What are some difficulties that you could experience as a foreign company expanding into the Japanese market?

1.Business Law:

1. Consider whether the United States economy has benefited as the result of US participation in GATT and the WTO. Would the US economy benefit from restricting the importation of foreign goods? 150 word

2. Write a page essay on whether the globalization of the world’s economy resulting from the existence of the WTO has improved or worsened the lives of people throughout the world.

2.International Banking & Financial:

Foreign firms in India
Multinationals love India more than it loves them

The Economist

July 3, 2020

By looking inward, Narendra Modi is missing a huge opportunity

If you look at the headline figures, foreign companies still appear to be piling into India even as its economy reels from the pandemic. Since the country went into lockdown in March some $20bn of cross-border deals have been announced, with the likes of Facebook and kkr, a private-equity giant, sticking cash into digital firms, solar parks and more. Optimists argue that India could soon become a place to build factories, as firms seek to diversify their supply chains away from China.

Yet look closely, and a different picture emerges (see article). Foreign firms are often on the wrong end of regulatory changes. Investors increasingly prefer to take minority stakes alongside local tycoons, rather than set out on their own. And Narendra Modi, the prime minister, is veering towards a policy of capricious self-reliance. This week India banned 59 Chinese-made apps, including TikTok. Unless things change, India and the firms that invest there will not reach their potential.

India was largely closed to foreign firms between independence in 1947 and liberalisation in 1991—it even kicked out Coca-Cola. Since then it has opened up, tentatively at first, and after 2000 more confidently. Cumulatively, multinational firms have invested over $500bn and some have won control of critically important assets. Vodafone took a majority stake in a big mobile network in 2007. The biggest carmaker is run by Suzuki, a Japanese firm. When Mr Modi was elected in 2014, he pledged to make India even more hospitable and to attract more factories. On paper the Sino-American trade war should make it easier to turn India into a global production hub.

How has Mr Modi done? Officials boast that India has moved swiftly up the “ease of doing business” rankings, from 142nd place in 2014 to 63rd place last year. But the reality is less impressive. India’s share of global foreign direct investment (fdi) flows has nudged up only slightly, from 2.5% in 2014 to 3.3% last year. Meanwhile, some troubling problems fester.

Foreign firms don’t always get fair treatment. True, some that have been active in India for many decades, such as Unilever, are treated like locals. But more recent arrivals can get beaten up. Vodafone poured over $20bn into India but found itself subject to a big retroactive tax claim, unfavourable regulation and, most recently, spectrum levies (some local firms got clobbered, too). Amazon and Walmart, which together have also invested over $20bn, faced a sharp change in the e-commerce rules in 2019 that made it harder for them to own or control inventory.

Because the playing field is not level, foreign firms seem to be shifting from owning their own subsidiaries to taking passive stakes in well-connected local firms instead. Ford has folded its business into a joint-venture. Aéroports de Paris has taken a non-controlling stake in an infrastructure firm. A who’s who of world business has bought small stakes in Jio, a mobile-phone and e-commerce firm run by Mukesh Ambani, India’s richest man, which competes with Amazon, Walmart and Vodafone. Of all the $57bn of cross-border deals announced in the past 12 months, 66% involved passive stakes and half involved partnerships with a tiny number of Indian tycoons. The economy is becoming dominated by a few local winners. According to Marcellus, an investment firm, 70% of corporate profits are made by the top 20 firms, only one of them foreign, up from 14% 30 years ago.

With the economy forecast to shrink by 4.5% this year and firms prowling for alternatives to China, you may think that Mr Modi would open the door. But his policies have turned inward, mirroring the lurch to protectionism in the West. On May 12th he made a speech which said that India should take part in global supply chains but also mentioned “self-reliance” 17 times. As military tensions with China rise (see article), a new crackdown has begun. As well as banning the Chinese apps, the government is prodding e-commerce firms to have “country of origin” labelling on goods they sell. Foreign firms bring cash, know-how and competition. Once the pandemic passes, India must show that it is still open for business.?

This article appeared in the Leaders section of the print edition under the headline “Inside game”

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1. International Management:

Comprised of more than 3,000 islands, Japan is located off the eastern coast of mainland Asia. Japan’s total land mass is slightly less than that of California. The country is largely mountainous and contains very few natural resources. In fact, Japan is the largest importer of coal and liquefied natural gas in the world.67

Japan is among the densest large countries in the world. More than 90 percent of the country’s population, estimated at nearly 126 million in total, lives in urban areas. Approximately 37 million people live in Tokyo alone. Japan’s population is much older than many other countries, with close to 80 percent of its people at 25 years old or older and a median age of 47.7 years. The population is expected to continue to slowly decline in the foreseeable future.68

Japan’s 2018 GDP was estimated at US$5.167 trillion, making it the third largest economy in the world. Previously second to only the United States, the country’s flat and sometimes declining economic growth rate has allowed the fast-growing Chinese economy to overtake it in total size. Japan’s economy had been struggling since the 1980s to gain traction; however, growth has improved in just the last few years. High public debt, which in 2018 equaled more than 150 percent of its annual GDP, remains an ongoing challenge.69

Japan has a parliamentary government with a constitutional monarchy. Its legal system is largely based on the Western model with some elements of traditional Japanese culture. The country’s corporate culture is often criticized for the close business-government relationship that many large companies have, leading many outsiders to call the relationship “Japan, Inc.”70 This culture is very resistant to change and strives for stability, often leading to substantial losses. The Japanese government also has been criticized for blocking private-sector solutions to economic underperformance. For example, rather than allowing foreign investors to acquire failing or underperforming Japanese businesses, the government instead seeks to support those domestic businesses in the form of cash or loans.71

You Be the International Management Consultant

Once considered to the be world leader for consumer electronics, Japan’s tech industry has experienced years of slow sales. As a result, some of Japan’s biggest companies have restructured their product offerings and sold portions of their businesses to foreign competitors. The Sharp Corporation, known internationally for its televisions, appliances, and audiovisual equipment, was sold in its entirety to the Taiwan-based Foxconn in 2016, and Toshiba sold its computer business to Foxconn in 2018.

Hitachi has been especially active in consolidating its businesses. The company sold its semiconductor business, Hitachi Kokusai Electric Inc., to U.S.-based KKR in early 2018, and French company Faurecia purchased Hitachi’s car navigation business, Clarion, for US$700 million in late 2018. In 2019, Hitachi began searching for a buyer for its material manufacturing business, Hitachi Chemical, in an effort to refocus on new technology, like the “Internet of Things.” This major shift in focus, from electronic consumer products to technology, for Japan’s historic conglomerates is still in its infancy, and the future role of tech-based industries in Japan’s economy remains somewhat uncertain.

Questions

1.If you were a foreign investor, would you want to invest in a consumer electronics company in Japan?

2.Does the fact that many of these conglomerates are restructuring and refocusing on newer technology impact your decision?

3.What do you see as benefits to investing in Japan? 

What are some difficulties that you could experience as a foreign company expanding into the Japanese market?