LIZ EARLE ENTERS THE JAPANESE MARKET

International Management and Globalization

Erina JonesOlivia AbramsDaniel KingDebora FusariLudivine PierreHelene Walpot

“High performance, quality and safe ingredients are our priority.”

NO ANIMAL TESTING OR INGREDIENTS

NO GENETICALLY ENGINEERED INGREDIENTS

ATTENTION TO THE ENVIRONMENT

PLANTS OIL AND EXTRACTS

RESPONSIBLE SOURCING

VITAMIN E

THE BUSINESS PLAN

Short Term:

Export products to the Japanese market

Manufacture in England

Concentrate on establishing local relationships and networks

Long Term:

Once experienced and knowledgeable about business in Japan, create a joint venture

WHY JAPAN? 1. Strong economy

2. International relations

3. Lucrative skincare market (Aging population)

EU

USA

China

Japan

Germany

France

United Kingdom

Japan $5,458,797

UK$2,250,209

World Economies Listed by IMF ranked by GDP (million US$)

WHY JAPAN?Plus Three

Skincare Products account for roughly 43% in the cosmetics industry

Japan’s aging population is forecasted to grow in years to come

The ageing population of Japan outweighs all other nations with the highest proportion of elderly citizens, 21% over the age of 65

WHY JAPAN?

Lucrative market

COSMETICS REGULATIONS IN JAPAN

The Pharmaceutical Affairs Act:

Primary Distributors license

Label product in Japanese

List ingredients in Japanese

Make clear any health risks or possible allergic reactions

CULTURE and THEORY Vital to understand culture of foreign country

o Gain respecto Be seen as professionalo Communicate effectively

Geert Hofstedeo Cultural Dimensions

Hallo Contexto Communication

JAPANESE CULTUREHIGH UNCERTAINTY AVOIDANCEJapanese people don’t like taking risk and they prefer to build long term relationship before doing business

HIGH POWER DISTANCEHierarchy is very important and respected

MASCULINITYLarge distinction in the role expectations of men and women

COLLECTIVISMOrganization’s needs come before personal needs and loyalty is higly valued

HOFSTEDE

HIGH UNCERTAINTY AVOIDANCE

• Important to build long-term relationships

• Personal contact to arrange first meeings

• Bring a small souvenif of your own counry or company

HOFSTEDE

HIGH POWER DISTANCE

• The seating arangement is determined by status of employee

• Use proper titles when addressing people as this establishes their position

• Handshake combined with a slight nod of the head

MASCULINITY

• Role of men and wmoen are distinct• Traditional• Conservative

COLLECTIVISTIC

• Organisations needs come before individual needs

• Loyalty to the company is highly valued

Cross cultural communications Verbal style

Direct vs INDIRECTMessage delivered in an implicit manner

SUCCINT vs ElaborateSilence is a virtue

CONTEXTUAL vs PersonalNeed to focus on the speaker and long relationship

AFFECTIVE vs InstrumentalFocus on the process instead on the goal and very receiver focused language

JAPANESE CULTURE

HALL AND HALL

HALL AND HALL

INDIRECT STYLE• Implicit• Punctuality is fundamental• Hire an interpreter• Double sided business cards in both

Japanese and English

AFFECTIVE STYLE• Focused on process instead of goal• Receiver focused language

CONTEXTUAL STYLE• Strong focus on the role relationships

of parties• Heiarchical position and role

SUCCINCT STYLE• Silence is considered a virtue• Reflection taking place

“When my Japanese friend’s dad died, it was my first funeral in Japan. In Ireland, when someone dies, you say to the bereaved person “I am sorry for your troubles.” In Japanese, you say “go shuushodegozaimasu”. On the train on the way to the funeral, I practiced this phrase a million times and had it down perfect. At the funeral, I walked up to the shrine where you express your sympathies and prayed. I then express my condolensces to the widow, and said perfectly “go shuushodegozaimasu”. All was good. But my friend, another Irish man from Cork, hadn’t practiced this phrase at all. When it was time for him to show his grief, he said to the widow “Moshiwakearimasen”, which is close to saying “I am sorry for your troubles”, but when directly translated, actually means, “I am sorry for killing him.” Despite the sad occasion, the place cracked up into hysterical laughter.”

David Jones, Irish employee in Tokyo

ENTERING JAPAN

Japan External Trade Organisation‘3 Main Windows of Opportunity’

1. Innovation Hubo Japan is a leading centre for innovation

2. Business Platformo Japan plays an important role as a

“bridge nation”

3. Trend Settero Japan can be though of as a test market

before fully committing operations to Asian markets

PRODUCTS IN JAPAN

The brand name Liz Earle will be kept, and the packaging will emit image of good quality and luxury

The price will be set high to reflect good quality

Product

Urban consumers as they are more willing to buy foreign products

Target Audience

Price

• Cosmetics specialty stores.• Department stores• Online shopping

Outlets

JOINT VENTURE: OPPORTUNITIES AND RISKS

Problems will arise if… Lack of planning Lack of clear objectives Poor communication Poor integration and co-operation of

different cultures and management styles

Benefits: Grow faster Greater productivity Greater profits Access to new markets and distribution

networks Increased capacity Sharing of risks and costs Access to greater resources

RECOMMENDATIONShort Term (first year):

1. Export skincare products to Japano Through local Japanese distributors

2. Manufacture in the UKo To ensure best quality products

3. Develop close relationships with suppliers, manufacturers, distributors and customers

o To prepare for joint venture

Long Term:

1. Create a joint venture in Japan2. Manufacture in Japan

Thank you for listening and we

welcome any questions!

REFERENCES

(1) Luthans, F. & Doh, J. International Management: Culture, Strategy, and Behaviour (2008)

(2) Mead, R. International management: cross-cultural dimensions (2005)

(3) Schneider, S.C. & Barsoux, J.-L. Managing Across Cultures, Harlow: Prentice Hall (1997)

(4) www.lizearlle.com (Liz Earle homepage)

(5) www.venturejapan.com (Venture Japan company)

(6) www.jetro.go.jp (Japan External Trade Organization)

(7) http://www.beautyworldjapan.com/en/east/first.html (Japan Beauty and Spa Industry)