment opportunity.
Additionally, Japan has established low tariffs to encourage foreign firms to invest in its market. For this reason, the country provides domestic and multinational organizations with a fair environment conduct their businesses. Moreover, Japan’s positive relationship with the US offers American companies with an opportunity to expand to the Asian country. For this reason, US companies can take advantage of the low tariffs and close ties between the two countries when they expand their operations to Japan. 加拿大国际政治论文代写
Moreover, Japan’s limited natural resources provides an opportunity for companies that import energy-related products such as oil and gas to the country. Notably, energy is a key requirement for improving industrial production and enhancing the lives of the local population. While the country obtained energy from its nuclear reactors at the beginning of the 21st century, a Tsunami in 2011 incapacitated its production plants (Gov.uk, 2018). Even though Japan has since repaired some nuclear reactors, it still relies heavily on energy imports, creating an opportunity for firms that manufacture energy-related products.
B.Proposed Product 加拿大国际政治论文代写
Based on the challenges facing Japan, an ideal product to present in the market is solar panels. Notably, Japan has proved to be an economic giant in Asia and has developed to become the 3rd largest economy in the world. The country has experienced a steady economic growth fostered by its stable political environment. With the steadily growing economy, the country needs a reliable energy source to cater for its industrial and domestic needs. Natural disasters such as Tsunamis further exacerbate the situation when they incapacitate nuclear reactors. Besides, the nation lacks natural resources such as oil and gas, which could serve its energy needs. As the country continues to develop, the rate of energy consumption among its industries and citizens increases. The growing economy and increased energy demand creates the opportunities for U.S. investors to venture in Japan’s energy sector.
Japan is densely populated with about 127 million inhabitants living in an area that is less than 378,000 square kilometer (CNBC, 2018). The country’s energy consumption is nearly 3.38 tons of oil, which is equivalent to the energy consumption in Europe. In 2016, Japan was the highest importer of natural gas, 3rd highest importer of coal, and 4th highest importer of oil. Based on these statistics, Japan is the highest energy dependent nation among developed countries. Annually, the nation’s per capita power consumptions exceeds that of Germany, France, and China. The country generates these massive amounts of power primarily through gas, coal, and fuel oil. Conventional thermal energy generation systems contribute about 82%, hydro generates 8%, biomass and waste account for 4%, and nuclear sources produce 2% (CNBC, 2018). These statistics show that despite Japan’s energy deficiency, solar energy is an unpopular method of energy generation.
C.Local Competition for the Product and the Firm’s Competitive Advantage
In 2012, the Japanese government introduced the Feed-In-Tariff (FIT) to accelerate investment in the country’s energy sector. The FIT regime required firms to use electricity generated through environmentally-friendly processes such as wind, solar, and biomass (Davies & Lnglis, 2017). To promote the initiative, the government provided organizations with generous FIT rates and lucrative power purchase agreements for domestic and foreign investors.
This initiative attracted players in the renewable energy industry and by 2016, solar energy accounted for 60% of existing FIT applications. Besides, Japan’s solar industry attracted banks, mining companies, renewable-energy firms, and foreign developers who either invested directly or partnered with other investors. Among the foreign organizations that ventured in the country’s solar industry are German’s Wirsol, United States’ General Electric and Goldman Sachs, France’s Total, and South Korea’s Hanwha Asset Management. Therefore, the business is likely to experience stiff rivalry from other firms in Japan’s solar energy industry. 加拿大国际政治论文代写
The company’s competitive advantage in Japan’s solar industry will be its products’ design and performance.
To begin with, the company will provide solar panels with anti-glare surfaces to Japanese consumers. In this manner, the products will appeal to customers who value excellent designs that do not contrast with their surrounding environment. Additionally, the company will aim at using less materials and environmentally friendly energy sources when producing the solar panels.
Through this strategy, it will manufacture cost friendly products that promote existing environmental conservation efforts in Japan. Moreover, the firm will consider returns on investment when manufacturing its solar panels. Hence, it will incorporate features that will enable the panels to generate more electricity compared to other similar products in the market. Besides, the company will develop quality and durable products that will provide users with reliable yields in the country’s harsh weather conditions. These strategies will provide the company with a competitive advantage over its rivals in the energy-generation industry.
D.Entry strategy 加拿大国际政治论文代写
1.Entry Mode
Licensing will be the most appropriate entry mode for selling solar products in Japan’s market. Through the licensing entry mode, the businesses will provide the licensee with rights such as trademarks, patents, and managerial skills to manufacture and sell solar products in Japan (Langbacka, 2018). In this regard, the organization will not have to develop a new branch in the foreign market. However, licensing will deny the business exclusive control over the licensee’s operations. Additionally, the licensee will be the key beneficiary in case of the products’ success. Even so, the entry mode is appropriate for the proposed product because it will allow the firm to avoid cultural and legal barriers when venturing in the Japanese market.
2.Distribution Channels
Japan has high population density and powerful culture that influences companies’ distribution channels. To effectively distribute the product, the organization will use small retail stores to reach consumers easily. In addition, retail stores will be an appropriate distribution channel for the solar products due to Japans’ culture. Unlike the Americans, the Japanese prefer firms that offer face-to-face contact and depicts a sense of obligation when conducting businesses (International Trade Administration, 2018). Therefore, distribution through small retailers will allow the business to attract buyers and develop customer loyalty in the foreign market.
3.Promotion Methods
An appropriate method of promoting solar products in Japan will be through the media. The business will create advertisements and encourage its employees to share them with their friends through media platforms such as Facebook and Twitter to increase brand awareness. Additionally, the business will create advertisements on local and regional newspapers to promote the products. Due to the existence of numerous players in the country’s solar-energy industry, the organization will differentiate its promotional strategy through sponsorship marketing. Notably, the Japanese have a collectivist culture whereby individuals perform actions for the wellbeing of the community. In this regard, the business will support social initiatives such as local sports programs to promote its products.
References 加拿大国际政治论文代写
AFE (2019). Economy and trade fact sheet: Basic points about Japan’s economy and trading patterns. Columbia University, East Asian Curriculum Project. Retrieved from http://afe.easia.columbia.edu/japan/japanworkbook/economics/factshe.htm
Aliasis. (2018). Cultural differences between the USA and Japan. HubPages Inc. Retrieved from https://owlcation.com/social-sciences/Cultural-Differences-Between-the-US-and-Japan
CNBC. (2018). The dawn of Japan’s energy transition? CNBC LLC. Retrieved from https://www.cnbc.com/advertorial/2018/06/22/the-dawn-of-japans-energy-transition.html
Davies, A., & Lnglis, J. (2017). Japan: Japan’s solar PV market – Some observations. Mondaq. Retrieved from http://www.mondaq.com/x/599398/Renewables/Japans+Solar+PV+Market+Some+Observations 加拿大国际政治论文代写
Franklin, S. (2017). Japanese Business Culture: A Study on Foreigner Integration and Social Inclusion. Honors Theses. 477
Gov.uk. (2018). Overseas business risk – Japan. Department for International Trade and Foreign & Commonwealth Office. Retrieved from https://www.gov.uk/government/publications/overseas-business-risk-japan/overseas-business-risk-japan
Hastings (2018). Japanese law research guide: Legal system and Statistics. Retrieved from http://libguides.uchastings.edu/japan-law/legal-system-stats
International Trade Administration (ITA) (2018). Japan-Trade barriers. International Trade Administration. 2018. Retrieved from https://www.export.gov/article?id=Japan-Trade-Barriers 加拿大国际政治论文代写
International Trade Administration (ITA) (2018). Japan-Trade barriers. International Trade Administration. 2018. Retrieved from https://www.export.gov/article?id=Japan-Import-Tariffs
Jack, D. (2016). The issue of Japan’s aging population. Law School International Immersion Program Papers, No. 8, Retrieved from https://chicagounbound.uchicago.edu/cgi/viewcontent.cgi?article=1034&context=international_immersion_program_papers
Langbacka, A. (2018). Pros and cons of different market entry modes: A study of Finnish companies entering the South Korean market. International Business Management.
Sekiguchi, K., Higashi, Y., Oyama, H., Hamada, M., & Matsumoto. (2018). Doing business in Japan: Overview. Thomson Reuters. Retrieved from https://uk.practicallaw.thomsonreuters.com/1-519-3917?transitionType=Default&contextData=(sc.Default)&firstPage=true&comp=pluk&bhcp=1
