Population: 127,078,679 (July 2009) Size: 377,915 sq km Population density = 91 per square kilometre Population density = 343 per square kilometreReference: Kwintessential (2009)
Ethnicity • 99% are Japanese Religion • 84% observe both Shinto and Buddhism • Beliefs of Confucianism also impact many ethics and lawsReference: Kwintessential (2009)
Education • Literacy rate is close to 100% • 95% have a high school educationReference: Kwintessential (2009)
• Japanese is the sixth most spoken language in the world • Agglutinative language- works on complex system of honorifics • English lessons compulsory in Japanese schoolsReference: Clark et al (2010)
Following World War II • Strong economic growth- 10% in 1960s, 5% in 1970s • ‘Keiretsu’- close interlocking of manufacturers, suppliers and distributors • Guarantee of lifetime employmentReference: CIA (2010)
1990s • Economic decline due to poor investment and asset price bubble 2008 • Entered into recession due to GFC • Sharp downturn in business investments and exportsReference: CIA (2010)
2009/2010 • GDP = $4.137 trillion (US Dollars) • Ranked 4th in the world (GDP) • Among world’s largest producers of motor vehicles, electronic equipment, machine tools, steel, textilesReference: OECD (2009)
Exports • $516.3 billion (2009) • Ranked 5th in the world (GDP) • Important export partners- US (17.8%), China (16%), South Korea (7.6%), Taiwan (5.9%), Hong Kong (5.1%)Reference: OECD (2009)
Transport Motor Vehicles equipment Chemicals Exports- Commodities Semi- Electrical conductors MachineryReference: OECD (2009)
Imports • $490.6 billion (2009) • Ranked 6th in the world (GDP) • Important import partners- China (18.8%), US (10.4%), Saudi Arabia (6.7%), Australia (6.2%), UAE (6.1%)Reference: OECD (2009)
Machinery and Foodstuffs equipment Fuels Imports- Commodities Raw Textiles Chemicals materialsReference: OECD (2009)
• Economy is stabilising again after GFC- strengthened growth of exports • Economic growth and decline- 1956 - 2008 • Public Debt: 192.1% of GDPReference: World Economic 1956 2008 Prospects (2010)
• Be on time • Greet with a bow • May shake handsReference: Clark et al (2010)
Appearance • Dark conservative attire • Women- low heels and skirts Gestures • Do not talk with your hands- pointing is unacceptable Address • Last name and ‘san’- sign of respectReference: Williams (2008)
Social Events • Drinking important part of culture • If invited out let the host order and pay Negotiation • Non-confrontational- avoid saying no • Don’t lose your temper- strive for harmony • Polite- avoid embarrassmentReference: Clark et al (2010)
• Called ‘meishi’ • Treat like you would a person • Place on table in front of youReference: Kwintessential (2009)
• Hierarchy- most senior will sit furthest from the door • Always provide literature about your company Gift Giving • Ceremony surrounding this is very important • Gifts are not opened in front of giver • Always give a gift and receive it with two handsReference: Clark et al (2010)
Mitsubishi and Kim EngMotor vehicles + many Securities andother smaller companies investment broker Japanese Singaporean company company Q1: • What are the strengths of the companies? • How can this alliance be mutually beneficial? • Will this increase consumer desire to purchase their goods and services?
Mitsubishi and Kim EngQ1 • Strengths: Mitsubishi’s distribution capacity, Kim Eng’s equity research capability Maximize Share cost Gain access to business distributors Benefits Reduce risk Increase exposure market share
Mitsubishi and Kim EngQ1• Decreased costs + increase in economies of scale• Savings passed on to consumer = lower prices• Increased market share and exposure- new markets
Mitsubishi and Kim EngQ2:• Any complications that may arise?• What might the result of these complications be?• Do you think this partnership will last?
Mitsubishi and Kim EngQ2 Potential Complications Cultural Differences of differences opinion Complications may arise from Advantages May become may diminish one-sided
Mitsubishi and Kim EngQ2 Results of Complications• Greater understanding, strengthening of alliance• OR end to alliance• E.g. Cultural differences greater education and understanding• E.g. Becomes one-sided improve balance or end/discontinue alliance
Mitsubishi and Kim EngQ2 Will the alliance last?• Yes• Fairly large companies• Kim Eng- good reputation working with other companies• Clear agreements• Mitsubishi’s investment in Kim Eng
Symantec Middle East and ScanitInformation security Security Servicescompany Company Dubai-based Dubai-based company company Q3: • How can this alliance be mutually beneficial? • Will this increase consumer desire to purchase their goods and services?
Symantec and ScanitQ3 Mutually beneficial• Can tap into each other’s strategic strengths• Can offer wider range of services• Share costs• Multitude of services– create new market
Symantec and ScanitQ3 Customer Benefits• One company to manage range of systems• Cost and time management savings• Locally based• Cheaper, efficient customer support network
Q4:• Will this trend of forming international business alliances continue?• Yes!• Why: Advantages- may enter a foreign market• Also, share risks and expenses, share knowledge and gain competitive advantage
Q4 Advantages• Flexibility of strategy- range of alliance levels• Small businesses can participate Increased competition Need to operate on global scale• Growing need for alliances: Changing marketplace Industry coverage in markets
Mitsubishi and Kim EngQ5:• Assess the formation of this alliance in terms of the strategic factors for selecting entry modes Cultural Political and Legal Environment Environment Factors International Production and Experience Market Size Shipping Costs
Mitsubishi and Kim EngQ5 Entry Modes• Entry mode = strategic alliancea) Cultural Environment- Kim Eng’s extensive experience • Cultural differences and existing relationships
Mitsubishi and Kim EngQ5 Entry Modesb) Political/Legal Environment • Kim Eng- identify risks, conditionsc) Market Size • locate potential markets- risks and growth
Mitsubishi and Kim EngQ5 Entry Modesd) Production/Shipping Costs • identify cost-effective forms of productione) International Experience • Kim Eng’s prior experience abroad
CIA 2010, ‘Japan: Economics’, Central Intelligence Agency, 21 April, viewed 8 May 2010,https://www.cia.gov/library/publications/the-world-factbook/geos/ja.htmlClark RL, Ogawa N, Kondo M and Matsukura R 2010, ‘Population Decline, Labor ForceStability, and the Future of the Japanese Economy’, European Journal of Population.Dordrecht: 2010. Vol. 26, Iss. 2; p. 207Kwintessential 2009, ‘Japan - Language, Culture, Customs and Etiquette’, UnitedKingdom. Accessed on: 08 May 2010. Accessed via:http://www.kwintessential.co.uk/resources/global-etiquette/japan-country-profiles.html‘Developments in individual member countries: JAPAN’ Organisation for EconomicCooperation and Development. OECD Economic Outlook. Paris: Nov 2009. p. 144‘Japan’ World Economic Prospects. Oxford: Spring 2010. p. 27Williams DE 2008, ‘Japan’ International Business Center Newsletter. Accessed on: 08May 2010. Accessed via: http://www.cyborlink.com/besite/japan.htm
Case StudyBooz-Allen & Hamilton 2009, ’Strategic Alliances’, Small Business Notes. Accessed on: 10 May 2010. Accessedvia: http://www.smallbusinessnotes.com/operating/leadership/strategicalliances.htmlFlynn, F & Suzuki, I 2008, ‘Mitsubishi UFJ Considers Yuanta, Daewoo Investments’, Bloomberg, 12 May, viewed10 May 2010, http://www.bloomberg.com/apps/news?pid=20601087&sid=a4ICdxzvNTO4&refer=homeMitsubishi UFJ Securities 2008, ‘Mitsubishi Seals Strategis Alliance with Kim Eng’, Mitsubishi UFJ Securities, 22February, viewed 6 May 2010, http://www.sc.mufg.jp/english/e_press/pdf/e_press20080222.pdfMitsubishi UFJ Securities 2008, ‘Mitsubishi UFJ Securities invests in Kim Eng Holdings Limited’s subsidiary, KECapital Partners Pte. Ltd.’, Mitsubishi UFJ Securities, 8 August, viewed 6 May 2010,http://www.sc.mufg.jp/english/e_press/pdf/e_press20080808.pdfStenzel PL 2010, ‘Strategic Alliances’, Reference for Business, Encyclopedia of Business, 2nd ed., Advameg Inc.Accessed on: 10 May 2010. Accessed via:http://www.referenceforbusiness.com/encyclopedia/Sel-Str/Strategic-Alliances.html
Case StudyThomson Reuters 2007, ‘Kim Eng Holdings Ltd. And Mitsubishi UFJ Securities Co.Ltd Sign MOU on Strategic Alliance’, Thomson Reuters, 7 November, viewed 8May 2010, http://www.reuters.com/finance/stocks/keyDevelopments?symbol=KEHS.SI&pn=3Thomson Reuters 2008, ‘Kim Eng Holdings Ltd. Forms Strategic Alliance with Mitsubishi UFJ Securities’,Thomson Reuters, 21 February, viewed 8 May 2010,http://www.reuters.com/finance/stocks/keyDevelopments?symbol=KEHS.SI&pn=3Sutton, M 2005, ‘Japanese Trade Policy and ‘Economic Partnership Agreements’: A New Conventional Wisdom’,Ritsumeikan Annual Review of International Studies, vol. 4, pp. 113-135.Trevor Lloyd-Jones 2006 ‘Dubai company Scanit monitors airport security breaches’, Business IntelligenceMiddle East , 3 November, viewed 8 May 2010, http://www.bi-me.com/main.php?id=6414&t=1&c=34&cgUnited Arab Emirates, 2010, ‘Symantec blocks average of 100 potential attacks per second in 2009’ 6 May,Accessed on: 09 May 2010 Accessed via: http://www.ameinfo.com/231816.htmlWild, J, Wild, K & Han, J 2010, ‘Selecting and Managing Entry Modes’, in International Business: The Challengesof Globalization, Pearson Education Inc., New Jersey, pp. 378-407.
1. Demonstrate how to bow and greet a Japanese person2. What does the ‘okay’ hand sign mean to Japanese people?3. Why can it be considered bad for a Japanese person to smile?4. What are two of the benefits of forming a strategic alliance?