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Doing Business in Japan

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Doing Business in Japan

Japanese Leading Brands Vs. US
Winning Japan Market MBA Iris 2012
Business with Japan

January 26, 2013

Overview
The Case Study
Only a half decade ago the portable computer-laptops industry had thrive with the variable sizes, multifunctions, different weight, thickness and colors, manufactured by different vendors. (DELL, HP, Sony, Samsung, LG, Asus ...)
Early 2007 when Apple introduced the first iPhone to the US market, there were already many kind of Smartphones in the market (HTC, Palm, Samsung..) but non of them created such a customer experience as the iPhone did. The iPhone became the ultimate portable office in the pocket of its owner. Sending and receiving emails and instant messages became easier, browsing content at the internet and navigation as well plenty application and capabilities. Everyone realized that the man with the iPhone will win – the iPhone became a big advantage for any business man. In addition, the leisure culture starts changing. The ease of browsing internet content with the iPhone anywhere, accessing Facebook and reading emails was significant. Playing gaming at you free time with the iPhone became an addiction to everyone.
Apple with great precision has read the map and introduces the first iPad on 2010 which became a game change in the portable PC industry. With a larger screen size, the iPad was the ultimate entertainment device at your leisure. Same as the iPhone, the iPad created superior customer experience and dominate the market on 2010-1.
In parallel, Google Android OS (operating system) tablets developed by Samsung, Motorola and other vendors Tablets (Blackberry) introduced to the market late 2010. Though Google Android OS was inferior Vs. Apple at the beginning, its competitive advantage was the creation of a free and open source code OS, open connectivity and plenty free applications.
Anyone could develop additional functionally in the OS level, develop new applications and functionality. The Android OS platform became the first choice for Apple detractors as well was adapted by the fake Smartphone/Tablets industry which holds over 25% of this market. (Chinese fake Smartphons) The Android OS development was accelerated due to the open source policy and nowadays holds over 70% of the Smartphones and Tablets market. Android phones and Tablets gaps Vs. Apple soon closed and now offers a fine customer experience, plenty of free applications and open connectivity. Google which was mainly focused on the SW side started developing their HW Nexus platform in a junction with Korean leaders: LG (Nexus-4) and Samsung (Nexus-S). As well with the Taiwanese leaders: Asus (Nexux-7), and with HTC (Nexus-One). What is at the stake for The Japanese Brands (Sony, Panasonic, NEC)
Two American giant corporations, Google & Apple dominate one of the biggest and fastest growing world markets with a junction with Korean, Taiwanese and Chinese producer - this might leave the Japanese out of the game. iPad & Nexus control 90% of the Japanese market which is well known for being loyal to Japanese products.

This domination of the US companies in Japan Tablet market, reminding us the domination of US on Japan oil before the 2’nd world war.
The Japanese attacks on Pearl Harbor were strongly influenced by: * The energy insecurity for Japan due to the US domination of Japan oil (~85%). * The silence embargo US impose on Japan. * The superiority US demonstrate in the relations with US.
Psychologically, a situation in which US giant dominate Japan is something Japanese are extra sensitive to and will do what is needed to unleash from. Thus, Japanese brands desire to get control on their internal huge market where almost every child and adult is going to own Tablet. This is true for the developed countries and the same for the middle-class and upper in the developing countries. It became clear to the Japanese brands that losing this market will not only result in stagnation, but might hurt their brands position in the long term internally but also externally to Japan. Japanese consumer electronics brands want to close the gaps Vs. their competition as well create a clear competitive advantage in their products. Competition is about killing your competition How competing with a giant as Apple Corp. with a superior customer experience? How competing with a giant as Google, Samsung or Asus which is dominating the tablets OS & HW markets? The starting point is creating a clear competitive advantage recognized by the customer(s). Sony is among the Worldwide Top 20 Semiconductor Sales Leaders and third-largest television manufacturer in the world, after Samsung Electronics and LG Electronics. Sony is ranked 87th on the 2012 list of Fortune Global 500. Panasonic is the world's fifth-largest television manufacturer and is among the world's 20 largest semiconductor vendors. NEC Semiconductors business unit was one of the worldwide top 20 semiconductor sales leaders and is a member of the Sumitomo Group. Cultures Clashes: Japan and the US had history of clashes, rivalry, and battles which eventually ended with an absolute defeat of Japan by the US. Since the atomic attack in Hiroshima and Nagasaki, Japan became one of the strongest economies in the world and dominate the US market in the Automobiles and Consumer electronics industries. Japan succeeded to transform their military competencies into economic strength and they were able to transform the military achievements into economic one. Losing their own market to US Corp. is a scenario they want to eliminate. Market Size: Japan has 127 Million people. Currently one out of 9 people own a Tablet. The estimation is that one out of 3 people will own a Tablet in the upcoming 5 years. Each Tablet maker can develop applications and services market internally in Japan. (Movies, Songs, ) Joining Forces to Defeat iPad & Nexus: It is clear that in order to defeat such a giant as iPad, it takes no less than gigantic force. Sony, Panasonic and NEC realized that in order to succeed in this mission, they need to join forces. iPad hold ~90% of the Japanese market, to win this market it takes a combined effort. Sony and Panasonic had joined ventures in the LEDs/LCDs, Sony and NEC had joined ventures in the Batteries industry, Panasonic and NEC have developed chips together etc. Those corporations are familiar to each other and collaborate from time to time. A joined venture is not strange for Japanese corporations, especially when the goal is push US products from Homeland is common. Competition * SWOT Analysis We can learn from the SWOT that the Japanese companies facing a big challenge. On one hand they have tough competitors, but on the other, they have competitive advantages as local distribution, sale and service. Customers all over the world have bad experience with the Apple and Google products availability on the shelves. There is a huge demand, and long waiting lists of both brands products. This is opportunity for Japanese brands, to be able to satisfy large demand efficiently. What are the competitive advantages for the Japanese brands? The Value Propositions and Value Discipline Best Product
Technological Innovation
Customer Intimacy
Best Price
Best Total Solution
Operational Excellence

iPad

Nexus

Xperia ???

In order for the Japanese brands to gain market share, they must identify a clear competitive advantage Vs. their competition. When examine how Google positioned its product line, we can see that they had chosen the strategy of best price and innovation while Apple positioned its product line toward Best Solution and product intimacy. A critical question for the Japanese brand would be their positioning. Panasonic choose to take the niche of Stainless Tablet that endures hard conditions. This could be a solution for military on one hand and for Kids as long as the price is fair. Sony developed a sexy model which is the thinnest. NEC came with the Satellite broadcasts and TV receiver which are desired by many customers. Looking into the SWOT analysis, we can see that the key for success is to develop Applications and Service dedicated for the Japanese population. Out of the 3 Japanese brands, NEC is the one that made the biggest step in creating a competitive advantage when took the direction of the Satellite Broadcasts and TV receiver – this differentiator will gain the attention of many consumers and may increase their market share. They provided also a hard drive option to allow the user to transfer prerecorded programs to the tablet and watch them anytime convenient. Sony will compete with iPad and Samsung on being Sexy and might end up with very limited success. Nexus 10.1 made by Samsung is powerful than Sony Xperia and its coming with the latest OS V4.2 while Sony has the V4.1 as mentioned in the SWOT weaknesses. (see Appendix 5 for details ) Panasonic endured and expensive tablet doesn’t seem to be a huge competitive advantage. Summary This interesting case provides a glance on the cultural, economical and psychological oppositions between competitors and hint on the complexity and depth of the relations between competitors. Japanese Electronic superpowers as Sony and Panasonic in which only a decade ago were dominating huge markers, are crashing in front of Apple and Google Tablets products lines. The US giant Corporations have read the map and took over the Operating systems, Application Markets, Internet Clouds and Services and by this created a game-change. Both Apple and Google using Korean and Chinese companies for the HW manufacturing, to emphasis that the HW that was the core business only a decade ago, are no more mission critical. This of course leaves Japan out of this game. The Japan and The US economies are fighting for their lives each one with his own reasons - US eager to reduce the deficit and maintain superiority and Japan want to be THE economic superpower and maintain its wealth). Both wanted to control the other side market, both want to export more and to import less. The militant action since the 2’nd world war transformed into economical rivalry – it is silent on the surface, but in deeper layers each Corporation fight for is own survival. The bright side is that both nations have free economies and their citizens can freely choose to buy whatever product they desire. As the American consumers are loyal to Toyota, Honda, Lexus, Suzuki & Mazda, the Japanese consumers are loyal to the iPad & Nexus. The ASHAI SHIMBUN article author naturally use the headline “3 electronics makers pitch new tablets to be iPad killers” To remind us that historical events, cultural clashes and economical rivalry are important consideration even when the product is innocent Tablet. Appendix - THE ASAHI SHIMBUN: 3 electronics makers pitch new tablets to be iPad killers Three major Japanese electronics manufacturers on Jan. 21 unveiled new tablet computers packed with selling points such as thinness, toughness and TV readiness to compete with popular foreign entries that dominate the domestic market. With their new models, Sony Mobile Communications Inc., Panasonic Corp. and NEC Corp. are taking aim at foreign tablets, such as the iPad of U.S.-based Apple Inc. and the Nexus 7 of Google Inc. in the United States, which control about 90 percent of the market in Japan. Sony Mobile plans to lure customers in the red-hot tablet market with the Xperia Tablet Z, which it is proclaiming the world’s thinnest 10.1-inch tablet. At only 6.9 millimeters thick and weighing only 495 grams, the Xperia Tablet Z is 25 percent thinner and lighter than the iPad, Sony said. The new Sony tablet is compatible with LTE, a standard for high-speed communication and will be released by NTT DoCoMo Inc. as early as March. Sony Mobile also plans to market a different model compatible with wireless local area network (WLAN) services, but prices are yet to be set for either model, company officials said. Panasonic is fighting the influx of foreign tablets with its Toughpad JT-B1, which can endure harsh environments and rugged use, as its name suggests. The company said its 7-inch Toughpad can endure a drop from a height of 150 centimeters, withstand temperatures between minus 10 degrees and 50 degrees, and be used even in dusty conditions and survive being submerged in strong currents. Panasonic said the Toughpad's resistance to vibrations is high enough to meet U.S. military standards. Expected to carry a price tag of around 90,000 yen ($1,004), the tablet will initially be targeted at corporate customers. NEC also announced the release of the Life Touch L TLX7W/ 1A, a 10.1-inch tablet bundled with a TV tuner for terrestrial and satellite broadcasts. Users can watch TV programs on a high-definition screen by connecting the tuner, the size of a compact dictionary, via cable to an antenna terminal. If a hard disk, which can be purchased separately, is connected to the tuner, users can transfer prerecorded programs to the tablet and watch them at their leisure, the company said. The new Life Touch tablet will be released Jan. 31 and carry a price tag of around 65,000 yen, NEC officials said.

Appendix: Sony Xperia Tablet Z Vs Google Nexus 10 Vs Apple iPad 4: Comparison The high-end tablet market has just got yet another strong competitor. The new device is from Sony, the maker of a range of quality Xperia phones. The Japan firm has officially unveiled a large 10.1-inch tablet called the Xperia Tablet Z. The device is set for Japan release this spring with Android 4.1 Jelly Bean. Indeed, the Xperia tablet is slated to be a stiff rival to the market’s top devices, for instance, Apple’s iPad 4 and Google’s Nexus 4. The iPad 4 and Nexus 10 are currently the top tablets of the market. The Apple tablet has been reigning over the industry since its original version. The Nexus 10 is one of the best large-screen Android tablets. Made by Samsung, it is an ideal Android tablet with a high-resolution display and dual core processor. There is a talk that Google may launch an upgrade to the device with a quad core CPU at the imminent MWC 2013. But, here we compare the Xperia Z with iPad 4 and Nexus 10. Display Screen: The Sony tablet is a large-screen device with a 10.1-inch 1920 x 1200p Reality display that makes use of the firm’s new Mobile BRAVIA Engine 2. Sporting a large display, it comes in the same category of iPad 4 and Nexus 10 that respectively tout 9.7-inch and 10.1-inch screens. The new generation Apple tablet has an LED-backlit IPS LCD with a resolution of 1536 x 2048 pixels at 264-ppi, while the Nexus 10 is the best tablet when it comes to screen resolution. It features a Super PLS TFT screen with a whopping 2560 x 1600 pixels at 299-ppi. Processor, Performance: Sony has integrated a powerful quad core CPU onboard its new tablet PC. It is a 1.5GHz Qualcomm APQ8064 processor, which is backed by 2GB of RAM. There is no info available about its GPU. The device embeds 32GB of internal memory. The Apple device, in the meantime, is up with a 1.4GHz dual core Apple A6X processor, 1GB of RAM and a quad core PowerVR SGX554MP4 graphical card. It is available in all three standard memory variants; 16GB, 32GB and 64GB. Meanwhile, Samsung has done a mistake by placing an underpowered dual core processor inside its high resolution Nexus 10. The company has used a 1.7GHz dual core Exynos 5250 Cortex-A15 processor. The device gets further power from 2GB of RAM and Mali-T604 GPU. As per recent rumors, the company is now to upgrade the tablet with a quad processor. The revamped Nexus 10 may be on display at the MWC 2013 in Barcelona. The device is currently available in 16GB and 32GB variants. Software: The Xperia Tablet Z is to come up with Android 4.1 Jelly Bean under the cover. It is upgradeable to the most recent Android 4.2, but the Google-owned Nexus 10 has received Android 4.2 out of the box. This firmware is only available on Google Nexus devices only. It may come to other devices on a later occasion only. The Apple tablet features the latest iOS 6, which was debuted on iPhone late last year. Camera: When it comes to rear camera on a tablet PC, there is a talk that it is almost worthless. It is because people don’t often tend to take images with the large slates. Because of this, many tech makers have started to either skip or demote camera on their tablets. But, Sony has included a full-fledged 8.1MP rear camera on its Tablet Z. It is when both iPad and Nexus 10 sport only 5MP rear cameras. There is no info available about the front camera of the device, however. Battery: Among the devices in discussion, the Xperia tablet has the least powerful battery. It packs a 6,000mAh battery, while Nexus 10 and iPad 4 respectively have 9,000mAh and 11,666 mAh batteries under the cover. Price: Xperia Tablet Z is yet to get its price tag. Sony is about to bring the device to market. Meanwhile, the base model of Nexus 10 is priced at just $399, while the base model of iPad 4 is priced at $499. http://en.wikipedia.org/wiki/Japan%E2%80%93United_States_relations

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...Environment and Risk The political environment is vital to monitor for any company planning to do business, especially in a foreign country. Political risks are associated with government actions which deny or restrict the right of an investor or owner. These actions include war, insurrection and political violence. They are also able to devalue the firm by creating legislation that can increase taxes and tariffs, seize their property or restrict use of his/her assets which would then reduce the value of the firm (Howell, 2014). 3.1 Political Environment and Risk in Japan Japans political environment is among the most stable in the world based upon the fact that the World Bank has ranked Japan in the top quartile in all areas of governance as can be seen in figure *INSERT FIGURE NUMBER*. Graph retrieved from Finance for Australian Exporters Graph retrieved from Finance for Australian Exporters Figure 1- Governance Indicators in Japan Sourced from Finance for Australian Exporters, 2015 Additionally, the World Bank has also rated Japan 29th out of 189 economies in ease of doing business. Australia has a major foreign trade incentive with Japan as the free trade agreement between Australia and Japan which came into effect in January 2015 allows 97% of Australian exports preferential treatment or duty free access into Japanese markets (Export Credit Agency, 2015). Japans stable political environment and Australia’s positive relationship positions the......

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North South University

... 1. What were the triggers of cultural change in Japan during the 1990s? How is cultural change starting to affect traditional values in Japan? The triggers to Japan changing culture came by way of the “new kids on the block” thinking and becoming more focused on individualism than collectivism. Those participating in the new Japan no longer believe in the  Japan is moving towards more individualism than collectivism after the economic bubble. Nonetheless, this is a good opportunity for Japan to adapt to the globalization world and be more competitive. The cultural change will lead to greater mobility of employees, which means people will move around jobs more than before 1.What were triggers of culture change in Japan during the 1990s? how is cultural change starting to affect traditional values in Japan? Cultural change in Japan was triggered by the economic recession in the 1990’s. Traditional Confucian values focused on loyalty, high moral and ethical values and set the pathway for relationships with others in traditional Japanese businesses. When the generation born after 1964 lacked the same commitment to traditional Japanese value as their parents but they grew up in a world that was richer, where western ideas were beginning to make themselves felt, and where the possibilities seemed greater. They did not want to be tied to a company for life, they become a salary man. Traditional ways of doing business and perceptions of the loyal, hard-working......

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