Smith Industries Global Expansion Opportunities Paper Example

Paper Type:  Case study
Pages:  7
Wordcount:  1692 Words
Date:  2022-12-05


Smith Industries Global Expansion OpportunitiesHere at Smith Industries, we always look for new opportunities to take our business to the next level. Whether it be new products, or innovating the way we conduct business, maximizing our potential is something we strive for every day. We're never content with our success as we understand there is always more to achieve. While we have had immaculate success domestically in the United States, we have not yet operated on a global scale. To be the best company that we can possibly be, Smith Industries is going global. Global expansion will open us up to new sources of revenue, diversify our markets, and expand our brand recognition possibilities. The perks of global expansion don't come easy; there is plenty of risks involved. No business can say they know exactly what to expect when expanding globally. However, we can do our due diligence in understanding the business climates we will be entering. After much evaluation of potential expansion targets, Japan and Sweden are our most desirable targets. The research below will analyze the business landscapes of those countries, and how we will integrate Smith Industries onto the global scale.

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Located in the Pacific Ocean off the coast of China, Japan is often considered the stepping stone to Asia. Conducting business in Japan will allow us to operate and settle in the fastest growing G7 economy while giving us access to other Asian markets (Carnell, 2018). Outlined below are factors that will influence our business transactions, and how we will thrive in the Asian territory.

Business Structure

Japanese companies are well known for their hierarchically organized structures. Everybody knows what their role is and how they benefit the company. Employees are aware of who their superiors are and treat them with the utmost respect. Group orientation and team work are terms not used lightly, for it's a way of life in Japan that permeates into the Japanese business structure.

The Japanese business structure is also one "based on consensus and cooperation, rather than the top-down decision-making process which typifies western models of hierarchy" (Warburton, 2019), This will be an important implementation into our business structure as we want to ensure our Japanese partners feel involved. We'll be sure to include as many people as possible in the decision-making processes so that we can mimic the cooperation they're accustomed to. It will be of the utmost importance for Smith Industries to replicate these types of behaviors if we want to succeed with our Japanese business partners.

Ethics and Cultural Diversity

Ethics and Cultural diversity will play a major role in our potential expansion into Japan. Japan has the least amount of misconducts observed by employees in the world (Lipman, 2016). The major factor in determining workplace misconduct was how integrity was compromised under pressure. Lipman notes that even when there is pressure present, the Japanese people are unwilling to compromise their standards. They stand by their typical behavioral patterns and don't change those behaviors based on external factors.

Further observations from Lipman include the Japanese' low tendency to lie. While still present, lying was reported by 11% of employees in Japan, with the US being the next closest at 22%. More severe actions like bribery and hiding infractions were not observed, but very prevalent in other Asian countries like China. We will be expected to reciprocate the Japanese standard and reduce the amount of workplace misconduct internally. We do not want to get a reputation that would differ from the Japanese ethical standard as that would negatively impact our ability to conduct business.

Regarding the Japanese business culture, Japanese businesses are much more formal, which includes not calling people by their first name in the workplace and a much stricter dress code. Business cards are also extremely important to the Japanese, as it's considered rude to not give someone yours upon introduction. It's also important to note that respect for your superiors is an absolute must in Japan and often associated with one's age. We must ensure we show proper levels of respect when greeting our business partners to show our commitment to working with them.

Entry Strategy

To determine the most effective entry strategy, we must understand the political, legal, cultural, and economic landscapes of Japan.


Unlike many countries in Asia, Japan was never colonized by any Western power. Therefore, it has rather conservative political approaches that emphasized the people's traditional abilities and will. Moreover, as a democratic monarchy, the government adopts the will of the majority while protecting the interest of the minority by the rule of law.

With this knowledge, Smith Industries will enter the Japanese market ready to comply with all existing government requirements such as licensing, and tax compliance. Besides, we will ensure that the company adopts the traditional expectations of the market such that it does not only act in line with the will of the majority but also avoids infringing the rights of the minority.


Over the years, Japan has made many changes to its foreign direct investment (FDI) policies to liberalize the market to attract more foreign investment companies. However, the country still has lots of formal regulations and bureaucracies that complicate FDI entry into the market. Also, the manufacturing and technology industries have informal market entry barriers created by cartels that seek to make money from new foreign entrants under the guise of administrative guidance.

The company will engage a well-experienced attorney to guide how to take care of all the formal regulations at minimal cost. The management through our legal team will also cooperate with relevant government agencies in Japan to avoid the informal bottle-necks created by cartels to fleece new entrants in the market. Further, we will establish important linkages with distributors, and suppliers in advance to help overcome these barriers.


The business culture in Japan encourages conservative corporate ownership approaches that are most opposed to the acquisition which helps US multinationals to rapidly gain leverage in other countries. Instead, they prefer to enter 50-50 owned joint ventures with entrant FDI's to gain from their new technologies. However, with our strong technological position, we will negotiate for approval to set up and expand our wholly-owned manufacturing subsidiary.


Japan has a huge population of 125 million people. Therefore, it is a large market and one of the most important US business partners as well as competitor in the world. At the same time, it is a powerhouse for innovation that prides itself for several recent revolutions in global technology.

Smith Industries will begin mass production right from the onset to meet the huge demand in the new market. The market also provides a new challenge for us to invest more in technological innovation, research, and development to be able to compete favorably in the Japanese market.

The Role of Information Technology and the Internet

Japan has one of the most advanced IT network infrastructures in the world. The country's automobile industry is also a global leader in high-precision manufacturing. The existence of a progressive IT network infrastructure environment offers an important platform for the growth of innovation in the Internet of Things (IoT) responsible for combining IT and physical objects.

Our company will endeavor to take advantage of advanced IT and internet technology in Japan to come up with innovations. We look forward to full-scale adoption of not only IoT but also high-precision manufacturing in our production to increase profits.

Advantages and Disadvantages of Manufacturing in Japan and Material Location

One of the important requirements for the company is to establish both the advantages and disadvantages of manufacturing in Japan. The positive and negative production factors, coupled with the location of material in relation to the new market environment will determine both the cost of production and the value chain of our products in Japan.

For our company, the most important advantage of manufacturing in Japan is its population, which offers a large market for our goods. Also, Japan has huge companies that manufacture motor vehicles. These companies are a potential market for our steering wheels. Secondly, the existence of advanced Internet of Things and lean production technology will help the company save on the cost of labor. Thirdly, Japanese motor vehicle parts have a positive reputation in the global market. Also, entering the Japanese market exposes the companies unique competitive advantage to its key global competitors like Toyota, Mazda, Suzuki, and Nissan.

However, the disadvantage of establishing a manufacturing plant in Japan is high competition from larger motor vehicle manufacturers. The company also has to deal with the unfriendly culture of Japanese-owned companies which always try to avoid competition by complicating entry condition for new entrants. Lastly, the cost of production is relatively higher in Japan compared to other Asian countries like China, where the company would pay workers up to three times lower wages. Regarding material location, the company will have to obtain material both within Japan and the USA.

Our Approach to Marketing and Advertising

Since it is entering a new market, Smith Industries has to learn new marketing strategies that will work for it since marketing is directly connected to brand ownership. Some of the marketing and advertising strategies that are very effective in the United States may not work in Japan because great marketing content should demonstrate a good understanding of the content and communication methods that connect with the buyers.

Since the Japanese generally have high customer expectation, our marketing and advertising will have to make use of the strategies that work for the already established companies in the market. We have observed that one of the most important marketing approaches in Japan is storytelling. Most Japanese services and products create detail-oriented and authentic messages in marketing.

Our marketing campaign will use audio-visual advertisements on the internet and TV to demonstrate the quality of our products by show-casing well-selected materials and highly-advanced methods we use in making our products. We will also employ direct sale representative to market our steering wheels to motor vehicle manufacturers Japan. At the same time, we will give great attention to the design of our products to make them attractive to anyone that encounters them in the market.

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Smith Industries Global Expansion Opportunities Paper Example. (2022, Dec 05). Retrieved from

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