Christopher Ward is a British watchmaking company that was founded by Christopher Ward, Peter Ellis, and Mike France in the year 2004. This company sells directly to the customers without using any middlemen, and they sell their watches at relatively lower prices, and this is achieved by cutting costs of distribution and traditional marketing. This company wishes to expand its markets and company to Japan, and before it does so, it has to perform a proper analysis of the business environment of Japan both the internal and the external environment. This paper focuses on the assessment of the climate of the business that prevails in Japan and how this watch company will be affected by venturing and expanding its operation in Japan.
Assessment of the Business Environment Prevailing in Japan
Due to the dramatic growth that Japan faced after World War II, the industrialized market economy is free and is the third largest in the whole universe. However, this country has suffered a lot because of the global conditions of the economy that have been happening. The business culture of Japan is usually misperceived as a significant obstacle of beginning a business in Japan for several companies that think of getting into the market of Japan. Many foreign companies get afraid to start any business in Japan and those that do enter through a distributor (Alexander et al. 2016, pp.833). This is usually caused by the misconceptions and myths that the business culture of Japan is very risky. Japanese culture of the business is however not a barrier to the successful starting of a business in the country. Certain aspects of the business culture of Japan especially the long-term relationships that are very stable are as a result of the conservative sense of loyalty of the Japanese people to an external business that ventures into that country. The foreign companies that wish to venture into the Japanese market can benefit a lot if they have an idea of how to swim the business culture with the tides as opposed to the businesses that struggle in vain against the cultural side of Japan.
Foreign Direct Investment
Foreign Direct Investments are investments that are established by a firm in one country into other interests of businesses that are located in another state or other countries. Christopher Ward is a Foreign Direct Investment because it establishes operations in a foreign country (Arel-Bundock 2017,pp.430). For this case, the Christopher Ward organization will build its organization in another country that is foreign and include creating interest in controlling and ownership in Japan. Christopher Ward is known to sign in other countries selling their watches in different parts of the country, but it has not gotten into Japan. When it ventures its activities to Japan, it will be distinguished from other investors through purchases of equities of it being foreign-based.
Analysis of the General Business Environment in Japan
The business environment of Japan is brought usually benefit because of the firm rule of the judiciary that is independent and law. The commercial laws are usually applied consistently without any evidence of biases against any company from foreign countries. The priorities for policies and implementations are consistent, and despite the delays which typically occur in the reform of the labor markets, the application of procedures remains strong as compared to the previous administrations (Aulia, Djakman and Lusia 2018, pp.1636-1658). When Christopher Ward decides to expand its business to Japan, they will face particular challenges that affect the country as a whole such as, the high rates of taxes of Japan as compared to the regional neighbours that surround it, the business culture that many people perceive negatively, the cultural and linguistic barriers, and the burdensome regulations imposed by the government on various sectors of business.
When this watch industry from Britain ventures its business into Japan, it has to give a lot of importance to the political factors that will affect it when it expands its business into Japan. The managers of this company must come up with ways to know how the government policies of this country will affect the business. The political environment of Japan will affect this watch business in very many ways. It can add a factor of risk and lead to significant losses, and it can change the results. These factors are such as; taxes. The taxes charged on the company may increase or decrease depending on the policies of the government of Japan (Khan, Alam and Alam 2015, pp.955-961). Before the Ward company decides to move into Japan, the management should do an excellent analysis of the political environment of the host country and stay up to date with these political factors. They should know the political decisions that will affect the economic climate, the social-cultural environment, the rate at which new technologies emerge and the way these new business products will be accepted. Japan faces political instability from time to time, and this makes it a risky venture for Ward to expand its business to Japan. However, due to these political insecurities, Christopher's management should come up with ways that will mitigate these risks. These mitigation of risks are such as taking of risk insurances against politics. This will help to reduce its exposure to political discrepancies when they venture into Japan.
The economic factors of Japan will affect how Christopher Ward will do business in that country and how profitable it will be. The economic factors that will change this business include the interest rates, economic growth, rates of exchange, the disposable income of the consumers and inflation levels of the country (Khan, Alam and Alam 2015, pp.955-961). This business must break down these factors to micro-economical and macro-economical factors which will help to deal with the demand management in the new economy. These include the taxation policy, rate control of interest and the expenditure of government as the primary mechanisms they will use. The macroeconomic factors feature the way people spend the incomes they get.
The Christopher business should check into the areas that will involve the beliefs and attitudes shared between the new markets and populations in Japan. Such factors will include the growth of the people, age distribution, levels of income and career attitudes (Khan, Alam and Alam 2015, pp.955-961). These factors will help the management of Christopher business to learn the direct effects it will have to their customers in Japan and get to understand what their tastes are and what drives them.
Japan is a country with very high levels of technology. This affects the way business markets and sells their products, and so this watch organization will be no different (Khan, Alam and Alam 2015, pp.955-961). The technological factors that will affect this business will include coming up with new ways to produce these watches, create new ways of creating communications with their target markets and new ways to distribute their products to the target markets.
These factors are those that surround an organization, and the new organization to be in that country will have to analyze the environment that surrounds the organization. It is essential for Christopher Ward organization to check the situation that is going to enclose it in the new country (Khan, Alam and Alam 2015, pp.955-961). Many markets nowadays are advocating to buy products that are sourced in an ethical way and from a source that is sustainable. Ward as an organization should ensure that the products they produce little to no adverse effects on the environment and that their practices are suitable according to the Environmental Impact Assessments.
These factors include safety and health, opportunities that are equal, standards for advertising, consumer laws and rights, product safety and product labeling. Ward needs to know what is legal and what is not legal in Japan so that they can trade in a successful way (Khan, Alam and Alam 2015, pp.955-961). Because this organization will purchase globally, it will have to come up with ways to deal with the different countries where it will be exporting its watches to because every state has its own rules and regulations. It must also check the legal requirements that the state has set for any organization that wants to start a business in it to start.
Porter’s Five Forces
Porters five sources is a pure but potent tool that is used to understand how competitive business is and the competitiveness of the business environment and to identify the profitability potential of the strategies (Merrett and Walzer 2016, pp. 82-144). Christopher Ward should take good advantage of a position that is strong and improve the other one that is weak while avoiding steps in future that are wrong. These forces usually include,
This often looks at the strength and number of competitors and determining the number of rivals that will bring competition to the organization. Ward's management should evaluate the opponents they expect to get in Japan and understand the quality of the products they offer and how they differ from the products the organization is going to provide (Merrett and Walzer 2016, pp. 82-144). Specific strategies that the company can use to deal with this rivalry is to attract customers using price cuts that are aggressive and campaigns for high impact marketing to avoid customers buying the watches from elsewhere. On the other hand, if there are no competitive rivalries or they are minimal, this organization will have the strength and tremendous profits.
The organization must determine how easy it will be for the suppliers of raw materials to make an increase in their prices. Ward will have to analyze the potential suppliers they will expect to have, the uniqueness of the watches they produce in comparison with other observations produced by other companies and the expenses that the organization will face to switch from one supplier to other suppliers (Merrett and Walzer 2016, pp. 82-144). If the organization identifies several suppliers that they can choose from, it will be easier to switch to cheaper suppliers if need be, and thus the profits realized will increase.
The Power of the Buyer
Ward will have to research on their potential buyers and determine how easy it will be for those buyers to drive the prices up or down (Merrett and Walzer 2016, pp. 82-144). This organization will have to come up with ways to reduce the potential of buyers to switch from the watches produced by this organization to other products produced by rival companies.
The Threat of Substitution
This refers to the customers creating new ways to do what is done in this company. Because this organization produces high-quality watches that are expensive, the customers might come up with new ways to create these watches in different ways and stop buying them from Christopher Ward (Merrett and Walzer 2016, pp. 82-144). This comfortable and cheap alternative may weaken the position of this organization and threaten the profitability of this organization. Ward must create ways that will deal with this threat and make their products unique with specific customers to ensure that no substitution can come into the business to compete against it.
The Threat of New Entry
The position of this organization can be affected by the ability of people to enter this market. Christopher Ward should create strategies that create durable and strong barriers against entry and have good protection for the key technologies...
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