project

INT 220 Business Brief Template Course Project

Section One: Drivers for Global Entry

Going global would afford the company many benefits including increased sales and revenues. Japan is a developed market and thus the purchasing power of the consumers is high, which implies that many consumers will be able to purchase our products. Expanding to Japan will enable increased profits that can be reinvested in research and development of new technology and innovation that will create a competitive advantage for both domestic and international market. In addition, entering the foreign market will help the business to tap into new market segment. According to International Data Corporation (IDC), Apple was the largest smartphone brand in 2020 in Japan with a 47.3 percent market share (Sudarshan, 2021). The data shows that Japan would be an ideal market for quality phone cell cases due to high purchase of smartphones. Therefore, the company will benefit from increased sales and profits.

Section Two: Market Profile

Cultural Profile

Category	United States	Japan
Commonly Spoken Languages	English	Japanese
Commonly Practiced Religions	Christianity	Shinto
Power Distance Index (PDI)	40	54
Individualism Versus Collectivism (IDV)	91	46
Masculinity Versus Femininity (MAS)	95	62
Uncertainty Avoidance Index (UAI)	92	46
Long-Term Orientation Versus Short-Term Normative Orientation (LTO)	88	26
Indulgence Versus Restraint (IVR)	42	68

Political and Economic Profile

Category	United States	Japan
Political System	Representative democracy	Constitutional monarchy
Current Leaders	Joseph Biden president	Fumio Kishida prime minister
Economic Classification	Developed	Developed
Economic Blocs Impacting Trade	World trade organization	World trade organization
Gross Domestic Product	23 trillion USD	4.9 trillion USD
Purchasing Power Parity	22,996.08	100.412
Gross Domestic Product Per Capita	69,287.54 USD	39,285.16 USD
Human Development Index	Very high 0.921	0.919
Human Poverty Index	$26,246 for a family of four	Poverty headcount ratio at $5.50 a day

In terms of economic development, both countries have developed economy, thus making them ideal for business. Consumers have high purchasing power which means that they are able to purchase new products. US has a higher GPD compared to Japan, however, this can be attributed to the size and population of U.S. compared to that of Japan. Furthermore, both countries are members of World Trade Organization, which means that their trade operations with other nations are regulated and subject to WTO regulations. The culture in Japan is hugely different then the culture in America. Americans are self-motivated while the Japanese culture embraces more of a group mentality and looks for approval from their superiors before making big decision. Both cultures work long hours and take very little breaks. For the most part Japanese culture is more formal in the work place then in the U.S.

Section Three: Market Considerations

Complete the table below to support your explanations using current exchange rates.

Exchange Rates

Category	The U.S. Dollar	Japan
Exchange Rate	1 USD	147.53 Japanese Yen

When entering a new market, it is important to consider exchange rates in order to make entry decisions. The exchange rate for the Japanese yen is 147.53 for 1 USD. This means that for every one USD exchanged, the company will receive 147.53 Japanese Yen. When doing business globally, it is imperative to consider the exchange rate in order to adjust prices accordingly to avoid losses associated with drop of currency against the other. In terms of management and logistics considerations, Japan is conservative, similar to the U.S. therefore, the company will hire local managers from Japan who understand the culture and the market well. Based on the individualism scale, Japan has more points lower than the U.S. indicating that workers prefer to work as team more than the US based employees. Therefore, management and human resource tactics should be tailored to meet the cultural needs of the foreign country

Entry mode

In regards to the entry mode, the company will use exporting entry mode where cell phone cases will be shipped from the U.S. to Japan based on the demand. However, once the company has established a large market share in Japan, it will start manufacturing plants in Japan to make cell phone cases from there. The disadvantage of exporting is that supply chain costs are high including storage, shipping and salaries of employees.

Legal and Regulatory Considerations

Being the third largest economy in the world, Japan has friendly foreign direct investment regulations that encourage foreign investors to invest in the country. However, in tune with the global action to tighten scrutiny for FDI, Japan made major changes to its FDI screening framework by amending the Foreign Exchange and Foreign Trade Act (FEFTA) in 2020. The act required acquisitions by foreign invested of listed companies doing business regarded as sensitive to national security to be lowered from 10 percent to 1 percent (Sekiguchi, et al., 2021). Also, Japan has a the comply or explain approach that requires foreign companies or investors to comply to its regulations of doing business in Japan.

References

Sudarshan. (2021). Apple was Japan’s largest smartphone brand in 2020 with a 47.3 market share. Retrieved from https://www.gizmochina.com/2021/02/25/japan-mobile-phone- smartphone-market-q4-2020-idc/

Sekiguchi, K. Higashi, Y. & Oyam, H. (2021). Doing business in Japan: Overview. https://uk.practicallaw.thomsonreuters.com/1-519- 3917?transitionType=Default&contextData=(sc.Default)&firstPage=true