January 10th, 2018
Business analysis for expansion to Japan| selling Ice-cream in Japan
Organizations expand to global markets due to a number of reasons. When domestic markets become saturated, for example, firms are forced to explore new markets to foster growth and ensure survival. The potential demand derived from entering a new market may thus be arguably the primary reason for expanding to global markets. Internationalization may however be a means of improving a firm’s economies of scale, or simply a response to a competitor’s expansion to such markets. In the latter case the expansion is aimed to curtail the market share of competitor(s) in the new market and reduce or eliminate the comparative advantage the competitor would have otherwise gained from lone operation in these markets. Despite the varying reasons, the entry to newer markets is not a simple process since it is characterized by a number of challenges. Lack of distribution or other sales and marketing infrastructure, little or no market knowledge, legal and political conditions, and socio-economic factors might exemplify the challenges organizations aiming for global markets might face. These challenges and other risks necessitate a prior analysis of the intended market in order to make informed choices of entry modes, timing of entry and institutional policies best for the proposed venture.
An important process in expanding to the international markets is analysis of country specific attributes that may differ in relation to the original market of operation. These would include culture, political and legal systems, economic and financial conditions, and product specific characteristics e.g. whether the firm’s product is perishable or not. This analysis helps in formulating better entry and sustenance strategies. This paper seeks to analyze the expansion of – Sorbet Delicacies (a hypothesized company) an American ice cream manufacturer into the Japanese market. The internal environment of the company relating to planning, leading, organizing, implementing and controlling functions and the external environment such as culture, political system, economic situation and competitive and social environment will be discussed. Available entry methods for Sorbet Delicacies and the best entry method will be discussed and the cost-benefit aspects to both the company and the foreign government delineated. go to part 2 here.