Japan’s Export: A Business Opportunity
Maria Griselda Dillet

Marketing 4308

Table of Contents

Executive Summary 3

Japan 5

Government and Politics 5

Foreign Relations 6

Economy 6

Imports and Export 7 Imports 8 Export 9

Business Opportunity 10

Making the Opportunity Work 13

Recommendations 14

Declaration 16

Works Cited 17

Executive Summary Japan is a country east of South Korea, China, Russia and North Korea. It consists of 6852 islands. The country’s authority is vested in the monarchy. There is an Emperor, who is a ceremonial figure. The country has two parliaments, i.e. the House of Representatives and the House of Councilors. Japan has strong foreign relations being a member of the APEC, G8 and ASEAN. It has been a member of the United Nations since 1956. It is the third in the world as far as the national economy is rated. Japan’s main imports are raw materials, fuels, machinery and equipment, textiles, chemicals and foodstuffs. Its main import partners are the United States, Saudi Arabia, European Union, China and United Arab Emirates. The country’s main exports are motor vehicles, office machinery, semiconductors, scientific and optical equipment and other electronic components. It exports products to the United States, European Union, South Korea, Hong Kong, China and Taiwan. The idea is to start a company and locate it in one of the African countries. This company will be involved in the purchase of Japanese products and supply to the African market. This means that the company will be a main source of import in Africa and a recognized export partner in Japan. In order to make the exporting business work, proper planning will be essential. The sources of enough capital will also take precedence. Accountants, IT specialists and lawyers will be part of the business. Moreover, there will be a need to study the competition and develop marketing strategies. The export business should adhere to set polices of trade, export and import. It should also generate enough capital in order to start operations. This will avoid delays, when the process commences. Planning should be done comprehensively in order to avoid mistakes. Financial obligations must be clearly presented for the facilitation of budget management. Above all, practitioners should be employed in order to handle different sectors of the business.

Japan Japan is an Island country in the east of Asia. It is located in the Pacific Ocean and lies to the east of China, South Korea, North Korea and Russia. Japan is made up of 6852 islands (Totman 9). The four largest islands that make up Japan include Hokkaido, Honshu, Shikoku and Kyushu. They comprise of 97% of Japan’s land area. Japan has a population of over 127 million people making it the tenth country with the largest population. The country is a strong economic power. Its economy is the world’s third largest by nominal GDP as well as by purchasing power parity. Although the country has renounced its rights of war declaration, it supports modern military with the 6th largest budget. This is used for peacekeeping and self-defense roles. It has one of the lowest rates of homicide (the second after Singapore) in the world. According to the Ministry of Health, Japanese women are second in the world as far as life expectancy is rated. In addition, the country has the third lowest rate of infant mortality.

Government and Politics Japan’s authority is vested in the constitutional monarchy. The Emperor is just a ceremonial figure referred to be the symbol of the state and the unity of the people. Power is vested chiefly by Japan’s Prime Minister as well as other elected Diet members. However, sovereignty of the nation belongs to the people of Japan. The Diet is a bicameral parliament that has 480 seats in the House of Representatives, who are elected by popular vote, and 242 seats in the House of Councilors. The prime minister of Japan heads the government. He/she is appointed by the Emperor after the Diet offers designation among its members. The prime minister heads the cabinet as he/she dismisses the ministers. The Japanese constitution provides that the Emperor has a right to promulgate legislation that is passed by the Diet (Bhagwati 12). He has no power to oppose or reject legislation. The country has a court system that is divided into four parts: the Supreme Court and three other lower courts. The Six Codes forms the Japanese statutory law.

Foreign Relations Japan is a member of the APEC, G8 as well as “ASEAN plus Three” and a participant in the Summit of East Asia (McCargo 58). Japan signed a pact with Australia in March 2007 and India in 2008. This country is the third largest donor after the United States and France as far as official development assistance is rated. In 2009, it donated $9.48 billion. Japan and the United States have close economic and military relations through the US-Japan security alliance as the main cornerstone of the country’s foreign policy. Japan has been a member of the United Nations since 1956. It has served as a non-permanent Security Council for 19 years. Moreover, it is part of G4 nations striving to become permanent members in the Security Council. The country is a subject of several territorial disputes. It has been in conflict with Russia over the South Kuril Islands, with China over Senkaku Islands, with South Korea over Liancourt Rocks and with China over EEZ. There is an ongoing dispute between Japan and North Korea about the abduction of Japanese citizens, its missile programs and nuclear weapons. The country maintains one of the fourth largest military budgets in the whole world. It contributed to the troops that fought in the Iraq war, but later withdrew its forces. Its Maritime Self-Defense Force is a participant in RIMPAC exercises. Japan’s military has been used in peacekeeping missions.

Economy The structural features of Japan’s economic growth were developed in the Edo period. They include transport routes by road and water, the futures contracts, insurance and banking of Osaka rice brokers. In 1868 Meiji period, Japan made economic expansion with successful embrace of the market economy. Many present-day enterprises were founded at that time, and Japan became the most developed country in Asia. The Japanese post-war economic miracle was implemented between the 1960s and the 1980s (Dick 28). Unfortunately, the market slowed down in the 1990s. This period is called the Lost Decade by Japanese. It affected the domestic policies and asset price bubble. The efforts of Japan government to revive economic growth received little success and were largely affected by the global economic slowdown in 2000. The economy started to recover in 2005. In the same year, the GDP was 2.8% and surpassed the U.S. and European Union’s growth rates. In 2011, Japan was rated as the third national economy in the world. It is placed after the US and China in terms of GDP and purchasing power parity. GDP was downgraded by the 2009 global recession, the earthquake and tsunami in 2011. The country had a large industrial capacity. It is a home to the largest and most technologically advanced manufacturers of motor vehicles, machine tools, electronics, ships, steel and nonferrous metals, textiles, chemical substances and processed foods. 13% of Japan’s land is occupied by agricultural businesses. The country accounts for almost 15% of the global fish production, which is the second after China. In 2010, Japan’s labor force compromised of 65.9 million workers. The country has a low unemployment rate, thus, reducing joblessness considerably. In 2007, 20 million people in Japan lived in poverty. The limited land supply in Japan’s urban areas characterized its housing patterns.

Imports and Export In 2005, Japan’s export summed up to US $4,210 per capita. The main markets of Japan’s export of 2009 were the United States (16.42%), China (18.88%), Taiwan (6.27%), South Korea (8.13%) and Hong Kong (5.49%). The country is the main trading nation and the largest investor in the world (Greaney 102). International trade is the backbone of Japan’s economy. At one time, trade was Japan’s primary form of economic international relationships. By 1980, the foreign investment rose rapidly and added a new increasingly influential dimension. This broadened the Japanese business horizons giving new world prominence to the country.
Imports
Japan entered the postwar period with adverse import barriers. All the country’s products were the subject of quotas; others faced high tariffs, and MITI controlled the distribution of foreign exchange that companies had to pay for imports. These policies were justified by the weakened situation of Japanese industry as well as the country’s trade deficits (Dean 45). In 1980, some quotas were dropped. Japan had only 27 items under quota by mid of that year. It continued to receive complaints and pressure from trading partners. Standards, government procurements, testing procedures and other policies restrained the imports. These barriers were difficult to document, and complaints were numerous. The 1990s saw the Japanese assets price bubble collapse. The distribution chains were opened by discount markets, and companies moved to foreign trade in order to avoid losses as well as bankruptcy. Products manufactured in South-Asian countries by Japanese companies were re-imported at a reduced price. The consumers of Japanese products also changed considerably. The economic problems made many Japanese citizens look for cheap prices without taking care about national pride. Between 1960 and 1970, the Japanese imports were regulated by exports. Exports generated foreign exchange used to purchase imports. By 1980, imports lagged behind the exports at an annual rate of 2.9%. This led to the large trade surpluses. Japan depends on imports for raw materials more than other industrialized nations. It imports 50% of caloric intake foods, 30% of its total food consumption, 85% of its total energy needs and almost all its copper, iron, nickel, lead. Long-term imports’ growth was influenced by various factors. One of them was growth in Japanese economic and income levels. The rise in income levels led to increased demand on imports for both consumer satisfaction and production. The country formulated standards in order to regulate the quality of the imported products. Japan imports raw materials, which it processes into the highly valued technological products. Its main imports include fuels, machinery and equipment, chemicals, textiles, foodstuffs and raw materials. The country’s main import partners are the United States, Saudi Arabia, European Union, China and United Arab Emirates.
Export
The government of Japan had promoted export as the issue of concern for many years. Officials in the government agreed that the country needed to import in order to grow and develop. Furthermore, it needed to generate exports that would cater for those imports. There were difficulties of adequate exports to pay for imports. The resulting deficits justified the import restrictions and the export promotion programs (Dean 66). Japan is a processing nation. Thus, it needed to import enough raw materials while being required to pay added value for them as well as export some output. The reason of strong economic growth of nations depends on added value to inputs. The Japanese government formulated and implemented the industrial policy that guided the economy in the right direction. Japan promoted exports using two methods. One of them was to develop world-class industries, which could substitute the imports and compete in the international market in that way. The second method was to offer export incentives for firms. In the mid-1960s, the chronic trade deficit ended diminishing the need to promote export policy. Taxes were eliminated in the 1970s. The success of Japanese exports led to a backlash of other countries’ industries. In the 1980s, Japan continued to use the industrial policy in order to generate new industries. The policy of export restraint in particular industries also emerged. Color television, steel and automobiles were among Japanese exports to the United States during this period were. However, these products were the subjects of restraints at various times. The success of exports in Japan defined it as a country that heavily depends on exports. For instance, half of the automobiles manufactured in Japan were subjected to exportation. The export growth between 1960 and 1970 was phenomenal. In 1960, the export was $4.1 billion. The growth of merchandise exports was 16.9% that year and 21% in 1970. Between 1981 and 1988, export grew by an average of 11.3% annually. By 1990, exports reached $286.9 billion. The success of Japanese exports was fueled by the increased demand for products in the United States and the removal of trade barriers in key markets. The products were also price competitive. The Japanese watches, steel, ships, automobiles, television receivers, semiconductors and many other products got a positive reputation of high standards and strict quality control. This increased demand for Japanese exports considerably. The country adopted technological progression, which improved their exports in terms of quality and quantity. In 1991, the Japanese main exports were office machinery, motor vehicles, semiconductors, scientific and optical equipment and other electronic components. Unfortunately, the Fukushima Nuclear Disaster of 2011 raised concerns about the safety of Japanese food exports. Factory output was seriously affected by problems with power supply. Its key export partners are European Union, United States, South Korea, China, Honk Kong and Taiwan.

Business Opportunity Japan is the largest exporter in the world. Entrepreneurs identify opportunities and grab them. There is a large business opportunity in Japanese exports. The opportunity involves distribution of exports in the world. As it was mentioned earlier, Japan exports products to United States, European Union, South Korea, Hong Kong, China and Taiwan. It is evident that Japan does not export products to developing countries and to Africa for that matter. This is a large market that is not exploited. The reason is that Africa is full of potential elite, who is can purchase motor vehicles and other products directly from Japan. The idea is to start a company and locate it in one of the African countries. This company will participate in the purchase of Japanese products and supply to the African market. This means that the company will be a significant source of import in Africa and a recognized export partner in Japan. However, entry into a new arena with limited contextual knowledge can lead to costly errors. Thus, a comprehensive analysis of the intended market is the key to success. The findings can receive an overwhelming or underwhelming response about the product or service. This information is necessary before someone invests a reluctant sum of money. Thinking about people and the location is essential. Contextualization of products or services in the socio-economic context is also significant. Before investing in the company, it is vital to identify the target markets, available alternatives, existing competitors and the market situation. In addition, pragmatic such as logistics, route to market, barriers, regulations, suppliers and tariffs should be taken into account. The business practice will be unique by default. In preparation for export of products from Japan to Africa, it is significant not just to assess but also scrutinize ones potential and be prepared for the worst. One should not be inspired by optimism. The screened market essentialities include industry structure, product demand, competition and acclimatization (Kotler and Keller 73). After adequate preparations to enter the market, the next step is the market entry. It seems simple on paper, but it is not easy in practice. One of the main considerations is to have a marketing strategy that acknowledges the development of international trade. The second consideration is financial strength in terms of resources and backing. People and how they will help develop the new market and products for export are the following issues of concern. Erudition of local requirements such as pricing, packages, labeling among others should also be considered. Another item of consideration is the cost as well as the export payment procedures. The regulations and standards of products in the target market should be evaluated. Moreover, it is necessary to think about the fees required to alter products and company in the foreign market. There are issues that need to be taken into consideration in order to achieve success. The top priority should be sales presence. It must be considered whether selling will be done directly or over the internet and whether there are benefits from local partners. The company will act as a distributor at the national level. It will require sales agents in order to operate at the local level. It cannot be automatic to introduce the product in the new market and expect returns immediately. There is no valid economic reason to squeeze the product in the new market in the presence of the same commodity (Kotler and Keller 36). The products must be refined, adapted, altered, tailored, acclimatized and fashionable in the particular market. Products are more flexible than people. The legal obligation ought not to be forgotten. Different countries have different legal obligations in the form of policies and trade regulations. Issues of HM Revenue, value added taxes and Customs Zero-rate policy will be given priority. Export licenses from Japan will be acquired. The company will be conversant with the national laws in order to avoid legal mix-ups. Documents required for import should be checked to review their applicability in the importing country. Shipping and commercial invoice documents, as well as certificate of origin, should be obtained. Once the logistics for exportation are in place, planning commences. This must be done with a lot of caution in order to include every detail. After it, such products as motor vehicles, electronics, semiconductors and machinery will be well exported. These procedures and logistics will facilitate profitable business opportunities.

Making the Opportunity Work People have many motivations in going into business. Some come into business to satisfy their desire of being the boss; others come to work at their own time, while the third want to make more money. It is expected that more profits will be incurred than when work for someone else. There is no guarantee in the whole world that the business idea will work and be successful. The majority of businesses fail due to either lack of knowledge or ignorance. Nevertheless, the idea of engaging into the export business is brilliant and capable of generating profitability (Joshi 42). In order to make the exporting business work, proper planning will be essential. This will be done at the early stages before engaging in any transactions. This will work to save a lot of money, frustrations and time. In addition, planning will help identify the deficiencies in the business model. The planning will be done with logistics in order to ensure that there is care about all involved details. Businesses that fail have wrong planning, in fact. In addition, planning involves financial computations. It is vital to ensure that there are enough funds for the proposed business idea. This will be easily determined after the planning and construction of all activities, which will be carried throughout the business. Determination of money amount that will be used at every stage of operation will facilitate planning. In order to make the business idea work, there must be enough working capital required by the formulated budget during the planning. However, the costs estimated in the planning may go above or down as the business commences. Accountants, IT specialists and lawyers will be part of the business. Lawyers will provide with legal advice in relation to international trade laws, export and import policies and taxation policies. Accountants will ensure that the budget is accurate and that every cent is directed to its intended use. IT specialists will facilitate efficient and effective operations in the business. This will involve networking, technical advice and necessary interventions. Without these specialists, increased stress in the business will be present. It is necessary to hire the best practitioners and believe in them. There is no valid reason, why one should not trust key people in the business unless they show themselves in other way. It is human nature to relay on others while delegating duties. Therefore, a team of people in areas such as marketing, management, sales, law, accounting, etc. will be essential. In order to make the business successful, there will be a need to study the competition. Some will sell locally assembled cars, while others will sell cars imported from the west. Thus, their target customers as well as their growth curves must be taking into consideration. This will provide an understanding that will facilitate marketing of the business (Joshi 17). In addition, no man is separate. Information search is critical. This is done by identifying professionals, who are able to offer advice and consultation services. The information obtained from them will contribute to the process of market segmentation, promotion, advertisement development and customer relation services.

Recommendations As mentioned above in this discussion, Japan is the industrialized country. It is a leading global exporter and importer. This makes it a potential target for business practitioners, countries and individual entrepreneurs. This is another reason why this business should seize the opportunity to do business in Japan. Africa is a potential market with emerging entrepreneurs. It also has a potential market for products such as firsthand motor vehicles, electronics, semi-conductors and machinery among others. This business should focus and formulate ways for this market. Japanese products have high quality and long life guarantee. This is an advantage for the business, as customers will be satisfied. Their quality will outperform other products on the market and, thereby, exercise dominance. The export business should adhere to set polices of trade, export and import. It should also generate enough capital to start operations. This will avoid delays, when the process commences. Planning should be done comprehensively in order to avoid mistakes. Financial obligations must be presented clearly in order to facilitate budget management. The business should employ specialists in various fields of professionalism such as lawyers, accountants, IT specialists and business analysts. These will work to facilitate smooth running of the business by offering advice and making change in the case of necessity. Above all, practitioners should be employed to handle different sectors of the business. They include managers, marketers, service staff, mechanics, security personnel, etc. Once all these factors are considered, there is no doubt that the business will succeed. The idea will work and offer desired profitability. Growth will be tremendous, as the business opens branches throughout Africa. Business expansion also attracts new category of customers, who will ensure that the business is in existence at all costs.

Declaration

“ I warrant that this entire work, except as noted, is my own”

Maria Dillet ________________________ November 29, 2012

Works Cited

Bhagwati, James. Protectionism. Cambridge: The MIT Press, 1988. Print.
Dean, Meryll. “Japanese legal system: text, cases & materials.” Cavendish, 2002: 55–58.
Dick, Adam. Industrial Policy and Semiconductors: Missing the Target. Washington, D.C: AEI Press, 1995. Print.
Greaney, Turner. "Import Now! An Analysis of Market-share Voluntary Import Expansions.” Journal of International Economics 40.3 (1996): 149-163.
Joshi, Rakesh. International Marketing. New York: Oxford University Press, 2005. Print.
Kotler, Philip and Kevin Keller. Marketing Management. London: Pearson Education Limited, 2012. Print.
McCargo, Duncan. Contemporary Japan. New York: Palgrave Macmillan, 2000. Print.
Totman, Conrad. A History of Japan. Oxford: Blackwell, 2005. Print.

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Thursday, November 29,2012