Group 5E ANH2 Cttttcnhk 59 Final GIAP PDF

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FOREIGN TRADE UNIVERSITYFINANCE AND BANKING---------***--------“GOING INTERNATIONAL” ANALYSISPROJECTTarget Market: JapanAmeii Joint Stock CompanyProduct name: LycheeGroup member:Nguyen Ha AnVu Khanh ChiPhan Huyen DieuHoang Manh HungLa Thi Thuy LinhNguyen Minh TamHanoi, March 2021No. Name Student ID ...

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FOREIGN TRADE UNIVERSITY FINANCE AND BANKING ---------***--------

“GOING INTERNATIONAL” ANALYSIS PROJECT Target Market: Japan Ameii Joint Stock Company Product name: Lychee Group member: Nguyen Ha An Vu Khanh Chi Phan Huyen Dieu Hoang Manh Hung La Thi Thuy Linh Nguyen Minh Tam Hanoi, March 2021

No.

Name

Student ID

In charge of

01

Nguyễn Hà An (group coordinator)

2012380003 Part Two. Section IV. Market Potential Conclusion Introduction Recommendations

02

Vũ Khánh Chi

2012380011 Part Two.Section II. Political and Legal Analysis A. Political ideology B. Political risk C. Legal system

03

Phan Huyền Diệu

2013380007 Part Two. Section III. Economic Analysis A. Economic System B. Economic development

04

Lã Thị Thùy Linh

2012380020 Part Two. Section II. Political and Legal Analysis D. International relations Section III. Economic Analysis C. Financial markets D. Infrastructural forces

05

Nguyễn Minh Tâm

2012380034 Part Two. Section I: Country Overview A. Factual Data B. Background

06

Hoàng Mạnh Hùng

2011380203 Part One: Executive Summary

1

INTRODUCTION In the 70 years of the Trade industry’s formation, along with the historical milestones of the country, Vietnam's import and export activities have experienced significant changes, thereby becoming an important driving force for the growth of Vietnamese economy. Thus, a business analysis is of tremendous need for a company before carrying out any activities. The main purpose of this “Going International” Analysis Project is to give Ameii a general look into Japanese economy as well as an insight into its potential of being an ideal destination for Vietnamese fruit export. Given the detailed analysis, we can propose a direction for the product exported and further recommendations to enhance the efficiency in the operation of the project. Lychee, a famous traditional fruit, was chosen for evaluation about whether it stands the possibility of exporting to Japan or not. The intention of choosing lychee is to popularize this fruit and label Vietnamese fruit as a universal name, thereby opening up more chances for other Vietnamese fruits. Bear this in mind, the study is carried out in quantitative methods by data gathered from the official statistical sources. After the project, apart from the wide range of knowledge that each team member gained when studying Japan and its economy, skills such as analyzing, compiling and summarizing are expected to improve and one can become more familiar with any business analysis project in the future. RECOMMENDATIONS After the the project, with all things considered, Ameii is expected to export lychee right away. However, before the lychee export, there are a few points that might be recommended. First and foremost, researching markets and keeping up with recent trends as well as predicting them might improve the position of Vietnamese exporting companies and their market shares on Japanese market. Second, Japan is also a nation of quality standards with meticulous consumers, so Ameii Joint Stock Company should take into consideration the quality of fresh lychee before exporting, among which the packaging should be appropriate to Japanese traditions and lifestyle. Third, Ameii company can seek for Japanese partners, promoting and altering the supplying mode, creating an image in Japan, particularly the Vietnamese fresh fruits. Last but not least, with the view to turn Vietnamese fruit into one of the forefront exported products not only to Japan but also on an international scale, governments might provide much advocacy, manage both production and exporting in macro-sale. 2

PART ONE: EXECUTIVE SUMMARY Ameii Vietnam Joint Stock Company is one of the leading Vietnamese brands in the field of exporting specialty agricultural products and organic vegetables. Its product lines is divided into 3 main categories which are spice, nutritious seeds, organic vegetables and fresh fruit. Ameii’s customers come from many countries around the world, such as USA, France, Russia, England, New Zealand, Canada, Korea, Japan, China, Middle East, etc. Japan becomes the targeted market in this project since it has been known for being one of the three biggest importers of Vietnamese fruits and vegetables under the enforcement of ASEAN – Japan Comprehensive Economic Partnership Agreement that partly eliminated the tariff barriers. The scaling of factors analysis is separated into 4 big sections and various subheadings within each: Section I: Country Overview A. Factual Data 1. Geographic Location 2. Neighboring countries 3. Population 4. Natural resources 5. Main industries and locations within country B. Background 1. Historical Development 2. Histories of Key Industries Section II: Political and Legal Analysis A. Political ideology 1. Wide vs. narrow participation 2. Democracy vs. Totalitarianism B. Political Risk 1. Level of political risk 2. Sources of political risk 3. Main types of political risk 3

4. How to adapt to the political risk C. Legal System 1. Common law, civil law, or theocratic law 2. Similarity of home and host nations’ legal systems 3. Incidence of intellectual property violations 4. National enforcement of property rights (patents, trademarks, and copyrights) 5. Presence of products safety and liability laws 6. Taxation D. International Relations 1. General relations with other countries (key allies/adversaries) 2. Multilateral agreements with other nations Section III: Economic Analysis A. Economic system 1. Type of system (centrally planned, mixed, or market) 2. Fiscal and monetary policies B. Economic development 1. GDP and GDP per capita 2. Level of human development 3. Country classification (developed, newly industrialized, or developing) 4. Macroeconomic indicators (unemployment, inflation, etc.) C. Financial markets 1. Exchange rates with key currencies and recent trends D. Infrastructural forces 1. Transportation (logistics): 2. Communications (internet connections/speed, mobile phone penetration/costs) Section IV: Market Potential A. Identify basic appeal of Japanese market: People and Culture 1. Japanese culture 2. Suitability of climate 3. Japanese people as consumers 4

B. Data about Vietnamese goods export to Japan C. Competitor analysis Monitoring closely, our group suggests that it is possible for the company to export lychee now. More detailed analysis that lead to this decision will be provided consecutively in Part Two.

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PART TWO: FACTORS FOR ANALYSIS (8-14 pages) Section I. Country Overview (no more than 1 page) A.

Factual data 1.

Geographic location

Japan is an island country in East Asia. Part of the Ring of Fire, Japan spans an archipelago of 6852 islands covering 377,975 km2 (nationsonline.org, 2021). 2.

Neighboring countries

Japan has no land border. The neighboring countries and territories in the sea of Japan are Russia, North Korea, and South Korea; in the East Sea are China and Taiwan; further South are the Philippines and the Northern Mariana Islands. 3.

Population

The current population of Japan is 126,199,941 (Worldometer, 2021) 4.

Natural resources

Japan has negligible mineral resources such as iron and copper. With virtually no natural energy resources, Japan is the world's largest importer of coal and liquified natural gas and the second largest importer of oil. (cia.gov, 2021) 5.

Main industries and locations within country

Agriculture in Japan plays a significant role and contributes approximately 1.4% of the national GDP. Japan has the highest level of crop output per unit area in the world and a total agricultural self-sufficiency ratio of approximately 50%. The manufacturing industry in Japan is diversified with advanced and exceedingly successful industries including semiconductors, consumer electronics, optical fibers, automobile manufacturing, and optical media among others. The country is also a leader in the biochemistry and fermentation process in the food industry. 6

Major services of Japan include banking, insurance, retailing, transportation and telecommunications. The service sector accounts for approximately 70% of Japan's GDP and 75% of employment, so developments in this sector have a large impact on Japan's economy as a whole. B.

Background 1.

Historical development

In the 8th century, Japan became unified into a strong state ruled by an emperor. This started Japan's Heian period where much of today's distinct Japanese culture emerged including art, literature, poetry, and music. In the 10th and 11th centuries Japan entered into a feudal era. Japan was once again unified in 1590 under Toyotomi Hideyoshi. During the 1500s the Portuguese arrived in Japan. Japan would remain closed to foreigners for over 200 years. In 1854, Commodore Matthew Perry of the United States forced Japan to reopen relations with the rest of the world. Japan became an empire ruled by an emperor. In World War II Japan allied with the Axis Powers of Germany and Italy. On December 7, 1941 Japan attacked the United States bombing Pearl Harbor in Hawaii. Japan surrendered in 1945 when the US dropped atomic bombs on the cities of Hiroshima and Nagasaki. In 1947 Japan adopted a constitution with a democratic government. Since then Japan has grown into a powerful nation with one of the world's largest economies. 2.

Histories of key industries

Rice is the main crop in Japan. It has been cultivated for more than 3,000 years in Japan. Japan usually produces a surplus of rice. Even so rice production across Japan has fallen 20 percent over the past decade. There are 1.8 million rice-growing households in Japan. (Hays, 2021) Japan achieved sustained growth in per capita income between the 1880s and 1970 through industrialization. Moving along an income growth trajectory through expansion of manufacturing is hardly unique. Section II. Political and Legal Analysis 7

A.

Political ideology 1.

Wide vs. narrow participation

Surveys on political participation conducted in Japan mostly show that the “average” Japanese does not get involved in politics. Although they take part in some political acts, for example, voting and attending political rallies, Japanese people largely do not consider these as political participation. In terms of elections, one trend noticed in Japanese voters is that they mostly focused on broad terms about social issues, for example, “someone who cares about Japan’s future”. This really exemplifies the trend of Japanese’s group consciousness, even in political participation. 2.

Democracy vs. totalitarianism

Since its beginning, Japan has been a stunted democracy, except for the time of Taisho democracy in the 1910s and 20s. As Japanese did not fight for their democracy, the country operated almost as a one-party state for much of the postwar era. The right-wing Liberal Democratic Party (LDP) holds the nominal power, but the real political power is exercised by the “iron triangle” of bureaucrats, businessmen and politicians. There are some factors that weakened Japan’s democracy:  Japan has reverted to a one-party state dominated by the LDP.  Japan has a restricted media. The “kisha clubs” run by each government ministry fosters an unhealthy relationship between journalists and government officials.  “Japan Inc'' (iron triangle) is still alive and strong, not only for the nuclear industry but also the annual whales hunt.  The undue voices of the elderly on policy in Japan make it become a “silver democracy”. B.

Political risk 1.

Level of political risk

Japan has very high short-term and long-term political risk index scores (Political Risk Map, 2020). This reflects the dominance of the Liberal Democratic Party (LDP) over six decades, low 8

unemployment, and a very homogenous society. Consequently, it will be politically safe to export to Japan. 2.

Sources of political risk

 Corruption: In its long history, Japan has experienced serious cases of political corruption. Recently, a senior government official with close ties to Prime Minister Yoshihide Suga resigned after being reprimanded for dining with other officials and companies they oversee. This shows that political corruption in Japan continues to be the case, despite Japanese anti-corruption legislation.  Ethnic conflict: In summary, Japanese people make up 98.1%, Chinese 0.5%, Korean 0.4%, and other 1% (includes Filipino, Vietnamese, and Brazilian) of people living in Japan, according to the CIA World Handbook. In a special report of the United Nations in 2005, it was stated that Japan had a serious racism and xenophobia problem, which had been insufficiently recognized by the government. Today, foreigners from other Asian countries, mostly Koreans and Chinese, are still facing ethnic conflict problems due to the rising political tensions between Japan and their home countries. 3.

Main types of political risk

 Rising geopolitical tensions between Japan and China The relationship between Japan and China has become more strained after disputes over maritime sovereignty. Currently, Japan is concerned about China's actions to increase tensions in the East China Sea. According to the Japan Maritime Security Forces, after China allowed the use of weapons against foreign ships, the number of times Chinese service ships entered the Senkaku area / Diaoyu also increased rapidly. Accordingly, Chinese service ships not only approach fishing ships but also chase Japanese ships.  Political violence

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In Japan, there is a political extreme, although it presents no serious threat to the government. However, the public and the government seem to have tolerated some form of public disorder, including demonstrations, though often follow pre-established formats, interrupted traffic and scuffle between police and protesters sometimes. Frequent clashes have injured the participants. Besides, there are other political risks for foreign investors in Japan, including commodity-price volatility and separatist movements. 4.

How to adapt to the political risk

- Research on the current political risks in Japan, make a risk assessment and act on it. - Increase the company’s independence by taking control over technology and administration. - Politically neutral: do not engage in political disputes. A company should make it clear that its concern is natural economics, not political business. - Learn about the Japanese social concerns (e.g. environment) and take part in solving the problems to maintain a good cooperation with the citizens. C.

Legal system 1.

Common law, civil law, or theocratic law

In the development of the Japanese legal system, there are two Europeanizations, the first from 1868 to 1926 by the countries with the Civil Law system, and the second from 1945 by countries with the Common Law system. That is probably why it is said that “The Japanese legal system is a mixture of the Civil Law system, the Common Law System and the traditional law.” The Civil Law system of European countries, mostly Germany and France, has become a model for the Japanese legal system since the first Europeanization and its effects last until now. However, since World War II, the characteristics of the Common Law system are clearly reflected in the Japanese legal system through the regulations on the rights and obligations of workers, criminal proceedings and the court system. Beside modern law, the Japanese legal system still retains the elements of traditional law, which is reflected in the marriage and family institutions, inheritance institutions and in the dispute resolution. 2.

Similarity of home and host nations’ legal systems 10

Many current laws of Vietnam have the participation, support and contribution of Japanese experts, demonstrating the similarity in law between the two countries. In recent years, Japan’s support has been reflected in specific results through the promulgation of many legal documents such as: Civil Code, Civil Procedure Code and Civilian law enforcement. Consequently, Vietnam and Japan share many favorable similarities for cooperation in many fields, including import and export. This gives Ameii a better opportunity to export lychees to Japan. 3.

Incidence of intellectual property violations

Japan is known as one of the leading developed economies in the world. Along with that, the system of protection and enforcement of intellectual property rights in this country is considered to be highly effective and reliable, thanks to the proliferation of new IT tools and technologies. Consequently, Japan has a low rate of intellectual property violations compared to most Asian countries. 4.

National enforcement of property rights (patents, trademarks, and copyrights)

 Patents: Japan has a two-level patent system: The Patent Act, which includes exclusive rights to inventions; and The Utility Models Act, which includes exclusive rights to the equipment related to the device's shape, their structure, or combination thereof.  Trademarks: Any mark used in connection with goods or services for commercial purpose is registered and protected under the Trademarks Act. If unregistered trademarks are widely recognized or known, they may be protected under the Unfair Competition Prevention Act and / or the Civil Code.  Copyrights: According to the Copyright Act, copyright automatically arises upon creation of a work which belongs to literary, academic, artistic or musical domain. 5.

Presence of product safety and liability laws

There are some regulations for food to be exported in Japan: - Regulations on food safety and hygiene: Only after food products are tested for safety and hygiene and there are no problems with food safety detected can goods be cleared.

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- Regulations on food additives: Unacceptable additives, including artificial and natural substances, are banned from use in Japan. - Regulations on agricultural chemical residues: agricultural products and foodstuffs will be checked for chemical residues and veterinary drugs. - Regulations on food packaging: For food packaging, Japan has very specific regulations on technical standards for each material. - Regulations on labels: Food labels must be printed in Japanese and comply with the laws and regulations of the Japanese authorities. 6.

Taxation

In Japan, all business activities must pay corporate tax. The tax is calculated on the individual's total income and the type of business of the company. There are many types of corporate taxes in Japan. Small and medium companies will have to pay a lower tax rate. In addition, Japan also taxes business based on the total revenue of the business, business size as well as the policy of each locality. Regarding import goods, goods imported into Japan are subject to customs duty and consumption tax. In addition to consumption tax, a number of other domestic taxes (alcohol, tobacco, etc.) are also imposed on taxable imported goods. D. International relations 1.

General relations with other countries (key allies/adversaries)

 With Korea and USA: Japan and South Korea are making efforts to warm up the relationship that has deteriorated over the past few years. On January 20th, 2020, in his speech in the National Assembly, Japanese Prime Minister declared, Korea is the most important neighbor and the two countries share strategic values. This shows that Tokyo is ready to join Seoul in settling the argument towards a new phase in the bilateral relationship. 12

Meanwhile, the Japan-...