All About Doing Successful Business In Japan

Hello student. Welcome to this new course on learning to successfully do business with Japan. In the next video, Dr. Vijesh Jain will share his opening comments about this course. You are welcome to introduce yourself in the Q and A section of this course to the other students of this course. Wishing you great learning from this course.

You can download the complete course plan of this course given in the pdf file in the resources section of this lecture.

Hello, Friends, welcome to this very special course of the VJ Export-Import Mastery series of courses, which relates to doing business in and with Japan. Friends, if you're looking to work with Japan, if you want to understand how to do business in Japan, how to operate in Japan, and how to deal with Japan. And even if you do not have any immediate plans to do business in Japan, you want to anyway, understand the Japanese market. Or you want to work for a company that deals with Japan, and you want to acquire qualification, which indicates that you have comprehensive, complete knowledge about Japan. Friend, this course is a comprehensive guide that will tell you all about Japan's market, about the business, about the procedures, about the government approach, and how Japan is different from other countries.

What are the rules and regulations and even what are the basic facts about Japan, the culture, the people, the food, and Day-To-Day life and how to settle down in Japan, how much it cost to settle down in Japan? Everything. Everything, I will tell you about Japan, in this course, because it's my conviction that if you want to do business with Japan or in Japan, you need to know a lot about that particular country, about that market, about the people and all the merits and demerits, advantages and disadvantages, all the challenges and opportunities and strengths and weaknesses you need to know about that particular country. So my goal in this course is to tell you all these things which will make you very, very confident about Japan, Japan market.

What are the latest developments in Japan, the latest government policies, and whether it is a good idea to set up business in Japan or to trade with Japan? So before you plunge, you need to know everything about Japan and this course is going to do that. So I'm Dr. Vijesh Jain I am an international business professional, and I have spent more than 30 years of my work in international business trading with many, many countries, especially dealing with Japanese people, dealing with the Japan businesses, exports, as well as doing business within Japan. I have been part of certain start-ups in Japan. So I have visited this country many, many times. And Friend. I also have a complete series on Japan, on the travel in Japan, separately on my YouTube channel. So, Friend, I am an expert in this country. So in this course, I will be able to give you a very comprehensive and hard-to-find knowledge about the country, about its people, about the things which you normally do not get in these kinds of courses. So I will give you unknown facts, unknown tips, and techniques for dealing with Japanese people.

And the formula for a winning streak in Japan. So Friend, the very first question that comes to mind when doing this kind of course and before plunging into this kind of course, is why Japan? So Friend, the reason for trying to understand Japan and thinking of doing business with Japan is that this is one largely unexplored country. It is the only industrialized, highly industrialized country in the world, which is having just three to four percent of the total economy run by foreign investments. So there is a very deep lack of foreign investment in the country. This is because of many, many reasons, some are the reasons for the government approach, but many of the reasons, are the failure of overseas investors, to understand this country and the common mistakes that they generally make. And when they do, they fail and then they abandon this country.

So it is an opportunity and it is a challenge also because if the foreign investment is low, the government of Japan wants the investments coming from overseas investors. So there is a great scope of the possibility of successfully doing business with this country.

Answer only one that is right

In the next few videos, Dr. Jain shares his experience and researched facts about the unique market, in which Japan is. Also shared are the opportunities and challenges of operating in Japan. At the end of this section the first interpretation documentary, specially prepared for this course is provided for a better familiarization of Japan as an important country and with its lifestyle.

So, friend, before we go further in the course, let us discuss some of the main highlights of the country. Especially concerning the opportunities and challenges which are there in the Japanese market. The reason for sharing this at the very start of the course is to take off the course, in a very logical manner, so that you understand what are the opportunities, the challenges, and what are the common mistakes that foreign investors make because Japan is famous for high-level of failures by the overseas investors and entities. So these few highlights, which I'm going to share just now, will give a very good start to the course, and it will give the right direction of taking this course further and bringing the right topics, right knowledge, to the table so that you can get the maximum value out of this course. So Friend, first let us discuss that what are the different opportunities, that exist in the Japanese market because it remains a place to explore, investigate, to explore and to evaluate, and find the ways and means of benefiting from the existence of several opportunities, which are there in this country.

So, for instance, the Japanese market is sophisticated. It is a very well-known fact that it's a very unique, very different consumer market, where the consumers demand very high-quality consumer goods. So, Friend, this is very typical of the highly industrialized and sophisticated countries like Japan. Consumers are looking for high-quality goods, so they are willing to give the price and they have the money to pay. They have the purchasing power, which is very good. But they demand products which are very, very good quality, very durable, long-lasting products. And in Japan, there is a demand for hi-tech scientific technologies and technological products, engineering products. The reason for that is that with the kinds of products that are available from all over the world, they can themselves maintain the superiority of the manufactured products which are manufactured in Japan. So I will tell you more about it. I will tell you about the Japanese industry. What are the areas where the Japanese are doing great in the world? For example, 30 percent of the industrialized goods in the world, are manufactured in Japan.

Japan is the world leader in electronics and automobiles, even auto parts. So these things, I will talk to you more in detail, later in this course. But the demand for high technology, engineering, and robotic products is very, very high for the B2B sales and even for the B2C. Then Friend, Japan is committed to using the next level of clean energy, because of the nuclear plant disasters, which has happened in the country in the past. The Japanese government has gone away from nuclear energy and they are looking for new ways of meeting the energy demands, newer and cleaner ways of meeting the energy demands. There is a very high demand for energy professionals, energy companies, and innovators in the area of clean energy production. So people with that kind of knowledge, the companies with that kind of knowledge, companies which can provide such kind of products for the clean energy technologies, companies as well as the products manufacturers. So there is a high level of demand for such products and such technologies.

Then, there is a very high demand in Japan for the latest pharmaceutical and healthcare products for Japan's increasingly aging population, the population is aging. It is estimated that almost 20 percent of the Japanese population is over 60 years of age, and the life expectancy in Japan is the highest in the world, which is 85 years. So what has happened that due to the lower birth rate and the resistance to marriage among young people in Japan, what is happening that their population is declining and it is estimated that the Japanese population will decline to almost 100 million only, by 2050, from the current one of 135 million people in Japan. So these realities, these trends have forced the country to look for HIGH-QUALITY pharmaceutical and healthcare products for its aging population. And there is a very big demand for highly talented companies overseas, which can supply these healthcare products and pharmaceutical products. Or even if they want to set up business in Japan, they want to set up their distribution channels. They want to set up their healthcare production units in Japan.

They would be welcome in Japan. Now friends. of late, the Japanese government has become very, very open to foreign workers. The new legislation has been passed to protect the rights of the foreign workers in Japan, because of the dwindling population and the number of workforce, the labor in Japan. They are inviting foreign workers to Japan and these foreign workers are forming a great part of the Japanese society, and are looking for new food habits, who are looking for their own national food and drink products, and also the Japanese population, diversifying into new tastes for the food and drinks.

There is a very high demand at present for newer types of food and drinks, products for this new trend, new food habits, and new overseas immigrants. So this is a new type of opportunity which is emerged in recent years in Japan and the companies that are into food processing and in food processing and beverages can look for very good demand for their products and they can do big business with Japan in these areas, either within Japan or to sell the goods directly to Japan importers. And finally, Friend, there is a very big market in Japan for gaming and music products from all over the world. So I will go a little deeper into this aspect later in this course. I will tell you a little bit about a little bit deeper into Japanese society, and the societal behaviors because of which the gaming industry has become the largest gaming industry in the world and there is a good demand for music products because of certain peculiar features of the culture, the behavior of the people.

And this aspect I will discuss later in this course. And at this stage, you just take it from me like this, that there does exist a big market for computer games, the new types of music from all over the world, and people are willing to pay for such things. This aspect may look peculiar, but I will tell you more about this aspect in detail, and it will also help you to understand the Japan society and the people of Japan and the types of challenges internally which they are facing. So Friend, these forms some of the very important facts and opportunities in Japan.

So now we have discussed the different opportunities and the merits of the Japanese market, let us now discuss the dark side of the market, and the challenges which are there, which exist actually for all the markets in the world. But, yes, of course, the experience of the foreign investors is that Japan is a difficult market and the challenges are enormous. So later in this course, when I'll be discussing more deeper into the aspects of society, Japanese society, and the way the Japanese government works. It will be more clear to you what are the reasons for such challenges and how these challenges can be overcome. So, for instance, one of the biggest challenges of the Japanese market is that the customers in Japan are highly demanding.

They look for very high-quality products and the post services delivery requires meticulous planning in Japan and dealing with the customers can be very expensive in Japan. One of the major reasons and challenges that results from this peculiar nature of the Japanese customers who are very highly demanding, is that they have very distinct and different types of tastes and needs when compared with other rich countries, other industrialized nations, the culture of Japan is very, very different. The identity of the people is sort of isolated from the world. One of the reasons for this is their lack of knowledge of English. Only three to four percent of the Japanese people know and speak English. So they are largely isolated from what is happening in the world of the English language because the English language provides the best knowledge to the people of the world and what is happening in the world. So it is generally an experienced and debated point that the reasons for their distinct tastes and distinct needs and very preserved type of culture is also because of the lack of knowledge of the English speaking skills.

And then Friend, the requirements of the foreign investors who want to work within Japan, are very big. What is the meaning of this? That you win big or you lose big, which means the scale which is required to operate in Japan is comparatively much larger, much bigger. So the resource differences which are required in Japan for settling down or to set up business are high, big. So the stakes are high. So if you succeed, you make big profits, but if you fail, you make big losses. So these are some of the major barriers of entry of foreign investors in Japan. But if understood well, it is not difficult to overcome such aspects.

Then Friend, another very important and very strong barrier to entry of foreign investors into the Japanese market is the existence of a very strong base of local companies that compete with each other very aggressively. Dealing with foreign companies becomes difficult without proper preparation and knowledge of the market. So things like Keiretsu, which had become very popular in recent decades, but is now in the declining phase, means that the network of the local businesses that have financial stakes in each of those companies, buy back shares with each other and form a kind of network of the cross investment in these companies and they try to do business within the group, which are called Keiretsu. So this practice has been very very common in Japan, which helps absorb the mergers and acquisitions within the Japanese market for the local companies and to absorb the share prices, fluctuations, or financial market fluctuations, by having cross investments with each other. So that practice had been very, very common.

It is still there and the banks are also involved with such kind of kairetsu. But at present, their impact has reduced drastically. Foreign investment entry into Japan requires that such kind of Keiretsu are having much less of an impact on the market. And the government is trying to reduce the impact of such kind of networks. Then Friend, another major challenge of the Japanese market is that the winners of the past, investors in Japan, indicate that the usual knowledge of the management and management theory and the thinking and the methods which are taught in the top B Schools, like Harvard Business School or the Stanford or the Cambridge. So this kind of management knowledge does not fit into the requirements of the Japanese market. So Japanese market management requires a local type of new thinking, which has to be developed for the people who want to operate in Japan.

They have to be prepared for that. One of the things which this course will do will give you the basic ideas about the management techniques and methods which will work in Japan and what are the differences of those methods and techniques which are different from the usual Western management thinking and methods which we know. So in this course, Friends, I will tell you a little more detail about these differences, which will give you an idea of what kind of new thinking is required to succeed in managing the people in Japan. So, Friend, one of the major reasons for such differences and challenges that exist in Japan is that Japan was never a Western colony. So in the Asian continent, the only other market, that was not a Western colony was Thailand.

Japan was also in that category. So they have been able to pursue their own original culture, and their original thinking, and they were stuck to those things. It was only when the Japanese industry and financial bubble burst in the 1980s that they understood that they needed to change, they needed to learn from the world, and they needed to assimilate themselves with the world. And then finally, Friend, the globalization and Internet, which was unexpected for the Japanese society and the government of Japan, when it came and got imposed on the people of Japan, they had to open up their economy. They had to change with the world. So these three factors that in the 1980s financial bubble globalization and the Internet and the very fact that Japan is a democracy, it's a capitalistic society, which is very much part of the world globalization, and they want to remain that way.

The impact of their own identity because they were never a Western colony and they are different from many other Asian nations. So, Friend, all these things have made a major difference. And it is a mix of the opportunities and challenges in Japan because of these reasons. Now Friend, the major challenge which is experienced by foreign companies that want to operate in Japan, they find that making a market entry in Japan is very, very difficult. There are many, many factors for that, which I'll be going into more detail later in this course, but the two major factors which have been experienced by the past cases of the foreign companies which operated in Japan, in the areas of telecommunications, in the area of consumer electronics, in the areas of education and many other areas, there are so many case studies available of the successes and the failures of the past market entry of the foreign companies in Japan, 2 major factors have been highlighted in this difficulty of market entry into Japan, one being the highly bureaucratic system of the different types of permission which are given by the Japanese government to the foreign companies who want to operate in Japan. So while the system had been very complex and very time-consuming in the past several years, New legislation and a new approach from the Japanese government have made things much better.

Now the bureaucratic systems are changing in Japan, permissions are taking much less time now and things are looking better now. But still, the bureaucracy remains the time taken by the different authorities in Japan for giving different types of permissions. And the existence of many, many procedures to set up companies in Japan remains on paper, at least. So this becomes one of the difficult markets. But at the same time, let me tell you that Japan has moved many places in the 'ease of doing' index in recent years, and it is now in the top 10 countries of the world of 'ease of doing' business. So this is a major moment for the country, towards the ease of doing business. So definitely things have become better now. But the second factor, which remains, is the cultural differences. And because of these cultural differences comes differences in the management style, differences in the management of the people, and differences between the consumers, and the stakeholders of the businesses that would like to operate in Japan and originating from overseas. So these cultural differences, different tastes, and different habits remain a major challenge for the market entry of overseas companies, which require some pondering, some support, and knowledge.

Then friends. there are a few minor challenges which are there in the Japanese market, which include the high cost of settling down, especially in larger cities like Tokyo, where real estate is still very costly and the settling on costs are high. And then the working environment in Japan, again, is quite different from the other region. In industrialized countries where the 40-hour week is there, in many industries countries, while on paper in Japan also it is 40 hour work week. But in most cases, companies demand more than 80 hours of extra work per month from the employees. And in many cases, they don't even pay the overtime compensation. So it's a quite different type of capitalism, which is practiced in Japan, very much different from the other industrialized and rich nations in Western Europe and the American continent.

But yes, it can be taken care of if understood well. And then finally Friend, the lack of knowledge of English. As I told you very few Japanese people know English and speak English. And of course, the very limited type of food options available for foreigners in Japan, also makes it a little difficult to work in Japan. But with proper preparation and basic knowledge and the type of knowledge that I'm going to give you in this course, many of the challenges can be taken care of.

Hello, Friends, welcome to this documentary on the places and cities in Japan. Friends, this documentary series is part of the course on how to do business with Japan, the course which is live on the UDEMY platform. So this is the first documentary of the course, which is about approximately 10 to 15 minutes long. So you will find many such documentaries in this course which will look at the different aspects of Japanese culture, Japanese places, Japanese business, and the day-to-day life of Japanese people. So the purpose of these documentaries is to give you an overview of the several aspects of the country, which is Japan. And these documentaries will help you understand the different dimensions of Japan. So Friends, this first documentary, I'm going to give you a sketch of the geography of Japan, and I will take you to these different cities on Virtual Bike. So I'll be using a virtual tour bike to move from one city to another city and I will tell you about the cities. I will go quickly because I want to cover some of these cities in this documentary to give you a glimpse of these cities and their incredible infrastructure and the places of interest and the people and the famous places in these cities.

And also, I will talk to you about what these cities are famous for. So Friends, first I will explain the geography of Japan. Japan is a country of islands which has got almost close to seven thousand islands in this country. The main islands are four islands, which are called Hokkaido, Honshu, Shikoku, and Kyushu. And then there are several small islands on the periphery of Japan. One very famous area of Japan is at the southmost tip of Japan, which is a collection of almost one hundred and fifty islands. And the city, which is very, very famous in these islands, is called Okinawa. So Japan has some major cities like Tokyo, which is the largest city in Japan and is the world's biggest metropolitan area with 35 million population.

Then cities like Osaka, Nagoya, Kyoto, Hiroshima, Fukuoka, and Sapporo, these are all major cities in Japan. So friends in this documentary, I will take you on a virtual bike journey to these cities and I will give you an overview of these cities. I will show you some interesting places which are very, very famous in these cities and towns. So I plan that we will start our journey with Tokyo, which will be our first stop. From Tokyo, we will go to Osaka, which is a big city, and then from Osaka will go to Hiroshima. So as I have just mentioned to you, Japan is made up of 47 prefectures which resembles the states in many other countries, like we have states in India, almost twenty-eight states in India. And the US has many states. Similarly, Japan has 47 prefectures, which are the first administrative layer of the first layer of the administration, which is done by Japan. Then there are some sub-prefectures also, but will not go to that extent. I will just show you that the famous prefectures are like Tokyo Prefecture, Toyama, Osaka Prefecture, then Okinawa, which is the southernmost tip of Japan, and of course, a very big prefecture, which is Hokkaido, and many others. So, Friends, we will not go to the prefecture level, but in this documentary, I will take you to some major cities in Japan. Let us go to, let us start our journey with Tokyo. Friends before we start our journey from Tokyo.

I just want to show you that I just want to show you that Japan is made up of almost three-fourths of its area, which is mountainous, which you can see in these green areas. So these mountainous areas have a much smaller population than Japan and most of the population is squeezed into the cities, which are mostly in the coastal areas or the nonmountainous areas of Japan or on the islands in the sea. So, Friends, Japan's geography is very, very unique, the major portion of which is mountainous. In many places, you find snow for almost the entire 12 months. You get snow in some places. And there are a lot of natural sites which are there in Japan. And because of the squeezing of the population in the coastal areas, some of the cities are very dense. For example, Tokyo is one of the most dense places in the world. So let us start our journey with Tokyo. So, Friends, we start our journey with the most iconic place in Tokyo, which is called Tokyo Tower, as you can see here. So we are starting our journey with Tokyo. And the most iconic place in Tokyo is the Tokyo Tower, which is there in the middle of the city. Very famous spot, a tourist place. You can go to the top of the tower. So from Tokyo Tower, you can see, the whole city, which is a very, very big city. So friends with more than 35 million population, Tokyo has the busiest railway station.

In Shinjuku station, so we'll go there, but look at the whole city from the top of the tower. So we are going to Shibuya, which has the world's busiest pedestrian crossing, I will show you. It is very, very famous. And after that, we will go to Shinjuku, which is the busiest railway station in the world. So that is our plan for Tokyo today. So let's first go to Shibuya. So we are in the city of Tokyo and Friends, this particular square is very famous for being the world's busiest pedestrian crossing and the name of this particular crossing is Shibuya Scramble Square, which is based on the name of this particular building, which is the Shibuya Commercial Square building. So this crossing is the Shibuya Scramble Crossing, the world's busiest pedestrian crossing. So now we're at the Shinjuku railway station, which is supposed to be the world's busiest railway station, this is the main crossing, a pedestrian crossing through which you can reach the station. So we'll go to the station. You can see it's a very busy station. So this is the main entry to the station building. We'll go there and from there we can catch trains also.

But since it is our bike tour so, we don't need to get into any train. We don't need to catch anything. I just wanted to show you the station, because it is supposed to be the world's busiest railway station. So there are a lot of shopping areas around this station in the station premises. Also, there are various shopping malls. So we are just outside the Shinjuku Station and there are so many shopping areas and within which you have the entry to go to the platforms and the area around the station, as you can see here, just in front there is this Lumine 2 shopping mall. So this is Shinjuku Railway Station, which joins five lines and connects to every place in Japan from Tokyo. So this is a very busy station, but because of the coronavirus scare, you hardly see people at this time. OK, Friends, now we are very near to the other iconic place of Japan, it is called the Tokyo Sky Tree.

This is the second most famous tower in Tokyo. And I will just show you around the area. So Friends, settling down in Tokyo is very, very expensive, a 2 bhk apartment can cost almost 8,00,000 yen per month rent and the initial deposit may run into more than 15,00,000 yen. So settling down in Tokyo as an expat is very, very expensive when it comes to the stay. But the rest of the things are usual, the traveling cost and the utilities cost and the food cost. You will find they are very competitive like in any other city in Japan. But otherwise, Tokyo is a very difficult city, a very expensive city. Taxi charges are very, very high in Tokyo. The most famous food place for cheap food and food on the go is 7-Eleven, which has the maximum number of outlets in all of Japan. So you can get some very good items in the 7-Eleven. In another documentary, later, I will tell you about the different types of foods and their prices in Japan.

And I will take you to some of the outlets of 7-Eleven in that documentary. So you'll get an idea of what kind of food is famous in Japan because Japan is the birthplace of the most famous dish in the world. That is Sushi. But there are many other dishes and snacks and food on the go, in Japan, which I'll talk to you about, in that particular documentary.

Choose the one that is the best

Geert Hofstede's Cultural Dimensions model is a framework for comparing different cultures based on six dimensions: Power Distance, Individualism vs. Collectivism, Masculinity vs. Femininity, Uncertainty Avoidance, Long-term vs. Short-term Orientation, and Indulgence vs. Restraint.

According to Geert Hofstede's research, the scores of Japan in each of these dimensions are:

1. Power Distance: Japan has a relatively high score of 54, indicating that there is a significant degree of acceptance of hierarchical structures and respect for authority.

2. Individualism vs. Collectivism: Japan has a relatively low score of 46, indicating that it is a collectivist culture that values group harmony and consensus over individualism and self-expression.

3. Masculinity vs. Femininity: Japan has a relatively high score of 95, indicating that it is a highly masculine culture that values achievement, competition, and material success.

4. Uncertainty Avoidance: Japan has a relatively high score of 92, indicating that it is a culture that seeks to avoid uncertainty, ambiguity, and risk.

5. Long-term vs. Short-term Orientation: Japan has a relatively high score of 88, indicating that it is a culture that values long-term stability and perseverance over short-term gains.

6. Indulgence vs. Restraint: Japan has a relatively low score of 42, indicating that it is a culture that values restraint, discipline, and self-control overindulgence and immediate gratification.

In the next few videos, Dr. Jain shared his research and practiced ideas to understand the culture of Japan better. Also discussed are tips and techniques to deal with it. At the end of the section, you will find the second interpretation documentary on Japan.

Hello, Friends, welcome back to the course. Friends, I can tell from my own experience with the Japanese market, dealing with the people, and business people in Japan, in my view, as per my understanding, the most intriguing part of the Japanese market is their unique culture. So, for instance, there are many theories as to why Japanese culture is unique. I will talk about it. But before I talk about the reasons for the unique culture of Japan, I will first describe to you the uniqueness of the Japanese culture. So Friends, you will soon find in this course, that the major factor in the main challenges, related to the Japanese market, doing business with Japan, relates to the cultural uniqueness of Japan. So, for Friends, I will try to explain to you about the Japanese culture. I will describe the Japanese culture and how it is different from other cultures. So in this particular slide, I will compare the cultural dimensions which was suggested by Geert Hofstede, the renowned researcher and scientist in the cross-cultural comparison of the cultures of different countries. So Friends, as per the dimensions suggested by Geert Hofstede, I will compare the Japanese culture with the culture of the US. So you will find the scores of US culture in this column and the Japanese culture.

You will find the scores on different dimensions, mainly the Geert Hofstede cultural dimensions. I will explain and I will compare the scores of Japan with those of the US. So if we talk about the cultural dimension, which is called uncertainty avoidance, the meaning of is, that a higher score on uncertainty avoidance indicates a high level of avoidance of awkward results or uncertainty related to any action, any project, or any business. So the cultures with high uncertainty avoidance index score, display a high level of the pre-project work research and ensure that everything is perfect and it is as per plan. There is no deviation in the implementation of the projects or business and the focus is on avoiding the awkward results or the negative results. So you will find that on this dimension, the score of Japanese culture is 92. When we compare the same score of the American culture, and US culture, the score of US culture is 46. So as against 46 scores, the score of Japanese culture in the Uncertainty Avoidance Index is extremely high. It is among the highest in the world. So because of this, there is a peculiarity, uniqueness, in the Japanese culture because that kind of deviation is not very common. It is very rare. Looking at the second dimension, suggested by Geert Hofstede which is called Power Distance Index, PDI, in short, it is called, which indicates the acceptance of the hierarchical status of every individual in the society in a particular culture. How acceptable is it to society, the existence of powerful people who dominate the other people in the society?

They have a privileged status due to the existence of strong hierarchies in society. So higher score would indicate the existence of very, very strong hierarchical positions and the status of the individuals in the society. So if we compare the Japanese cultural score on this dimension with that of the US, you find that in the US, the score is much below average on PDI, which means that the US society is not hierarchical, while in the case of Japan, it is somewhat hierarchical. And you can see it is a borderline hierarchical society. And it is better than many other Asian societies, the societies in the neighborhood like South Korea or China, which are much more hierarchical societies. The P.D.I scores of these countries are much higher than Japan. So to that extent, we can see that the Japanese culture is hierarchical from the Western standards, but perhaps not hierarchical from the Asian standards.

But the third dimension of Geert Hofstede is called the Masculinity vs. Femininity Index score. So you find that the Japanese culture is highly masculine. It is the most masculine culture in the world. If you compare the score with the U.S. culture, which actually should be masculine because of the high level of individualism in American culture, still the score of the US is just 62, while the score of Japanese culture is 95. So it indicates that there is a higher level of competition among the people in Japan. But this particular aspect of competition among the individual does not exist in Japan because of the high level of pluralism, because of the existence of the collective society, because of the low score on the individualism index in the fourth dimension of Geert Hofstede, that which compared with the US, is much lower. Because in the U.S. culture, the individualism index score of Geert Hofstede, is 91. So to a greater extent, Japanese society is collective and the competition still exists because of the high level of masculinity in Japan, among the groups, among the companies, and the business houses. So that competition is extremely high because of which the Japanese culture is regarded as the most masculine culture in the world. Now Friends, the fifth dimension of Geert Hofstede, which refers to LTO scores that is the long-term orientation, we find again that the score of Japanese culture, when compared with the US culture, is extremely high.

The score of US culture is much lower on this dimension. The meaning of which is that the Japanese culture is highly long-term oriented and their actions and their planning and their slow decision-making, there are so many aspects of the culture that are visible and indicate the long-term planning of the Japanese companies, including the focus on the market share rather than on the quarterly or year to year profits of the companies. So there are many, many aspects that I will discuss in a little more detail later. But this is a very important dimension of the culture, which makes the Japanese culture very unique when compared with other cultures of the world. Now, finally, the sixth dimension of Geert Hofstede's framework of the cultural dimensions, the comparison of the cultures of different countries, and that is the indulgence score which indicates the extent to which, a society tends to restrain their inherent desires and impulses and try to restrict their desires and impulses to indulge in the worldly comforts and the actions which may not be socially acceptable in any of the cultures. So we find that the score of Japanese culture on the indulgence index is lower than the average, while if you compare with the US culture where the indulgence level is much higher. So I will talk in a little more detail about this particular dimension and what it means for Japanese culture because I want to spend a good amount of time making you understand that what are the uniqueness of Japanese culture. Because that is the most important aspect of dealing with Japan and that's a very major success or failure factor when doing business with Japan.

Then friends, finally, if we talk about the context of the culture, we find that the Japanese culture is a high-context culture, while we compare it with the US culture, which is a low-context culture. So what you find is that in a high-context culture, society works on the inherent rules and regulations that need to be understood. They need not be communicated verbally. While in the case of low-context culture, people manage these societies and Day-To-Day life with a lot of communication, verbal expressions, and verbal discourse, it is easier to understand the low-context culture. It is much more difficult to understand the high-context culture for the outsiders. So that creates a lot of challenges and barriers for the outsiders to be successful in Japan.

But with the proper understanding of Japanese culture, it is possible to succeed in Japanese culture, the efforts of the Japanese government in present times and the overall resolve of the Japanese society to accept outsiders and the cultures of the world at present are making it much easier for the outsiders to operate in Japan.

So, now, I will take up these dimensions and their impact on the main characteristics of Japanese culture. One by one. So if we start with the uncertainty avoidance score of Japan, we find that the Japanese culture is more bureaucratic. As we already mentioned, I had discussed this thing in my earlier episodes that the Japanese culture is indeed very bureaucratic. It takes a lot of time to get permission to set up businesses and to set up your factory's construction. It takes long periods to get these permissions because of the high level of bureaucracy, which comes from the uncertainty avoidance score of the culture.

Now, Friend, the reason for this type of Japanese cultural aspect of the high uncertainty avoidance level of the Japanese culture comes from the historic encounter of the Japanese people with natural disasters like tsunamis, typhoons, and earthquakes. So Japan traditionally has seen major natural disasters and they have found ways of dealing with such disasters, with a high level of planning, a high level of S.O.P., standard operating procedures, and the readiness to deal with any eventuality. So it has become an inherent part of the Japanese culture. And because of this, you find that the Japanese culture is characterized by a high level of uncertainty avoidance score, and because of this emerges the characteristics of Japanese society as more bureaucratic. And these reasons delay the implementation of the plans and the projects and the setting up of the businesses. They expect people to do all due diligence before any new business is set up. Any construction is carried out. So it has become the most implicit and inherent part of the Japanese culture to carry out the business this way.

Another characteristic that emerges from this type of display of a high level of uncertainty avoidance by the Japanese culture, which results in the strict rules and regulations that prevail in Japanese societies. And definitely because of these standard operating procedures and the tradition of the readiness of the people and the hierarchy of the society which has been created to deal with the eventualities, the natural disasters, and the high score of uncertainty avoidance, the result is that the Japanese society is highly ritualized society.

So you find the long prevalence, the strong prevalence of the rituals and ceremonies, and the way of life, which is based on certain regular frequent events. The acceptance of the common practices to carry out such events is very high in Japanese culture. Now friends, if we talk about the second aspect of the Japanese culture, which we had discussed in the last slide, and which refers to the high score on the P.D.I, that is the power distance index of Geert Hofstede cultural dimensions, what we find that the score of PDI of Japan is not very high. So the result of this is that it is regarded as a borderline hierarchical society. So somewhat hierarchical by Western standards, but by Asian standards, it may not be hierarchical because there is hardly any pretense of extended families or large families. In Japan. You find the nuclear families, which are quite different from the characteristics of typical hierarchical Asian societies, and the Asian neighbors like China and Korea, which are much more hierarchical societies.

Then because of the borderline P.D.I score, above average score, and the existence of meritocracy is there in Japanese society. So the idea is that if you deserve it, if you can work for it, you can show the merits, either individually or collectively, you will get the benefits, you will get rewarded in the society. So meritocracy exists in Japanese society, Then of course the thinking is that hard work pays. From birth, Japanese kids are trained in such a way that if they work hard, they are going to be rewarded for their hard work.

They will get a better status. And whatever the hierarchical status exists in the Japanese society, the hard work will provide those status, and those positions to the individuals in Japanese societies. But the overall result of the more than average PDI score is that the Japanese decision-making process is much slower, which is also influenced by the highest level of UAI score of Geert Hofstede, that is the high level of uncertainty avoidance, which also contributes to the slow decision-making process in every aspect of the Japanese society. Ok

Now friends, I will take you to a very interesting place in Japan, which is the sports area of Japan where the sumo games are played this particular sports area is called Kokugikan. This is the world's largest sumo game hall. And I will take you to this place inside. We will visit this world's biggest hall for sumo games, sumo wrestling. So we are just outside Kokugikan, which is in the heart of Tokyo. And you can see that this is a very good office area and some residences are also there. So let's go to Kokugikan. So we just entered Kokugikan. So friends, you can see here it is the world's largest. Sumo Wrestling Hall. That was Tokyo, so Tokyo is also famous for some religious places, the places as Sensoji Temple or Meiji Shrine. So we will not be able to cover those places in this documentary. But Tokyo is very famous for these places, which I just showed you. And of course, Tokyo's infrastructure is very good. Commuting is very easy in Tokyo. It has got one of the finest subway infrastructure, and transportation within the city. But it is a very, very large metropolitan area. It is the world's largest metropolitan area. Hello, Friends.

Welcome back to the second documentary of this incredible course. So Friends, in this second part, we are planning to go to Osaka from Tokyo, as you can see from here. So Friends, what we are trying to do, is that we are trying to go for a bike ride from Tokyo to Osaka. And as you can see here, Tokyo is a very big metropolitan area. It is the largest metropolitan area and it will take a lot of time to come out of the metropolitan area of Tokyo. We are presently in the suburbs of Tokyo and it is taking some time to come out of Tokyo and we are heading towards Osaka. The total journey should take around six to seven hours. As you are aware, this is a virtual tour, Friends, the main idea of the virtual tour as a documentary in this course is to make you conversant with the Japanese people, Japanese culture, Japan as a country, cities, places, and the lifestyle and day-to-day activities of the people.

So Friends, in this journey, you can see that we are moving on the E1 expressway, which goes from Tokyo to Osaka. So we are just entering the Kanagawa Prefecture, which is just adjacent to Tokyo. And this is an interesting place. At a certain time, it was in its heyday and it was the main center of Japan. But today the main center is Tokyo. Kanagawa Prefecture contains the most populous areas, which are also part of the Tokyo metropolitan area. So, Friends, we are just moving into the Kanagawa residential area. I just wanted to show you, I have taken this detour from the E1 Expressway. We will come back to E1 Expressway, which is going from Tokyo to Osaka. I just want to show you the lifestyle of the people in Kanagawa Prefecture, which is just adjacent to the Tokyo Prefecture. So, friends, we are back on the E1 expressway and we are moving towards Osaka. I will take another detour on this E1 expressway and I will show you the Mount Fuji. And when we approach Mount Fuji on the expressway, it looks like it's a beautiful sight to see. So you can take this detour. It is not going to add too much of the distance from Tokyo to Osaka. So, now, this is the detour I was talking about. So we are on a parallel road to E1 Expressway, which is going to Osaka. And you can see on this detour, this expressway you can see in the horizons, Mount Fuji and how it looks like. So as you can see the view of Mount Fuji is picturesque and the journey is beautiful from Tokyo to Osaka. So right now, I am stopping by Kyoto City, which is very near to Osaka. It has already taken six hours and I'm looking for some food, maybe in Seven-Eleven, which is very, very popular in Japan. And you can find many, many outlets on 7-Eleven. So I'm trying to find some food, which I would like and I would like to have, but I really could not find very good vegetarian food today. So I had very small snacks, little snacks. But I have decided to stop by the food court on the E1 expressway, which is going to Osaka, and have some coffee and some snacks, maybe some bread. So this is the food court. I'm stopped by on E1 Expressway on my way to Osaka.

It is already 7 hours. So now after having my coffee at the food court, I entered Osaka city and took another one hour time from Kyoto to Osaka. So we are now in Osaka, Osaka City, which is our destination. So my bike ride was very smooth and this journey was very exciting. I saw Mount Fuji on the way. So right now I have already booked one single room in one of the hotels in Osaka on my way to that hotel. So some very interesting sites are there on the way. So I'm very near to my hotel. So friends know that we have reached Osaka. I will give you a little bit idea about the city, Friends, Osaka city is among the largest cities in Japan, and it's a very big urban area. The uniqueness of this urban area is that it has a lively character and charm. It is famous for its unique dialect. The people have a unique dialect and cuisine. So the famous foods in Osaka like Takoyaki or Kitsune Udon. I will show you Kitsune Udon, which is also available in the vegetarian version, very famous. Very good food is there.

Very famous and it is the exclusive food of Osaka because this is the specialty of Osaka. Then Friends, Taiko Manju, which is a sweet which is very famous in Osaka, is a baked sweet, filled with the Azuki bean paste and different types of paste are used. It's like the American Pancake. I will show you that this is what is also available all over Osaka. They are specialty shops selling this particular sweet. So we will look at the famous foods of Osaka. The places of interest in Osaka include Universal Studios, Japan. So the city hosts Universal Studios in Japan. Then it has got the world's largest aquarium. So I will take you there also. The cultural heritage of Osaka is visible in Osaka Castle. I will take you there also. These are very nice places, but the best place where people want to go, which is the nightlife district, very charmful it is. It is famous for its neon signs of Japan, which are very famous, in this district, nightlife district, which is called the Dotonbori. So in the evening, we will go to the Dotonbori also. So Friends, this Osaka is divided into several wards and there are certain areas in those wards. So I will take you to my hotel hotel Toyo, Friends, which is in Nishinari ward in the small colony, which is called Taishi. So I will take you to the Hotel Toyo, where I could get a single room, a Japanese-style room, a very small room with a shared bathroom.

I could negotiate the single bedroom there for 1000 yen, for the night stay Right? So there was a very good deal at present. So I will show you around this place where my hotel was there, I will take you to the nearby places and then I will just go around near the hotel and you will see the life of the people and what they do. How are these shops, what do they sell? So we will try to explore the area around the hotel. So these things I'll be doing will give you an idea about the Japanese people, and Japanese culture. We are just outside the Hotel Toyo, which I had booked for this night. So I'm not sure about the night, next night, which means the night tomorrow because I'm not sure of my plan. So I have just booked for one night at Hotel Toyo and negotiated the price to 1000 yen. This is the outside of this hotel, hotel Toyo, and this hotel. a single bedroom. I will just show you what type of room it is. So, Friends, this is the interior of the room which I got for 1000 yen in Hotel Toyo. And it has got some basic facilities.

It has got air conditioning, and also smaller conditioning. It is sufficient for this small room. So it's a good deal in Osaka because I never wanted to spend big money just for one night. I never wanted to spend more than that. You can get to the dormitory accommodation in this particular area in Nishinari Ward, Taishi region. You can easily get dormitory accommodation where you will get the night stay on the bed, which would be the four-bed kind of layout in one room. And you can get it for less than 500 yen also. So this particular 1000 yen room, single room was good enough, is a good deal because you have the privacy and you can keep some of your items with you. Otherwise, in the Taishi region, I will show you there are a lot of private shopkeepers who provide the coin lockers. So using the coins, you can set your code for the lockers and you can put your valuables some of the shops even provide storage for the baggage. So what do people do?

They keep their luggage in these shops and they have the coin system also and they have the manual system also. So they spend the night in the dormitories, which cost less than 500 yen per night and that is how people do stay in Osaka City and save money. So this was a better deal, 1000 yen with a private room, a small room with a single bed, so neat and clean, the linen was clean and it has got a shared bathroom. So in dormitories also you have this shared bathroom. So I will show you around in this hotel. Before that, I will just show you the map of this area. So friends, this particular hotel, hotel Toyo is in this area, which is in the Nishinari ward of Osaka, very near to Osaka Bay, which is here. And this Osaka city, the main place in Osaka City, can be approached from this particular area very easily because I will just show you that this place has got a very good transportation system. So if you look at this area you can see that this is the Hotel Toyo area, Taishi area and you have the Shin Imamiya Main railway station of Japan, which connects the Japan railway lines. And you have the tram line also here.

And the other line is also there. So you have the main line, which is called the Nankai Line. So Nankai Line is available. The railway station, which is called Shin Imamiya is there, which is the walking distance from this hotel. So this is a very good location. So friends, all the places which we want to go in Osaka city, like DotonBori, or the Osaka Castle or the Aquarium or the Universal Studios, Japan. So all these places are nearby and one museum is also there. Osaka Museum is also there, which is also very near to this place. So that is the reason I chose this particular place and this particular hotel, which was available at less than 1000 yen per night. So my idea is to show you Osaka City, to show the life of the people and how they do their daily activities. And I will take you to the different places in Osaka and you will get an idea of the life of people in Osaka.

So friends, let us first go to the places around the hotel.

I will show you the area around the hotel Hotel Tokyo.

So this is the back side of the hotel you can see here.

So you will get an idea of how people live there.

So one thing you will notice that people use bicycles in Osaka in a very big way.

So in this area, you will find a lot of parking for the bicycle.

So that is the main method of communication for people in the area.

So I will just show you just in front of the hotel.

So this is the area around the hotel.

So I just wanted to show you how people live. Every nook and corner has a vending machine where you can buy beverages or flavored milk.

Normally, the vending machines accept ¥50 coins or ¥100 coins, so you will find most of the machines.

They are either ¥50 or ¥100 coins.

And accordingly, the stuff is there in these machines.

So you will find many of these machines, and especially in the coronavirus time when many of the shops are closed, you will find that people are using these machines for their daily purchases.

And the supermarkets are also open.

So the neighborhood shops are generally closed, especially on days when there is a lockdown.

So the shops are closed but the supermarkets are open.

So I will just show you around this place.

So we are just moving around the hotel so you can see these kinds of ¥100 vending machines, ¥100 coins.

You can get things like some kind of flavored milk or some Coke or some juices.

So these things are possible.

So this is the street where our hotel is there.

So just next to Hotel Tokyo, you can see there is another hotel which is Hotel Reisen, but it is a little more expensive.

So I did not stay in this hotel.

So I found this area beautiful.

Very good hotel area, a very good neighborhood, neat and clean, and a very affordable place it is.

So if you see this place, if you see the kind of shops that are available around the hotel, you will find the shops providing local services like this one for locals.

You can see it here.

So this particular shop is giving locals their rental which has got the coin lockers also.

So using the coin you can put your valuables in this particular shop and they also provide the baggage service, which I just told you.

You can keep your baggage also.

So you can see where they have given the picture of the baggage also.

So there are many shops in this particular region because this particular region is famous for the night stay hotels of the Japanese style type one room system, which I just showed you, or the dormitories.

So most of these hotels provide you the dormitories.

And generally, the price range at present, which is going on is ¥500 for the night.

So I will show you more about this place in the Taishi region of the Nishi Nari board of Osaka, where I have chosen to stay.

So due to the lockdown, many of the shops are closed but some shops are open, some services are also open and some of the supermarkets are open.

I will show you some places here and you will get an idea.

So we are still moving just around the hotel only.

So for example, this restaurant is open and this restaurant provides food for roughly ¥200.

You can see some of the stuff is available for ¥200.

The type of food that I told you about is Kitsune udon or the Taiko Manju sweet, which is not available in every shop in the neighborhood.

There are specialized shops where you find these specialties of Osaka, but you can find some momos or some kind of sushi, which is the rice sushis with bean paste inside.

Those kind of things you can get for around 200 to ¥250 in this kind of neighborhood.

Shops, restaurants.

So, for example, this is another restaurant which offers many items under ¥500.

So you can have some meal customized meals in this kind of food joint.

You need not worry about the hygiene of the food, because most of these restaurants in big cities like

Osaka, Tokyo, you will find these restaurants are very hygienic.

Just look at your pocket, and how much you can spend on the food, and you can rest assured that the food will be hygienic.

Many of the shops are closed because of the lockdown Covid 19 lockdown.

So you can see on the right side there is a supermarket here which is partially open for the people to buy their daily needs.

So you can see this supermarket here.

This is the type of supermarket you normally find in most of the neighborhoods in Osaka.

In many other cities, you will find it like this only, and here you can buy the essentials.

So for example, when lockdown is not there, you can see that this place is full of life.

This is the square just outside the Hotel Tokyo where we just visited.

And this was the time when there was no lockdown.

And you can see that the place is very lively and you can see a lot of people on the street and still lot of cycles.

Bicycles you will find parked people use these bicycles in a very big way.

And this is the Shin-Mamiya mainline railway station.

You can see all long route trains.

Short-route trains connecting many major places in Japan can be taken from this railway station.

You will find all types of trains here.

It is a very busy station which is walkable from the hotel.

And this is the market area around the hotel.

And this.

This market is open And you can see the shops here.

They are generally very cramped shops because space is an issue in Japan.

In most of the big cities, space is an issue.

So you will find these shops very cramped and you have to just find your way like this.

And you can buy these stuff, clothes in these kinds of shops.

So you have to squeeze yourself in these kind of shops.

But this is how life goes on in cities like Tokyo or Osaka.

So that is how you shop.

You generally don't find very spacious showrooms in big cities like Tokyo and Osaka.

And if it is there, the prices will be very, very high.

So if you are looking for cheaper stuff, you have to find these kinds of shops which are not spacious.

Some shops are closed, some shops are open because of the lockdown.

So this is what is happening.

Just very near to the hotel itself.

This is the metro station is also there.

Imamiya metro station is there.

So this was a little bit about the life in Osaka.

And now I will take you to some of the interesting places in Osaka.

So today we plan to see the iconic places of Osaka, starting with the Osaka Castle.

So we are just in the compound of Osaka Castle.

Beautiful Osaka castle.

It looked very nice.

Now we are in the world's largest aquarium, which is there in the Osaka port area.

In. Osaka.

Maybe a smaller city when compared with Tokyo.

But it's a beautiful city.

It has its own culture.

Its cuisine.

It's famous as the nation's kitchen.

So in later episodes, I will.

Share with you the different delicacies which are famous in Osaka.

So we are just outside the aquarium.

And this is the port of Osaka.

So I want to show you some glimpses of the port of Osaka.

It is a.

Very important port for international business, international trading, exports as well as imports.

Now we have come to a very interesting place in Osaka.

Now this is the Universal Studio of Japan, which is in Osaka.

And Osaka is famous for this.

Full-day sightseeing attraction which is a Universal Japan.

Universal Studios has only three such amusement parks in the world.

One is in us, of course.

There are two in us.

The other one is in Japan.

This one which where we are visiting right now.

And the third one is in Singapore.

Universal Studios in Singapore is very, very popular with the Indian population.

A lot of Indians visit in Singapore.

But this universal studio of Osaka is a little different.

It is not the same as the one in Singapore, but it has its distinct features and shows.

And the Amusement Ideas Pavilion's different types of pavilions.

You need almost a full day to visit the Universal Studios in Osaka.

There are several shows, theatres Performances games.

So I will give you some glimpses of some of the parts of Universal Studios Osaka.

Anybody agree?

This is the most popular part of the Universal Studios in Osaka, which is the Harry Potter world.

Which also includes the Hogwarts castle.

So you will feel like you are in the Harry Potter world when you enter this area.

And this is the most popular part of the Universal Studios Osaka.

So we just came back to the heart of Osaka, and the evening has to be spent in this district, which is called the Dotonbori district.

This is the nightlife district and is very, very famous for its evening neon signs.

So soon the sun will set and you will see the neon signs of the iconic neon signs, and you will see the crowd coming.

Because of the coronavirus, there are fewer crowds, but you can still see the glimpses and the reputation of this place.

It is also very famous for its food, street food, especially the specialties of Osaka, for which Osaka is very well known.

It is called the nation's kitchen.

All the delicacies that are famous in Osaka.

You can find it here.

So there is a central canal here.

You can also do a boat ride on this canal.

So as the day gets dark, the beauty of this place becomes more and more beautiful, more lively With the lively shows.

And the crowds building up, and the boating ride being undertaken by the people to feel the awe of this place.

To see the famous iconic neon signs of this district.

This is the most sought-after, must-visit place in Dotonbori.

You will find all the tourists converging to the Thonburi in the evening.

So it was all about Osaka and its iconic places and the things that are popular about Osaka.

So there are many other things in Osaka, but we have chosen the best for this documentary.

For this course on how to do business with Japan.

The purpose of these documentaries is to make you knowledgeable about the life, business, culture, food, etc. of Japan.

It's different cities.

So basically these are the interpretation documentaries that aim at giving you the real feel of visiting

Japan and to make you confident about the knowledge of Japan, its people, its culture, and how to do business with Japan.

Choose the one that is best

In the next few video lectures, Dr. Jain discusses the main features of the management style in Japan and how does it defer from the management style in other countries. At the end of this section you will find the 3rd interpretation documentary, familiarizing you deeper into the day to day life in Japan and its important cities.

So if we compare Japanese and US management features, the characteristics of the management system which works there, so we if we talk about the aspects like lifetime employment, which is quite high in Japan and it is very low in the US, so people are not working in US companies for lifetime employment and the employers in the US are not giving the lifetime employment. However, it is not the case in the case of Japan, which traditionally has this system of providing lifetime employment. They take care of the employees.

The welfare is very good for the employees and the systems are created in such a way that the people work with the organization for a lifetime. However in very recent times, let me tell you, be very clear with you that these characteristics are now diluting. So the line between these differences is blurring now, but still, these features you can easily see when you work with Japan. So the second aspect is about the discrimination. So in general, there is no discrimination on caste or any race. Those things are not there in Japan, but there is a discrimination on the gender. So the discrimination in favor of the males and not in the favor of the females is there. And friends, let me tell you, it is generally said by the experts that the reason why the Japanese company discriminates against women is because they generally have this idea that women will not work for them for a lifetime. So they will leave the companies if they are married or if they move from one city to another city or for various reasons.

They have the practical reality, which they generally fear is that the women leave the organization because they don't like actually, the system does not like that. So the main reason for discrimination, as the experts have found out, is because of this reason, and this discrimination does exist. So you can say that the level of discrimination in Japanese companies is minimal, while in the case of the US companies, it is very low. But in the US, it is generally complained that there is racism and discrimination against black people so that part is there in the US. But of course, you cannot compare apples and oranges. There are two different things. But in general, if we talk about the expert's opinion, yes, discrimination exists in the Japanese system on a modest scale, while it is very low in the US companies. So friends, why I am talking about these differences is because most people are aware of the ways of doing business in the US or some of the English-speaking European countries. So a comparison of these parameters on the main management features. When we compare Japan and the US, it will help you to understand the Japanese market. Now friends, if we talk about the third dimension of the management features, which we are comparing with the US. If we look at the recruitment procedures.

So friends in the Japanese management system, the Japanese management feature is that the recruitment procedure of the Japanese H.R. departments is very, very rigorous for the simple reason they are looking for the cream and cream only. The best companies in Japan, look for cream. So they will do a lot of churning, interviews, and several interviews to be sure that the person who is being recruited is the cream. And it also emanates from the high score of uncertainty avoidance. As you know the Japanese score on the Japanese cultural score on high uncertainty avoidance is very very high. So they do not want any bad results or awkward results. So they will take a lot of time to decide and work out things. And, you know, so that particular cultural aspect does come in the recruitment process also. So what happens is that the recruitment procedure becomes very rigorous.

In the case of the US, as we understand from what we know about doing business with the US and other English-speaking countries, the recruitment processes and the procedures are low to medium so it's more on the need. So if we talk about need-based recruitment, if we talk about the Japanese style of working, even if the need is there, even if it is an urgent need, they will not dilute their different processes or different steps of recruitment. They will keep it rigorous. And even though the position is left empty, they will not recruit a person with whom they are not satisfied at the recruitment stage itself. Now, friends if we talk of the fourth dimension of the management style of management working style of any country when we are competing, so we are talking about the level of employee training, the people who already are employed in the organizations, what the level of training provided by the company, the investment made on the employees, by the company, and the focus and the conviction that training is required, to what extent it is required. So in the case of friends, Japanese companies, and Japanese style of working, it is a continuous process why it is continuous because Japanese people think that the employees whom they are likely to expect to work for a lifetime are Key Success Factors. So that is how they differentiate themselves from other companies by having good employees, well-trained employees. So. it is like the Japanese companies to resort to and invest in the continuous training of their employees, while in the case of if we talk of the US companies, we find that the training process is as and when required. So US companies do not have continuous training.

It is just the application of mind because one reason for that is that in the US companies, generally, the employees have individual freedom and they can easily be expected to leave the company whenever they find a better job somewhere else. So it makes no business sense for the business people at the top level in the US companies to invest heavily in the continuous training of the employees. So obviously this difference does exist. If we talk of the 5th parameter of comparing the management style of Japan with the US, let us talk about the workers' union. So what type of unions exist? What is the worker's protective environment or the things to protest or complain about or go to some organization in the case of becoming a victim of certain unexpected behavior by the employer? So friends Workers Union, the job of a union is to look after the welfare of the workers, especially the blue-collar workers, shop floor workers. So friends in the Japanese system of management generally expected workers' unions to be single unions with which they have a kind of agreement, enterprise agreement. So generally the well-accepted fact is that each big company in Japan has the recognition of a single workers union, generally created by the companies themselves. And they are not the Independent Workers Union, which exists in the case of, for example, in the US and many other English-speaking countries in Europe. So, friends, it is quite different.

It is a kind of enterprise unionism. So this enterprise unionism exists in Japan, which is quite different, but it works very well. Friends you should not say that this is kind of a monopoly which is has been created by Japanese companies to exploit the employees. That is not true. Rather, the enterprise unions take the middle way, keeping the interests of the organization as well as the interests of the workers, which works very well because both are happy the thing will work for a longer time. It will be more sustainable, the relationship will be more cordial, and that is what is happening. However, it is debatable whether this enterprise unionism is the correct protection of the labor force. So a lot of debate takes place on this issue. There are a lot of research papers which are there on the union system in Japan, which is quite different from many other advanced countries. Now, friends, if we talk of the worker's position and their status in the organization. So generally when we talk about the worker status, we focus on the status of the blue-collar workers versus the white-collar workers. So if we talk about the Japanese style of functioning, we see that the blue-collar workers and the white-collar workers have a single status. For all practical purposes, the status is single for the simple reason that by these management styles of Japan, each white-collar worker has to start with becoming a blue-collar worker. So they have to spend time on the shop floor.

They have to eat the same thing that other shop floor workers eat. They have to be with them until they are graduated into a white-collar job. So the difference cannot exist. So the system is like that. The difference between the blue-collar and the white-collar workers is not there in the Japanese management style. So it's a single status. And in the case of the US also, to a great extent, there is hardly any discrimination between the blue-collar workers and the white-collar workers, but yes, their income levels are different and the difference exists, although there are a lot of shortages today in the US industries for blue-collar workers. So their status has gone up in present day. So if we talk of the seventh parameter on understanding the Japanese management style versus the US, we are talking of decision-making, how the Decision-Making takes place in organizations, medium to large organizations in Japan versus how it is taken, how it is done in the US. So friends in management jargon, we would say that the decision-making process in Japanese companies is bottoms up, which means generally the ideas and suggestions start from the shop floor. And a lot of importance is given to those kinds of suggestions and ideas.

Generally, the top management people are very powerful, but they do not involve themselves in the day-to-day activities. They only come into the picture when it is required and at the right time if some decision-making has to be done at their level. But generally, speaking, it is based on the bottom-up approach and the things which are collected in a particular period of the ideas and sessions. They work very fast on those ideas because with their friends, with time, the Japanese system has evolved and they have learned that it works very well. It improves the product features, it improves the efficiency, it improves the output. If you hear from the bottom line at the shop floor, at the supervisor level, what are the difficulties they are facing? So it helps for the company to create a strategic advantage vis a vis other companies. So that is the learning that Japanese people already have, and they are very proud of it. In the case of US companies, generally speaking, the approach normally tops down, although there is a lot of emphasis on individual freedom. So the people at all levels have the opportunity to speak up or to put their complaints or even suggest and give ideas. Generally, the ideas are listened to, The concerns are listened to in US companies. But finally, it is well accepted that the most powerful people at the top, their ideas and what they say, and their decision-making prevail.

However, the meaning of the top level in US companies has more to do with the profits and the shares and the compensation, which the top person receives and the numbers and statistics he can generate for the companies. Generally, what happens, is the individual preference of the top person in US companies, whether he wants a top-down approach or a bottom-up approach. Generally what happens, depending on the different types of industries, the type of industry, and the nature of the business which the company is into in US companies, they choose between the bottoms-up approach and the top-down approach or something in between. So this is what we already know. I need to tell you about the management style of US companies. Most of us, most of the people who are in English-speaking countries, know the main features of the US American management and working style.

Now only few of the other parameters we will discuss when we are talking about the differences in the management style of Japan, and if we compare those things with the US companies, the three parameters which are remaining which will be talking about is the nature of the workers group.

What kind of workers are there, the categories of the workers?

I'm not talking about the blue color or white color.

I'm talking about the permanent workers, the temporary workers or a mix of it.

What is the method of dealing with the workers, how the labor is managed?

So we are talking about the labor laws.

We are talking about so many things in this.

When we talk of the worker's group employee welfare and internal recruitment.

So workers group in Japan generally comprise of the core workers who actually are expected to be working for the lifetime and the peripheral workers.

So peripheral workers system has evolved in recent times in Japan, which is the not-so-permanent staff.

And depending on the needs of the companies, they may be increased or decreased as the requirement and there is higher and higher in the peripheral worker's category.

So there do exist these kind of two categories, but generally in the US companies, it is not the case.

So generally US companies do not work like that, at least in the US market itself, although US companies in other markets, overseas markets, do follow this system of core and peripheral two types of permanent and temporary workers groups.

But in Japan, it is very, very common.

Now.

Now if you talk of employee welfare, the type of welfare, the focus of the company is towards employees, what type of welfare we are talking about?

So when we say the Japanese management style of providing the employees with the best working environment and compensation, there are many other things.

So I would say that basically, the focus of the Japanese companies is not on compensation, which is actually based on the seniority and the number of years somebody has worked in the Japanese companies.

But they do provide a complete package of welfare, which includes low-interest rate loans or cheaper housing facilities, conveyance, free conveyance, and free food in the companies.

Many of the companies provide free lunch and many other facilities like medical facilities at almost no cost and the loan system interest-free or low-interest rate loan system actually helps the Japanese companies to have better control over the employees, so they treat it as a driving handle to be able to have better control, better grip on the employees.

So it is very, very prevalent, to provide interest-free or low-interest loans to the employees when the need arises.

Finally, when we are talking of the management style of Japan versus us, we are talking about another aspect of the management style, and that is internal recruitment, which means if vacancies exist at certain higher levels.

So it is a very, very common practice in Japan and it is very, very much prevalent that they recruit somebody internally from within the organization.

And that will become their first priority if they are not able to get somebody to fill that particular post, only then they go outside.

So the focus and the first choice of the Japanese style of management.

Style of working is and for the Japanese companies to go for the internal recruitment.

In this case, it is purely based on the profile and the requirement of the job, the right match with the job, and they do not differentiate between the internal employees or somebody coming from other companies.

So it purely depends on the HR people and the HR consultants for what post and what profile is required, whether it will be filled internally or from outside.

So in many cases, it happens that the general consensus is that the particular post has to be filled by somebody from the third organization or outsider.

It is very, very common.

So management working style of Japan is unique, but there is nothing to be alarmed about.

There is nothing wrong with the Japanese management style of working.

It is just that the understanding of the management style is very, very important to succeed in doing business with Japan.

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In the next video Dr. Jain discusses his analysis of the common mistakes which most businesses do when investing their time and money in Japan market. They generally have the habit of blaming the country for their own failures and lack of preparation.

So friends, whatever we have just talked about in the earlier episodes, I talked about the highlights of the market, I give you some basic knowledge of the merits and demerits of the Japanese market, the challenges, the opportunities, and the different types of treatment which are required in this market for the foreign businessmen who want to work within Japan or want to trade with Japan. So these things I just discussed and the failure rate, I indicated is high. If you look at the past cases of foreign investors who invested in Japan and did business with Japan, they failed many times. It is very pertinent to tell you about the common mistakes made by different investors to start with so that we can take off with the course with a better understanding and the proper goal of what we want to learn in this course. So, let us now discuss what are the common mistakes that are made by these foreign business people while dealing with Japan. One of the major mistakes, which is made by foreign businesspersons and companies when dealing with Japan, many of the cases indicate this thing.

I'll be also taking some of the case studies in the course later, in the later episodes, and these things will emerge again and again in those cases. So one of the most common mistakes made by foreign business people and companies who want to operate in Japan is their lack of preparation about the country. So what happens is that there are many assumptions that they make, that they need not do any kind of preparation because it's a democratic country. It's a large, rich country, a very mature country. So even if you don't make any preparations, you will learn things and the people in Japan will try to adjust to your way of working and rather they would be able to prepare themselves. So this is a very major mistake and assumption which is made by most of the investors in Japan. So a lot of time is wasted waiting for the Japanese people to change their ways of working. It doesn't happen. So lack of preparation is a very big mistake. So things like whether you know, what is required to be successful in Japan, are you ready to think differently? Have you prepared yourself to think differently? And what are the different thinking that is required?

And do you know the procedures for operating in Japan? So beforehand, have you done the right research? So many of the things I'm going to teach you in this course will help you tackle this lack of preparation and things like whether you understand the sophisticated consumers, which Japanese are, and are different types of habits and needs. Are you already prepared and have you done your homework, which is generally required and that is friends, one of the major mistakes which are made by the people who want to work with Japan and fail then friends very, very important. It is a very specialized job, which I'm going to help you do in the schools because of the lack of foreign investors and foreign business people putting their efforts into understanding the peculiar high-context culture of Japan. What are the methods of understanding the culture? Have they done this study of understanding Japanese culture? In this course, I'm going to take a very deeper look into the Japanese culture. Understanding the Japanese culture and the methods of understanding the Japanese culture. Those methods can be applied to many other countries. But in the case of Japan, it is very, very useful to understand this method of understanding Japanese culture, which I want to share with you later in this course, friends. So do you understand how to deal with the high-context society that Japan is?

Do you know how to understand the peculiar culture which Japan? Do you understand its people, people's culture, history, food, religion, habits, behavior, day-to-day life, and the things associated with the defining of the thinking of the Japanese people? What do they think? Why do they think the way they think and how it is different from the typical type of thinking that is done by the people of the world? So that kind of cultural understanding is very, very important in the case of Japan and then finally friends, the basic lack of the basic knowledge itself about Japan, the basic facts about Japan, what Japan is, what is the demography of Japan, what is the geography of Japan? What is the political structure of Japan? What are the peculiar things about the Japanese economy, the Japanese industries, and the different industrial sectors? So, for example, do you know the reasons for the failures and successes of the past overseas investors in Japan?

What were the factors? What were the reasons because of why the success stories emerged for the foreign investors or the foreign business persons working in Japan or their failures? Do you know and understand Japan as a country, its basic facts about its people, its demography, geography, history, its different cities with starkly different populations, the cost of living, and many aspects of the Japanese society that are there? So those basic facts and knowledge can be acquired. I'm going to help you in this course and I'll be focusing very much on this course so that you understand what is Japan. You understand the Japanese places, the cities, the facts about the people of Japan. I'll be focusing very deeply on this course.

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In the next two special documentaries prepared for this course, Dr. Jain provides first hand experience with Japan, its important places, food and culture.

So friends my stay in Osaka was very eventful and very informative, and I liked my stay in Osaka. So right now it is 6:00 a.m. and I just left with my bike to travel to Hiroshima. So I'll be just moving from Hotel Toyo and taking this route towards the north of Osaka and along road No.11, which passes through the Yudo River. So this is Yudo River, Yodo River will be crossing here and will be passing through Osaka International Airport in Toyanaka. The Airport So friends, Osako is called the nation's kitchen, which means Japan's kitchen because it is famous for the dishes and specialties associated with Osaka. So friends, we just crossed the Yudo River. So this was yudo river, we crossed here. So Yudo River We are moving towards Osaka International Airport in Toyonaka.

This is the International Airport. After will be meeting at E2 Expressway, which is going to Hiroshima. So as I was telling you about the delicacies of Osaka Osaka is famous for food items and the Dotonbori district where I had taken you is famous for street food. And many people go to the Dotonbori in the evening to enjoy the Osaka cuisines and delicacies. So I will be having a special session documentary on Japanese food and the specialties of Osaka. So friends, we just passed from Osaka International Airport and will be crossing over another river, which is called Ina River. So we are on the bridge, which is over river Ina, near Osaka. So we are now out of the Osaka metropolitan area, which is quite big. We've already crossed over the Ina river and we are moving towards Hiroshima.

In between, we will be passing through some very famous places, small towns, but very famous like Fukuyama. So at present, we are in Ikeda. It should take around 5 hours to reach Hiroshima. So, friends, this is called Kinki Expressway. It is E2 Road, E2 Expressway. So we are now in Hyogo and we have a stopover here for refreshment or relaxing, so you can see this is a beautiful place, beautiful trees in Hyogo. So, friends, there are speed limits on Japanese highways, but people generally do not follow those speeds. By legacy, Japan has very low-speed limits, never more than 100 kilometers per hour, even on the expressways, but generally, people drive much faster. So this is the stop for the bike. This is a paid parking for the bike. So I just park my bike here and have some refreshments. I will buy some Onigiri, which is easy to find if I can find a veg version of Onigiri, I'll have some coffee also. So generally prices in stopovers are not very high. I could have all these things, which I just mentioned for less than 500 yen So there are a couple of shops and a small superstore where you can buy plenty of things. We also have the fuel station and I was looking for the fuel station, because I want my bike tank full, just collected my bike from the parking lot and had a look at this fuel pump. What is the price they're offering for the petrol? So it's 170 yen per litre I'll get my bike tank full here.

So I paid approximately two thousand yen and got my bike tank full. And I'm just passing through Tsuyama. I'm near Okoyama and approaching Fukuyama Fukuyama is very near to Hiroshima. It's a suburb of Hiroshima. It is already four and a half hours I left Tokyo and I'm very near to Hiroshima. So there is a turn here for Hiroshima, this E2 highway goes further. So I'll be taking a turn to Hiroshima Expressway. So, friends, Japanese drivers are very disciplined, they keep themselves in the lane and they go by all the rules, but the speed limit generally people don't follow. So this is the Fukuki tunnel on the Hiroshima Expressway. It is one kilometer. So in Japan, you will find many, many such tunnels everywhere, because as I told you, three-fourths of the land mass of Japan is mountainous. So you will get tunnels from half a kilometer to 53 kilometers, long tunnels. in Japan. So I have reached Hiroshima and you can see it's like any other small town. Family Mart is there, you can buy a few things and I'm facing some problem with my bike, so I will get it repaired in some place here.

Some small service things are required for the bike to keep it going. Oh, yes, I have got this bike club here. This is my club. They will provide me with the person mechanic to do some repairs to my bike. I was looking for something like this, so Honda, Kawasaki, Suzuki, Yamaha, So mine is Honda. So it's OK. So this is friends, Hiroshima Township.

Hello, friends, welcome back to our documentary series, The purpose of which, friends, is to make you understand the culture, infrastructure, economy, business, etiquette, arts, and everything about Japan, this series of documentaries in this course will help you to understand the Japanese market better. So in this particular episode, I will be talking about the Japan food in the range of 1000 yes. How do you have your lunch or dinner or breakfast for around 1000 yen and what are the things which you can buy in this particular range? So friends I will be talking about the common dishes of Japan and their names and their prices. But also I will be talking about the specialties of Osaka.

Why Osaka? Because friends Osaka is called the nation's kitchen, the meaning of which is that the food in Osaka is the most specialized food in Japan and people come to Osaka to eat. And friends, as you know there are a lot of restaurants in Osaka and there is a complete district, the nightlife district, which is called the Dotonbori, that is very famous for the food, the different types of specialized dishes, which are a specialty of Osaka and the street food, which is famous in Osaka, although some of these foods are found in other parts of Japan also. But most of these dishes, which I'm going to discuss, are the specialty of Osaka. So DotonBori we visited and I discussed and I had shown you glimpses of the evening in the Dotonbori district, and the same district is famous for that. So friends, first of all, let me show you two great options, combinations of lunch. which you can buy under or approximately 1000 yen. So if you go to the convenience stores, which are found in different places in Japan, all over Japan, actually it is not especially of Osaka only.

You go to, for example, the convenience stores like 7-Eleven, which is very, very common. I told you also in one of the earlier episodes that 7-Eleven is a very, very popular convenience store and it is found in every nook and corner of all the big cities in Japan. So, friends, if you go to 7-Eleven, you can buy one set of the food, which is the fried rice Ramen set and which includes the Japanese Ramen, which includes the Gyoza. Gyoza is nothing but like Momos. So the dumplings of the floor batter, filled with the vegetables. So it's very similar to what we know as the Momos and Chahan, which is nothing but fried rice. So it is called Chahan in the Japanese language and the sweet dish, is Mitrashi Dango. What it is, this is nothing but the rice patty flavored with the sweet soya glaze. So friends, you can buy all these four items for less than twelve hundred yen, and probably depending on what you take you may end up paying less than 1000 yen. So this is a very good option. I will give you the idea of another set, try you can try. Again. you can buy these sets from the convenience stores. Especially, you can go to 7-Eleven and this is the Onigiri set. So what is friends, Onigiri?

These are the very, very common things, in Japan, all over Japan, in any city you go, you will find on Onigiri. In India, on every corner, you have Samosa or Chhola Bhatura. So it's like. What is like the burgers in America, it's Onigiri to Japan. So it's the rice balls which are either filled with some bean pasta or some non-veg items, meat items like crushed meat or crushed vegetables. So there are a lot of varieties which are available onigiri. And depending on what is available in a particular convenience store, you can buy it. And of course, Tonjiru, which is the miso soup, actually miso soup with a lot of vegetables, a lot of varieties available of Tonjiru, which you actually can buy from any convenience store, including 7-Eleven and friends, you will have the facility of heating it in all this convenience store. You will find the facility for a microwave and you can just put it there and you can heat the miso soup or the Onigiri or whatever you want to heat up.

Then Nimono is the dish Japanese dish, a very, very common dish of boiled vegetables, different types of boiled vegetables. So there are a lot of varieties of nimonos available. And of course, friends, you can add up the Mitirashi Dango, which is the sweet dish, These four items in lunch you can have and you pay less than 1000 yen. So friends these were two good suggestions for travellers to Japan who want to try out. And many of these options, friends, you will have the vegetarian version also. So you can try or if you find it difficult in convenience stores to get vegetarian version, then you can go to any other small eateries, neighborhood eateries, they will be able to prepare these items, customized to your needs, but they will charge a little extra for this. But you will approximately pay the same amount and you can have the veg version also. So these were the common food dishes of Japan. Now I will tell you some dishes, which are a specialty of Osaka.

And in places like the Dotonbori district, if you go in the evening, you can enjoy all these items. To start with, friends, the very, very common specialty of Osaka is Kushikatsu. You can see these Kushikatsu sticks are there. Every stick will cost you around one dollar, which means hundreds yes you have to pay for each stick of Kushikatsu. Kushikatsu are nothing but crushed vegetables or crushed meat pieces that are deep-fried. So this is very, very common and you can easily get these items. Then a very delicious and very famous dish from Osaka. friends is the Kitsune Udon and approximately anything between 400 to 500 yen, you can get it. And you can get the veg version of this, which is much easier to get. So what is Kitsune Udon is nothing but noodles or Ramen in a very liquid form topped with two large pieces of generally two large pieces of the deep fried tofu So you can see there that this is tofu and the noodles are there and then small dressings of the beans are there or some green vegetables, some side spices. So this is what it's called Kitsune Udon, a very affordable dish, very tasty. And it is easily available in Osaka, especially in the Dotonbori district. If you go for an evening stroll, you'll get it.

Then, friends, a very, very famous product, very, very famous of a very, very famous, specialized and most delicious dish of Osaka is Takoyaki. So Takoyaki is the deep-fried balls of the flour batter paste, which contains either vegetables meat or seafood, or even pasta. A lot of varieties are available and they are offered in this kind of setting and generally, three pieces of Takoyaki would cost around one hundred and fifty yes. Then friends, very interesting Sweet dish of Osaka. The specialty of Osaka is Taiko Manju. It is a Sweet dish. It's like an American pancake of the Taiko shape, Drum shape and it has different types of filling. It can be some kind of Jam can be there or it could be Azuki beans paste will be there or many types of fillings are available to it are available and it cost generally less than 100 yen, then very famous. another dish of Osaka is Okonomiyaki. Okonomiyaki is also called a dish as you like it pancake.

So you can have the customized filling in the pancake like this, which is shown here and it is sweet. And if you don't want it sweet, that is also possible. So it's the filling of the crushed vegetable or crushed meat or seafood with the sweet flour batter and it can be fully customized and cost around 400 yen depending on what type of ingredients and fillings you want. So, friends, Japan is known for many things, but if you go a little deeper, you will find Japanese food and the Japanese palate is very unique. And if you go to different cities in Japan, you will find the different specialties of food, but nothing like Osaka, which is the nation's kitchen.

Choose the one that is best

In the next few videos, Dr. Jain shares some important areas to focus and the tips and techniques of ensuring business success in Japan. At the end of this section, you will find an interesting case study on - Vodafone's failure in Japan.

Welcome back, Friends, so friends in this course. My objective was to give you a graphic description of the situation in Japan, the main characteristics of the Japanese market, and how it is different from the type of advanced markets that we know about. It's quite different. There is no doubt about it. This difference is an opportunity also. So this opportunity, how this opportunity can be tapped. So what is required for success in Japan? That is what I want to discuss, now Friends. So Friends, not to be taken lightly, the most important quality a person can have in Japan is common sense. It is important for one very important reason that nobody will guide you, nobody will tell you things. Even if they know something, they may look. Japanese may look friendly, but they behave friendly. There is no doubt about it. But by nature, they do not divulge many things. So you can learn things by asking people and assuming that whatever the person has not said is not there. So that doesn't work.

That is the reason why the knowledge of the facts about the market and the country, familiarity, and very deep knowledge of the country are required. That is one reason why in this course I have used documentaries, I've created some documentaries. The idea of these documentaries is to interpret the country, make you familiar with the country, and make you the person who has as good as visited Japan. So the purpose of these documentaries is to orient you with the country, orient you with the infrastructure and the life of the people, the culture, the food, the business, all these things I have discussed in the documentaries and this short documentary main goal is to create that knowledge of facts and to familiarize you with the Japanese market. So with the facts, familiarity is the requirement of common sense. So, Friends, this common sense is very important. In this common sense, what is required is the capacity for observation and very strong observation skills.

The presence of mind. You will soon realize that saying presence of mind, because ultimately, as I have been telling you the culture is unique with your observation, your presence of mind, with interaction with the people will create the relationships. So the relationship is very, very important. So, friends, and the presence of mind will help in building the relationship because that's the most important part of the Japanese market. You will soon realize when we go further on these topics why building relationships is very very important. Now for what happens that the knowledge of local customs, all these things, along with the common sense, is very, very important for building the business relationships. But the problem, which I'm just repeating, is that nobody will only communicate with you what is to be done, what is the dress code, and what has to be done in a particular situation. You have to observe, learn, have the presence of mind, and read the air. So basically, you know, this is very typical of the Japanese market that you have to observe and read the air. So this air is not communicating with you.

There is no voice in the air. You have to feel the air and know what has to be done. Initially, it is difficult, but soon you will start learning the thing. So you need to read the air there and make the Japanese understand that you can read the air. They will read you and will start gossiping with each other that this person cannot read the air. They are very smart in that. So. It's not that the Japanese people don't want outsiders, it's not that they are threatened by the it is not that they are threatened by the different cultures or the outsiders or the foreigners. This is not the case. It is just that most foreigners do not understand, observe, and read the air, in Japan. So that's why I told you that common sense is very, very important, along with the knowledge of facts about Japan, country familiarity, knowledge of local customs, and a no-no to the assumption that everything which you need to do, somebody will tell you, even if the person is employed with you, a local person you employ, he may not tell you many things which he knows he will assume he will assure that you will read the air and you will learn. So people will not tell you. And I will add here, that even foreigners, when they become successful in Japan, even they pick up this kind of style. You can say, if not nature, that they also will not communicate with you everything they know.

So these assumptions are very, very time-consuming and expensive mistakes that companies make. I will take one case study of VODAFONE. And just at the end of the session itself, I'll take this case study and you will understand how expensive it can be. So, Friends, the experts agree that the three most important success mantras in Japan to all common sense things or Facts, Knowledge, country familiarity, and local customs, the three success mantras are preparation, information gathering, and planning. So preparation means that you know, the things about Japan, the procedures for setting up the business, getting permission from the government, and how long it takes to build the local support of the legal matters and financial matters. So those kinds of preparation, whom to talk to deal with those preparations and of course, the information all about Japan being very much familiar with Japan, business information, the market, how it works.

Now again, this marketing market research thing is also very, very peculiar in Japan, because, as I told you, if you want to do market research in a country, the people should be able to talk to you and convey it to you orally. That is what we are trained. Most of the people in English-speaking countries are trained to do market research through vocabulary, communication, and verbal communication with the respondents, which does not exist in Japan. So you really cannot do the type of market research which is done in other countries or other advanced countries. You have to observe and read the air, and that's how you do the market research. So the type of market research, you cannot depend on those kinds of market research, which we know. So information gathering itself is very tricky and then friends, of course, the planning. So even if you can understand 60 percent, 70 percent of the real thing if you can read the air, 60, 70 percent by your intellectual mind and the presence of mind and your good common sense, the planning has to be done and planning includes the financial planning, the timelines, the level of involvement you want in the market and of course the local support, the local recruitment.

All this planning has to be done without which if you enter into the Japanese market, it is going to be a lot of loss of time and money. Then, Friends, it is very, very especially important that the people who want to do business with Japan are very much conversant with the past, current, and emerging trade policies of the government of Japan because the government of Japan is evolving. After the bubble of the 1980s, ten to twenty years were lost because the local industry thought that the bubble time levels of the estate prices and the stock prices would come back because they thought that their way of doing business and things were perfect, there are some other reasons because of which this bubble was bust in 1980s So 10, 20 years, nothing happened. So only Prime Minister Koizumi was the one who started widespread reforms in the overall economy, including the business part of it and the many other parts of Japanese life. So he introduced many reforms which, after he was gone as the prime minister, Japan faced the low level of speed of the reforms introduced by Koizumi. So Abenomics further which came, also continued with that, but not at the pace as was in Koizumi's time. So despite the pressure from the business not to go ahead with the Koizumi reforms, Mr. Abe of Japan as prime minister, continued with the reforms of Koizumi, but maybe with a slower pace. So overall, my idea of telling you is that the Japanese government understands that not everything that they know, and what they do is in line with globalization and Internet technology because the Internet has created a strong revolution in the way of life of Japan, which was not planned, actually, but it has happened. So the point is how the government is forming the policies, how the government develops the trade policies both internally as well as externally, and which industries are open for foreign investments. So all these kinds of different types of information have to be very much in your mind.

You should follow it very religiously because that is where you will understand what strategies you have to follow, to be successful in Japan. So trade policies of the government of Japan, which are more and more suitable for foreign investments and the entry of foreign business, things are changing in the right direction. But it has to be understood which are the industries, which are the new industries, which Japan wants. Which the government of Japan has recognized or identified. So these things have to be followed up very religiously. So the idea is to focus on the new industries that the government of Japan wants to set up in Japan and for which they are open. They are ready to give support. So your focus should be to start with, if possible, on those kinds of industries, so-called new industries for Japan, maybe. So another thing is that from the existing industries, again, there are certain industrial areas and sectors where the government of Japan has priority, for example, telecom.

In recent times, the Japanese government has become very open for investments and big-ticket investments happen in the telecom sector. A very good example of a big investment was 20 billion dollars invested by Vodafone in Japan when it acquired 100 percent of the third largest telecom operator of Japan digital. So I'll talk about it more later at the end of the session. So there are industries there are sectors that are having priority of the Japanese government and things will be much easier in those sectors. But again, I'm repeating this thing, that building relationships in Japan is very, very important because many things you really cannot read in the air. So by having the right relationships, you can read many things you have to be with them. And very importantly, in the business environment where the businesses know the advantages and disadvantages of the local competition and the local networks, local relationships in the form of a Zaibetsu and Keiretsu. So zaibatsu was the financial grouping's network of these several businesses, which actually at present doesn't exist. But there is some element of keiretsu wherein the grouping of the different types of businesses is based on business relationships, among them very strong local business relationships. So how to handle those keiretsu?

You need to build the business relationship by showing them merit in your role in those kinds of existing businesses. So it is a very, very complex topic in Japan. But you need further training. Then, of course, the locals help with the right attitude. You have to have the local help. Many of the things can be taken care of by having local help, especially in the present situation when things are changing. The government of Japan is changing. New laws are being formed for the overseas workers, for their protection and their rights. So many things are changing. And Friends patience, the Japanese market requires patience, it requires big money also, which I told you, but with the big money also required is patience. If the organization that wants to do business with Japan does not have the patience and if they're looking for quick results, the Japanese market may not be a very good idea for such companies. And finally, Friends, knowing the business etiquette of Japan is very, very important. You'll find a lot of resources on this. I will give you a little information about the business etiquette of Japan in the next slide. So you'll get an idea of what kind of business etiquette is important. But that is not the complete words, which I'm going to convey to you. There can be many other things, that are easy to learn. So you need not worry about too much on the etiquette, but it is important. right?

So what are the common business attitudes, which are a little different from what we know in the other advanced countries of Europe and the USA and many of the English-speaking countries? So, friends, a very important thing is to keep lots and lots of business cards every time you go for any business activity in Japan. So in the first meeting, it is a must to have the so-called Meishi. Maeishi means business card. In the first meeting, it is a must and in general, you have to use a business card. If you're not sure whether you're exchanging a business card with the person, you should be ready to and freely share the business card like shaking hands every time you shake and probably offer the business card.

This is very, very common in Japan and one of the experts conveyed that if you do not have a business card and you are never given the business card and you're going to a business meeting, it indicates that you are unemployed. So a Friends business card is the important thing. Second, your documentation should be very intense and it should be very impressive. It should impress your company with what you want to do, you as a partner, it should give your statistics. Every documentation should be self-explanatory. And the Japanese people should not have any doubt about what you are talking about if you have the right documentation. So your documentation has to be very much perfect. The Friends 3rd very important part is the preparation, now preparation requires knowing about Japan, their way of working, and especially if you are going to the meeting, you have to plan and prepare for the travel, how you are going to travel. Most of the public transport is very punctual, unless, for example, you talk the Japanese metro in cities like Tokyo, unless there is some suicide on the track, generally, the schedules are met by the local subway. Why I talked about this? This is something I will tell you a little bit later.

But you should note down on this point that suicides are very common in Japan. So we'll talk about it later in one of the episodes of this course. But this is an important part of the Japanese society. So preparation is very, very important. And of course, the company website. So you can rest assured that if you are going to see this meeting, your Japanese partner has really, truly looked at and understood your website. So one very good tip for you is that your website, if possible, should have an option to get translated into Japanese language. If you can provide that have done a great job, you'll make the life of the partner. The meeting will go very well. So your company website in the Japanese language will do a great service to your efforts to do successful business with Japan. And then of course, the homework, homework about the company, about their history, homework, about all their products and the specifications, features of the products which you are going to discuss and about the people you are going to meet. You have to do some kind of homework to know about their credentials and their experience and what they know and the kind of experience they already have. So that kind of homework is very very important. and Friends.

Seating arrangements are a little peculiar, but that's the fact that in Japanese so had business sitting, which means sitting in a meeting room or a seminar or a webinar, there are protocols in Japan which has to be understood. Every situation has different seating and people will not tell you that you have to again read the air. But you can get some information on the net on these seating plans. Even with the SEATING plan in the vehicle or passenger cars, you will be sitting with your partner. So relationship between the host and the guest, the guest is going a better seating. So those kind of things has to be learned about Japan. Certain daily little rules exist in all countries, not only in Japan, but Japan has its peculiarities in the daily rules also for example rule of no kissing, because that is not taken very positively in Japan and no no to throwing some objects or some book or something, which is very, very common, for example, in the US market.

People show affection by throwing a bottle of beer or some book or something just to allow the person to catch it and make it something humorous event. So, that thing is not acceptable or not taken, positively in Japan. And of course, sneezing in front of people has to be fully avoided. How you can do it, you should be ready with your handkerchief in your pocket all the time if any of such things happen. So sneezing is supposed to be a bad thing in Japan. So having said, all these business etiquette, you need not worry too much about the business etiquette. Things are changing in Japan, so the best rule is to observe and learn the newly evolving business etiquette. Changes are happening in this etiquette. Also, they are learning the etiquette of the other candidates.

So a lot of changes are happening. So it is very, very important that this business etiquette has to be understood in the context of the evolving society, the changing society, and the changing perspective of both the society as well as the Japanese government. Ok.

So Friends, as I just mentioned to you, let us take one small case study about the investment in Japan. As I told you already, one of the major opportunities in Japan is the mergers and acquisitions that are happening. And that's a big opportunity, which is the federal government of Japan is also open for many industries M & A. Even though a big chunk of the mergers and acquisitions, that are happening at this stage at this time in Japan, are among the local competitors, local companies itself. But still there, is a lot of scope, a lot of gap, and a lot of possibilities for foreign investments. So friends, Vodafone acquired J-Phone, somewhere in early 2000 and this J- J-Phone was Japan's third largest telecom operator and the value of the transaction was almost 20 billion dollars. So it was a very big investment by Vodafone and a 100 percent stake was there. So it was fully acquired by Vodafone. J - Phone was the first company in Japan to introduce a camera phone. So that was a very major innovation of JPhone and which was a very big success.

But Vodafone failed in Japan after years of making mistakes and wasting time, not understanding the market, making several assumptions about the Japanese market and the local people and the recruited persons, making a lot of assumptions and failing to do the preparation and understand the Japanese customers, Vodafone failed in Japan and sold, finally, the Japan Telecom/ J Phone/Vodafone KK combine to Softbank at a much lower price and with no losses. Now, We have to look at the most interesting part of this story, and that is the facts. The fact is that the Vodafone failure had nothing to do with the closed nature of the Japanese government, which is generally alleged. Most of the foreign companies, when they fail in Japan, they blame the Japanese government. So case to case, it has to be understood what is the role of the closed nature of the Japanese government in the failure of the different companies and their involvement in Japanese business. But as far as the Vodafone case is concerned. It had nothing to do with the closed nature of the Japanese government. So it was not there.

And the fact that Softbank turned around the company within six months of its acquisition. So it is not that Softbank had any special consideration for the Japanese government or it was planned like this. There was nothing of that sort. It was purely commercial decision-making where the Vodafone failed. So I will just tell you about the two main reasons why Vodafone failed in Japan. You can read a lot of research papers on this topic, and a lot of analysis. You can read most of these research papers & analyses, which boil down to two main reasons why Vodafone failed. And those two reasons come from the lack of preparation, making a lot of assumptions by Vodafone and not understanding the Japanese market. So what went wrong?

The two reasons were the first reason was the Vodafone's failure to make further investment and where the further investment in creating a much larger mobile network infrastructure. So that was the failure. What was required was big coverage, and a lot of new investment in new equipment and technology, which Vodafone did not do, probably because they already had invested multi-billion dollars and they never had the possibility of further investment. And that is again, the failure of the planning that you're paying handsomely to acquire a company. And it may be an impulsive decision. And I do not know the facts of the case. But whatever it is that after spending 20 billion dollars, there was no scope for Vodafone to do. This critical investment in the network infrastructure. The second failure of Vodafone was the failure to offer mobile handsets, as expected by the Japanese customers who are very, very demanding.

J Phone was known for introducing the camera phone, so in the mind of the Japanese customer was always that if Vodafone had acquired J Phone, they would introduce even better features. Vodafone could observe and read the air and understand what type of new mobile handsets are required to be offered to the Japanese customer in the light of the competitors and what is happening with the other two major operators. It was possible. So that was the failure. And what Softbank did? Softbank realized that very fast. And these are the two things. These were the two gaps where Softbank invested the money and offered the right type of mobile handset. And within six months the company turned around. So it was a very major success story of Softbank, a very successful transaction of Softbank.

So friends, having said that, you know, what is happening in the Japanese market is that a it is peculiar market having unique characteristics and it is much different from the many other markets of the advanced countries, similar advanced countries. But the fact remains that it is a very attractive large market and there are possibilities, good possibilities. So friends, what are the things to look out for? Finally, the negative sides of Japan include the observed strong bureaucracy that exists. And there are reasons for this bureaucratic nature of the Japanese government. So things like getting the permits, which delays the work, or getting the utilities, electricity connection, water connection. So these things take time and of course, the complexities of paying taxes also. So these are all the result of the strong bureaucracy in Japan, then Friends, contracts enforcement itself takes a lot of time. It can take more than one year time. So contract enforcement laws are not suitable for new businesses. And we have already discussed the different types of culture in Japan, which is very distinctive.

So nothing to get alarmed. It is just that one has to understand what type of Japanese culture it is and how to deal with it. Then we already discussed the local competition the historical business network and the cartels existing in the Japanese market. Not to that extent today, but they started long back in the form of Zaibatsu, which were the financial cartels, which were broken later on. But in very recent times there existed keiretsu and to some extent, many keiretsu still exist, wherein within the group, the companies would be dealing with business dealings, even if it means being the heavy price, extra price. Even if the products are available outside keiretsu, at cheaper prices, companies would buy, and deal with each other even at the poorer terms, but just because they are part of a particular keiretsu. So these things do exist even today. Not to that extent.

Things are moving for the change and the better. And of course, the nature of the customers, which are the customers, are very demanding. They have a requirement of something. Your market research will not be able to pinpoint what they want. You have to read the air. A different type of market research is required So the nature of the customer has to be understood. And of course, we have discussed the Japanese management style, which is very, very unique. So these are the challenges. These make the challenges which have to be dealt with. And it is not difficult to deal with these challenges, but there are many positives also. So, for example, getting loans and credits in Japan is much easier than in many of the other countries, and other markets.

There are very well-defined and strong investor protection laws in Japan. That is a positive thing, along with the intellectual property rights protection laws, which are very good, and they can be enforced much faster. And of course, Japan, being the archipelago of more than 6500 islands, trading across the border, is very well developed and much faster and very smooth. So these things are very positive about the Japanese market and they can be handled much faster. Resolving insolvency is also better, much better than many of the other markets. Within 365 days, it is possible to resolve the insolvency of a company and the recovery rate in Japan for insolvent companies is almost 90 percent, much higher than the world average. The size of the market is big. The rich customers, although demanding size are very big. The possibility, therefore, of expansion of the successful model is very, very high.

A lot of mergers and acquisitions are at present taking place because of the overhaul of the Japanese economy and its business. A lot of mergers and acquisitions are happening, although most of the mergers and acquisitions are within the local companies and competitors. There are several grey areas where the possibility of acquiring and merging, Japanese businesses for foreign entities is much easier at present, so it is the right time Things are changing for the positive.

Choose the one that is best

In the next few videos, Dr. Jain has used the previous learning of this course, to build a practical profile of Japan as a high potential, large exports market.

Hello, Friends. Welcome back. So Friends, we have discussed several aspects of the Japanese market in the several sessions which we had, and some documentaries were there in this course. Friends now, we are learning about Japan. We are trying to see Japan from several perspectives. We have seen the day-to-day life of the people. We have seen the challenges and the opportunities. We have seen the management style, of the Japanese culture. Now, let us review these things and look at Japan as an export market. So some people are focusing on exporting to Japan and the mode of export can be of many types. It can be just selling the goods without really setting up any business in Japan, or it can be opening some branch office in Japan and then distributing your product or some deeper involvement. So there can be several ways of exporting goods to Japan. So if we look at it from that perspective, Friends, Japan as a country, as a potential export market. So what are the things which we need to see from this perspective, first of all, what is the business situation at present from the export point of view?

And secondly, what is the business culture of the people? When we say people, the business people, we are talking of the importers in Japan. So the people who matter to your products, who are likely to be of great help, in distributing your product, and will have an active interest in your products, in the distribution of your products in the Japanese market, depending on the customer's demand and the business situation. And another thing is that what is the situation of the banking and finance? So what support you can get from the banking industry and the finance industry of Japan and what types of organizations are available where you can look for some support either to the importer or to the exporter? So depending on some credit lines to the exporters or the credit line for the importer. So those facilities, whether they are available like in any other advanced country, these are the things which need to be looked into. When we talk of the perspective of Japan as an export market and the banking and finance sector there in Japan. And then what are the sources of information and the support which is available from any agency in Japan for setting up business in Japan? That's the point that we want to learn and we want to discuss that.

What are these steps involved in setting up of the business? What are the costs? And these whether these costs comparable to international standards like the cost involved in other advanced countries, which is of the stature of Japan? This information has to be understood. And finally and very importantly, what are the different sources of accurate and genuine information about Japan, the data, the market data, and the government policies? What are the sources of this kind of information? Who are there? What agencies are there, who are likely to support you in collecting this data and information? And not to forget, what are the channels, news channels, and the media and their presence in Japan? So these are some of the important dimensions of looking at Japan as an export market. And that is what we are going to discuss now.

So, friends, we have discussed several things about Japan from different perspectives when we are talking of the business situation in Japan and we are talking about the business situation at this stage at this juncture of geopolitics or the time we are talking about the COVID-19 pandemic. And there are many new situations which the world is facing. And similarly, the impact is there on Japan also. So what is that situation? What is the business situation at present? So, Friends, one very important characteristic of the current business situation in Japan at present is that the government of Japan is opening up even though there has been certain political instability. Mr Abe stepped down from his position as prime minister and one of his deputy and a close aide became the prime minister. And he is likely to carry forward with the Abenomics, the so-called economics by Mr Abe.

So talking about the situation at present of the Japanese market as an export market, Friends, the government of Japan is opening up. There is no doubt about it, even though there has been political turmoil and Mr Abe has stepped down from his position the policies may get some changes. But definitely, the pressure on the Japanese government is to open up the economy more to foreign investment and foreign investors, etc. and the new Japan government will always open. It is just that there are certain barriers which were not properly understood by the foreign investors so they don't do their homework. So otherwise, by design, there is no barrier which is created by the government of Japan. So it was always open, it is open and in the future, it is going to become even better. They are coming out with very good legislation for the protection of foreign labor and foreign employees and making things easier in terms of visa and business operations if any company wants to do so, including the traders who want to export to Japan. So the government of Japan is doing a lot.

They have a full-fledged department, they have a full-fledged ministry. They have a full-fledged organization to provide information and help to anyone interested in investing in Japan and doing business in Japan even as an exporter. So government of Japan, that much is opened up and it is opening. The customer, of course, is not in the hands of anybody, neither to the Japanese government, to the exporter, nor the marketer, nor the distributor or the retail chains. So customer is a customer. The customer is made up of the local culture. He's made up of his thought process. He's made up of the legacy of that place and the history of that place. So Japanese customers is difficult. But Friends, this customer, despite being very demanding, has a lot of disposable income and a lot of assets. To the extent that the government of Japan is finding it very difficult, it is not able to guide the people of Japan on how to invest the huge assets and cash liquidity, which is lying in their accounts. So people are flush with liquidity, people are flush with money.

The interest rates are low in the banks. So it has become the duty of the Japanese government to how this money is utilized. So one good thing about anybody interested in exporting to Japan, is they will find that the customers they are dealing with are full of money. But what they want is something very good, very good quality, very durable thing and very, very innovative and high tech item. So if you can provide these things, high-tech items with a lot of innovation and durability and you can assure that, how do you make it possible to understand for the Japanese customer that what you're offering is really of good quality? So that communication this requires homework, this requires planning. This requires a lot of information gathering. So that is what the people are not doing when they do business with Japan and they assume things. They think that the Japanese market is like any other market, any advanced market. So Friends with this significant disposable income and assets, the Japanese customer is one of the best customers for the exporting community from anywhere in the world, whether it is from Vietnam, South Korea, or. From China or European countries or even US or of course, India, Japan has a very good relationship with India and they're very much interested in buying goods from India. The customers only are looking for good quality products from India and, of course, from other countries. So countries like Australia, South Korea, Vietnam, and China, are the neighbors of Japan.

The logistics are much more developed for goods to move from these countries to Japan and of course, the Japanese importing points being in several islands. So they are all connected with water. So the cost of moving goods in the hinterland of Japan is very, very low. So the time required for clearance of imported goods and the export goods is very, very fast in Japan. So for all these things, along with the high liquidity available with Japanese cash, what makes the Japanese market one of the unique and top markets for the exporters and traders, whatever way they want to sell their goods? So, Friends, if we talk of the business situation at present in Japan, even though there is some kind of political uncertainty and there are thinking, that is contrary to the world view and the status of Japan as a military power, which has already declared that they cannot they are already the reclused themselves from declaring war on any other country. But they are looking for changes in this declaration and the international charters, wherein they want the right to be able to maintain a significantly practical military, to deal with the threats, that emanate from, for example, North Korea or other countries. So because of this, the political gestures and the political moves by the new prime ministers, these things will remain and many things will move politically, will move in a direction that may be counterproductive or may not be accepted by the world. So looking at the history of Japan, there exist certain doubts in the minds of the people of the world. And, you know, these political uncertainties may not have a direct impact at the grassroots level for the exporters, the traders doing business with Japan.

To that extent, the political stability is there, the transition of power, at least from Mr Koizumi to Mr. Abe and from Mr. Abe to now Mr. Suga. So what is happening is that the transition has been smooth and there has been no opposition from the Japanese people, although this particular legislation, which Mr Abe had suggested about giving more power to Japan to maintain their army for the protection of Japan, the citizens of Japan objected to this, and they also said that they shouldn't be there. But the will of Mr Abe has prevailed. This legislation was passed in the parliament. So there are certain dichotomies. There are certain difficult points on which the political drama in Japan is being played, which have certain concerns. So they are not likely to affect the business and the trading and the investments by the foreigners in Japan. Not. Now Friends.

It has to be understood the uniqueness of the Japanese market, that their business decisions are normally made on the value proposition. So whether you are dealing with the importer, whether you are dealing with a retail chain in Japan or you are creating some new kind of relationship with the existing local relationship. So whatever you are doing, friends, you have to provide the value proposition to you to show the value in your proposition. And if you can show that value in your proposition, things will move ahead. That is what is the requirement of the current business situation, which is there at present in Japan. So, of course, the present government, as I just told you, that the present government of Japan policy is to encourage overseas investors and traders to operate from Japan. The only thing is that you have to read the air. You have to understand what is happening in Japan and you have to make your own decision. Nobody is going to guide you fully.

Friends talking about the business culture, we have already discussed a lot we have discussed about Japanese culture, but yes, certain points should be remembered and viewed as well as the business culture of Japan is concerned, which is very much based on formal relationships and formal interaction and the relationship, the business relationship, the business partnerships are protocol based. So there are certain protocols, there is some planning, and there is certain homework, which is the emphasis of the Japanese people. So that remains and that is a very key feature of the Japanese business culture. So another very important thing, which are practical person can tell you that during the day, what are the meetings happening which normally do not start early in the morning. Normally afternoon meetings are there in during that time, especially with foreign parties, and foreign overseas partners. So these meetings serve the general reluctance of the Japanese partners. Providing the description and useful information may not be there. So they would be displaying some kind of reluctance to divulge many things, and they would expect you to understand those things by yourself. But the practical experience says that in the evening dinners and drinking sessions, you actually can get certain kinds of useful information. So that's another very interesting and relevant part of the Japanese culture. So if you want to make a relationship with the existing local networks, you have to focus on the post-evening activities in Japan, which is one way of entering into the relationship network of Japanese businessmen. So this is a second very important part, a very important feature of Japanese culture and the practical tip of the business culture that, of course, we have discussed several times, that the business culture, as well as the people of Japan, however indirect they are. They do not want any conflict with anybody, absolutely no conflict, direct conflict on any issues.

But their interaction is mostly indirect. So they will not say things very directly or in black and white. So there will be a lot of grey, whatever they say, if they if at all, they say something. So these will be grey. So you have to read the air, you have to understand things by experiencing them. And Friends, that is the reason in this course I have included certain documentaries to show you what Japan is so that you can read this air. You understand Japan, you say things to the Japanese people, which is close to their hearts. You show that, you know Japan, you have visited Japan, different places you have visited in Japan, you know the highways, you know the food joints, you know the main dishes of Japan. So there has to be things to talk about. Japan facts. This is one of the reasons why people shy away from talking to foreigners because they are not able to tell many things about Japan. So what would they say to the person? So business meetings are not purely on business. It is not purely on these specifications and terms and conditions of the contract.

They want to be able to talk about Japan, whatever they know, not to talk about their country because they are not very much interested in your country to such an extent. They are interested, but after some time they want you to know what is Japan. You talk to things that are close to their heart. You talk to things that they know in their world. You have to understand their point of view. So this is the reason Friends, this this course has been developed in such a way to make you learn these things in that direction.

Then Friends if we talk about the business, and business environment in the form of banking and finance support to the businesspersons, especially foreign businesspersons, they should know that Japan's financial support is very mature. The banking is very, very mature. There exist very big Japanese banks, which are either national or regional, and many, many foreign banks, international banks, which we know about, which operate in the top countries. They are they are in Japan. Of course, the three mega financial groups of Japan, which are national are Mitsubishi UFJ or Sumitomo Mitsui and Mizuno FG. These are the three major financial groups that are national. Similarly, there are regional mega-financial groups like Yokohama Financial Group Fukuoka Financial Group, Chiba Financial Group, and Hoku Hoku Financial Group.

They are the group's financial support they can provide. You can get loans, credit, and many, many of them. You have to understand this world of the different available products. As I told you, they are flush with money. They have liquidity. They are looking for people who can use that money. So this is the most opportunity part in the Japanese market to be able to get liquidity loans, credit, and the products that are being offered by these banks. And there are more than 100 regional banks in Japan and more than 20, 25 international banks.

All the big names are there. So competition between different international banks is with the local banks. So they can provide similar terms. Low interest rates, and easy availability of loans and credit. And of course, Friends. This is one of the best possible financial support that the businessperson can get in a country like Japan, or advanced countries like Japan.

Now Friend's next question is where to go for setting up in Japan, where to get this information, and where to learn what is to be done for starting a business in Japan. What are the different ways of starting a business in Japan? It will depend on your product line. It will depend on your vision, your method of entry into the Japanese market, what kind of goods distribution you want, and what kind of partnership you want. So with the complete knowledge of Japan, you have to design your strategy, and market entry strategy, and you have to set up accordingly. You will get all the available windows. So what is required to find out in this is what are the steps to set up a business, how to do this and just explain to you what are the resources which are available where you can get this information, the step-by-step flowchart of the various options where support is available. So how do you set up that?

And then what is the what are the cost of setting up a business in Japan? So some example, some information you need to get it. And what is the cost of hiring people in Japan? Because you need local people. You need personnel to operate in Japan. So what is the cost? Cost is something that has to be discussed beforehand, much more in advance because everything starts with cost only. So what is the cost of hiring and where is the cost in Japan for all these things setting up, and hiring, how does it compare with the similar cost for similar kinds of activities in other countries? So those companies comparisons, where do you find those comparisons? So, Friends, one of the best places to get information about setting up business is the organization which is sponsored by the Japanese government itself. And the name of that organization is Japan External Trade Organization, JETRO which has been working for many, many years to promote investment and doing business with Japan. And their motto is to invest in Japan. It is becoming more and more important.

This organization is becoming more and more important for international business persons. So they will tell you the steps for setting up the business in Japan. So you will get a lot of flowcharts here and through which you can see things like setting up the business of getting visas, setting up of an office. If you want to set up an office, you want certain hiring personnel-related matters. So how do you hire the staff to set up an office or a place or a residence, or do you want to construct some factory there or some warehouse if you want to set up? So all this information is available. This is the flowchart. So this complete flowchart is available on the site. So starting of the business operations requires certain work, which is mentioned in this flowchart. That is what all has to be done and only after that you your date of start of the business come. So when does it come? How does it come? All these things, steps have been explained, which are Japan-specific. So they may be different from what you do, what you do in other countries, but these are the ones which are Japan-specific and these different windows of entry or the setting up of the business are available.

Different options are available. And this website gives that. And Friends, this website also tells you about the laws and regulations of setting up a business in Japan. So they provide basic information about the laws and various procedures related to setting up a business in Japan. Or if you want to distribute your products, you will find that you will get that kind of information. Also, what are the laws and regulations which are available? I will tell you a little bit about the tariffs and nontariff barriers in Japan. So if you only want to export, you should have those. knowledge and JETRO will have a lot of information, that you can review. So they have references available. They have the consultation also available. You can consult the specialist in the business establishment and many of these services are free of cost. Then friends in another section of this department, this particular organization JETRO, also talks about the different types of visas, business visas, and what are the status, different statuses that are available for residence in Japan. So what are the entry procedures?

What is the status of the residence the relationship between the visa the resident status, and the process from the application of a certificate of eligibility to the acquisition of a visa? types of Work Statutes, Temporary visit visas, all the types of different visas, including entry permission. All this information is available on the JETRO website and you can contact us by email and also there. Similarly, they will also talk about the taxes in Japan. What are the different types of taxes? So all this available information is just a click away. So this Website, which is the JETRO dot Japan or Japan dot -- website, you can go to the site and all this information is very easily available. Then similarly, Friends there are. Areas that are covered like human resource management, application of law, and recruitment. So what are the different recruitment agencies that offer services to foreign investors with English language, consultations? So all these things. What is the template for the labor contracts? What are the approximate wages? All this information Friends have been provided on this website.

Then, The information about the trademark and design protection system, which is very good at the intellectual property rights laws, is one of the top quality laws of Japan. There are two things that I discussed in one of my earlier reports, also apart from the intellectual property rights, the enforcement time is much less so than in many other countries. So these are some of the very important resources that are available on the JETRO website. And this is the best source you can get for this purpose.

Then there are, some things that are very good on the JETRO website and those relate to the cost estimation in Japan. So Friends cost of setting up a business, you have to work out some ideas that what are the costs you will incur for setting up the business. And for this, some basic model, some basic models have been explained on the JETRO website. For example, you take this example here, which is a model case and is based on the most common type of new business operation established by foreign firms from entering the Japanese market with an initial staff of two people only. So one person from the foreign firm, it is a model, who typically serves as the managing director or the person, country manager or a Japanese and a Japanese national, which will be a manager-level person. so 2 person staff, the company makes use of temporary office to establish a corporate or branch office. This is in this example and then moves into a permanent office. All these are rented properties, rented premises and the Japan representative stays at a hotel or a monthly contractor apartment during the probation period, during the period when the business is being set up for pre-incorporation compliance there. Then he moves to a permanent residence upon completion of the company, registration, incorporation applications, and notifications completed by the professional service providers.

What are the costs? So this is the example in this particular model, is there? So one of the features of this model. 2 2-person staff is there, the office is a temporary office, for example, for three months. Sizes are given there in this model and this stay of the foreign representative in a hotel or some kind of contract or Leased accommodation. So the JETRO website says that the initial cost in Tokyo for a subsidiary company is about the U.S. dollar one hundred and twenty-one thousand to one hundred and thirty-one thousand. So this is the estimate. For a branch office, this cost can be as high as 70000 to 80000. So for the establishment of a Japanese corporation or a branch, the costs generally are as follows. If you look at the break-up, you will find that the different types of costs are there. Cost to register the company name seal of the company, professional fees for the company, registration, and notification. So all these costs are given to Friends. And so this particular table is for the company establishment and tax notices and the professional fees paid for that and then infusing the paid-up capital, so paid-up capital, that amount has to be as per the protocols has to be added. Then the cost related to the visas. So those costs have been calculated.

Then setting up of the office is given there. Rent for the temporary office includes this security deposit also. Monthly rent. And what is the monthly rent? This information is given and security deposit in the real estate brokerage. So this total amount is given there and hiring of the local personnel again is about 20000 U.S. dollars and the break up is given there for what purpose? This amount has to be paid. And of course, the setting up of the housing for the foreign national, the person in this example, there is one person. So his cost of setting up in USD is given there. the total comes to six thousand, approximately six hundred dollars. So these costs are given there, which are based on the experience and the practical knowledge of the JETRO. And it says that in this model, their research says, that when you compare the business cost in Japan, when compared with major cities in the world, you find that the costs are not huge. So this is, for example, the cost of Tokyo, and in smaller cities, other cities which are not as big as Tokyo, Osaka, Nagoya, and Yokohama, you will find that the cost is even less. If you compare with cost, for example, the Hong Kong office rent and the personal expenses you will find there comparable or maybe less like, for example, in Hong Kong, real estate.

Office rents are much higher than in Tokyo, even though Singapore is quite comparable, In New York if you compare it with New York, the biggest city is Tokyo, which is much better. The costs are much less, even in San Francisco. And if you compare it with London also, it fares better even it fares better than Paris. So these are the big cities where people set up businesses. They maintain their offices, they maintain their subsidiaries. And when you compare these things, so it's not a very, you know, prohibitive kind of city. So that is what the JETRO has learned from its experience and it has compared the office rent or the personal expenses for different cities. All this information has been provided. So Friends in this course. My idea was not to give you all these figures or the data on the Step-By-Step information.

My idea in this course is to tell you the resources and places where you can go and get this information in a very positive way and in a very accurate way. The genuine information is based on long years of research and prepared by experts. So this information, for example, a friend from JETRO is available free. You can even send emails and you will get answers to many of the queries which you may have, which you are not able to get on this website. So, Friends, this is good. And why it is there? Because Japanese government wants business people to do business with Japan because Japan needs foreign partners. The Japanese companies are best prepared for international platforms. They are the most internationally oriented companies.

So Friends, the next point, that I want to discuss with you when we are considering Japan as an export market, and potential export market, we are trying to learn what are the different sources of information, because that is where you can do your research. As I mentioned to you, the most critical action to be taken by anyone interested in the Japanese market is to do a lot of planning, a lot of information gathering, and a lot of preparation. So to do that, the most important thing to learn and to get the information about is the different sources of the different types of information. For example, if we talk of government, business, and trade information, the information related to government policies, information related to the support which is available from the government of Japan and the business associations, the Chamber of Commerce, the support and benefits of membership to the different associations and the particular trade, like, for example, automobile, electronics. So what are the sources of information related to a domain-specific requirement business-specific requirement or government-specific requirements? So the most useful resource for this, Friends, starts with Japan's external trade organization.

That is JETRO. If you remember, I had to in my last session, I talked about the JETRO which is the finest and the longest-serving organization for increasing the trade between international investors and Japan. It is the most authentic source of information on Japan. So we had already gone to that website of JETRO. Let us look at this again. So this is the JETRO website, which is also available in the English language. So when you convert it into the English language, you will get all the information in the English Language. So JETRO is the one window source of all types of information, including that of exports or the overseas expansion or investment in Japan, which are related to WTO or the innovation startups, cross-border EC, or standard certification regulation, IPR, utilization of global human resources, B2B business and import. So everything at one place you get in JETRO and if you want some information which is specific to your country of origin, you can go to Asia, you can go to North America, you can go to Europe and see if there are any specific requirement of certain countries or some agreements.

Are there any trade agreements, maybe there with some European countries, some agreements maybe there in the Russian CIS? So that information, all these data statistics are available on the JETRO website, and if you explore the JETRO website, you will find a lot of information. It is the first stop for starting your preparation, planning as well as information gathering. The Friends Ministry of Economy, Trade and Industry also provides a lot of information. So the link I have given for all these sources, if you look in the resources section of this lecture, you will find the external links to all these resources, then Minister of Finance, Ministry of Foreign Affairs, the Ministry of Internal Affairs and Communication, Indian Chamber of Commerce, Japan and for Indian exporters, Indian Trade Portal is also a very good portal where you can get a lot of information of not only Japan, but many of the countries trade with many of the countries of India. So as an exporter from India, you can take benefit of this particular website.

Now friends. If we look at the links and the sources that are related to banking, financial institutions, and certain associations, the Chamber of Commerce. So you will find the link for the Japanese Bankers Association, the Regional Banks Association of Japan, the second Association of Regional Banks, International Bankers Association. As I told you there are around 20 to 25 international banks in the world. The top names of the world are present in Japan. So you can get a lot of information about the member banks of the association, i.e. international. bankers association. The Commodities Futures Association is available for Japanese people only, so if you hire somebody locally from Japan, that person can gather information from this source also. Then the General Insurance Association of Japan, the Investment Trust Association of Japan, the Japan Financial Services Association, the Japan Securities Dealers Association, the Japan Venture Capital Association, the Life Insurance Association, Japan Private Equity Association.

So there are so many associations. If you explore information with all these resources and friends, you will become very, very confident about Japan and doing business with Japan. So what you will learn in this course, you will be able to amplify your knowledge by going to these websites, these resources and very good information can be gathered. Tha=en friends. You should also subscribe to the English versions of the Japan Times, Asahi Shimbun, Japan Today, News On Japan, and Metropolis. This is very, very important. So for example, I will show you the Japan Times. The English version is available online. So what type of information you can gather in, for example, Japan times? So as you can see here, friends, a lot of information is available and it can be very, very useful. The national news is there. then opinions are there all about Japan. Very good place to learn about Japan and what is happening in Japan, the political situations, political changes, business changes, or any government policy towards trade. And what is happening about the business with other countries, neighboring countries, maybe China or South Korea, and what is happening in the geopolitics? All these editorials and articles are available, many of which are free. But you can also subscribe to the paid version and also for all these publications, online publications, and newspapers. Then there are many printed resources also available for doing business with Japan. Some of the best-printed versions of the sources which are available are from JETRO. That is the Japan external trade organization, so very famous directory, which is available for doing business in Japan. For example, in this case, this is available in the business reading room in the US. But every country has its central trade libraries.

You have to find out in your country where you can get trade-related information and resources and you will get you will get the directory of doing business in Japan published by JETRO. You can also go to any of your country's Chamber of Commerce with Japan and you will get this printed version of the directory for doing business in Japan. So this is one of the most authentic printed resources for researching Japan. Then friends, the problem with the printed versions, but mostly they are very old versions. You will generally not find the latest versions of the printed resources, but they are very, very important and very useful in getting information, for example, the Directory of Japanese databases in 1998/99. It is published by the Database Promotion Center of Japan. And mostly you will find this particular printed resource in your country, a specific central library or Trade Promotion Bureau or the Japan Chamber of Commerce in your country. So you'll get this printed resource. Then the Japanese handbook, which is published in London, Chicago. So Japan Handbook has a regional series also, which is called Regional Handbooks of Economics Development Prospects on the 21st Century. So this provides an overview of the economic and social development of Japan, with particular emphasis on the second half of the twentieth century. So it is a little historical perspective. You will get on this, but you'll get to know Japan better. So what we have tried to do in this particular course, is something very similar that we try to acquaint you with Japan. So with the addition of the knowledge, you gather from these printed sources, you can improve your knowledge about Japan. manifolds So friends, you have another printed resource, which is called Japan Shinbun. This is very, very commonly available and it is a comprehensive data and useful descriptive information provided for all aspects of contemporary Japan. So it has got special reports. They may be a little older. This is a very, very interesting reading for understanding the Japanese economy, Then friends, the Japan Trade Directory was again published by JETRO. It is also generally available in your country, central trade library or Chamber of Commerce library. So you can find out if you search, you will easily get Japan Trade Directory. And then friends. Similarly, we have more resources. Japan Company Handbook, then a directory of banks and companies registered in Japan and friends. Many, many such printed resources are available. If these resources which I have just shared with you are not enough. You can explore many, many resources.

The other Internet resources that I already mentioned. When you go there, they will explain to you what printed resources they are offering in the market. And you try to get that information either from the Chamber of Commerce in your country or your country-specific trade promotion bureau. You can also go to the trade consulates of Japan in your country to get access to these printed resources. So, friends, these printed resources cannot be ignored, along with the Internet and online resources, which I already mentioned to you.

Now friends the next very important thing to understand is that what are the trade barriers for the exporting community from anywhere in the world, you may be originating from any country. We have to understand that what are the different trade barriers which are there in Japan and understanding the tariff and nontariff barriers is very, very important. So if we talk about the tariff barriers in Japan, typically they are based on the ITC HS code. They are based on the CIF value. That means the tariff rates are based on CIF value as per the INCOTERMS 2010 and 2020, and friends, Japan maintains tariffs and restrictions on items including agriculture items. So there are certain restrictions available, for which import licenses may be required. In addition to these restrictions and tariff rates, Japan has free trade agreements with many countries. For example, with India, they have the India-Japan Economic Partnership Agreement of 2011, which was valid for 10 years. That means it is valid till 2021. And the agreement abolishes duties on trade on both sides, on almost, 90 percent of the items, which are traded between India and Japan. Similar free trade agreements exist for other countries also. So you have to find out with your specific country of origin what the bilateral free trade agreement exists with Japan. So against those agreements, you may get a lot of benefits from the import duties, and the buyers will be interested if the value proposition is better than in other countries.

And friends GSP, which is a Generalized System of Preferences, is available as per the tariff policy of Japan, which means there are concessions in duties for the goods that are coming from developing countries. And friends, a very, very interesting thing, and an important thing to know about the Japanese tariff system is that they have a system of self-assessment. Now, what happens because of this self-assessment system, the speed of clearance of the goods at Japanese ports for both exports as well as imports gets expedited. So Japan has one of the smoothest import-export clearance systems, on the ports, and it takes a few hours to import goods and very limited time for exporting the goods. So friends, Japanese infrastructure is among the best in the world and the tariff barriers are not prohibitive. These are in line with the other countries and very much in line with the World Trade Organization guidelines. So, for example, if we look at the Japan Customs tariffs, we can have a little look at that. So, for example, you can see here that the Japan tariff schedule as per ITC HS classification, is confined to 97 chapters. And if we try to pick up any product, like, for example, if we take the example of pharmaceutical products, so let us see what are the tariff rates and you will find that the tariff rates are country-specific. Also, you can see the particular item here, which is shown here, in Singapore, if exports to Japan, the duty is free. Mexico exports, duty is free, Malaysia exports. duty is free Chile exports duty is free, Thailand exports duty is free. So country-specific tariffs are also there. GSP tariffs are also there. So WTO tariffs are also there. So all this classification has been done in the tariff system of Japan and this is accessible to everybody. So on this particular website, the link I have given in this lecture's resources section, you can go there and you can review all the tariff rates of different items, even up to eight digits of the ITC HS code. You can get the information. Now, talking about the nontariff barriers in Japan.

The market access barriers are there and it is generally perceived by the people, who do business with Japan, that there are a lot of market access barriers. But the fact remains they are mostly informal. For example, I have already told you about the existence of local relationships, and local groups, and sometimes they are called cartels. So penetrating these relationships becomes a little difficult for the outsiders, because of the lack of preparation. However they are not formal, so they are not recognized by the Japanese government. They are informal. So local networks or the market share, like if some companies have better market share. So penetrating that market share may be difficult. It is not by design of the government of Japan, but it exists there and the product quality assurance, which the Japanese customer demand. So really, it is not in the control of the Japanese government or any other entity. So these market access barriers exist and they are unique and they are very distinctive when compared with other markets, but they are the result of the Japanese culture, Japanese life, the Japanese legacy, and the demography of Japan. So these barriers are not the formal restrictions of the Japanese government.

It is not so. So to deal with these barriers, your preparation, your observation, and your planning are very, very important. Now formal restrictions are there, but they are mostly for agricultural products, which is the case in most of advanced countries. whether these are Western European countries or North America. You will find restrictions in many of the agricultural items and it has become a kind of norm in most of the advanced countries. Then friends, customs laws and regulations, and import processes in Japan are strict and therefore these need to be clearly understood if you want to succeed in Japanese business. Now, import licensing may be required for some imports. So that list you can get from the JETRO website. Foodstuffs must have a sticker attached to each package showing a detailed description of the contents.

Many food and consumer products are subject to very specific labeling requirements. So these are some of the things which can be managed and handled. So, for example, the special labeling regulations apply to things like electrical appliances, soap, aluminum foil and plastic films, some kitchen utensils, cleaning materials, toilet and bath fittings, certain furniture, hot water bottles, and cosmetics. So these are mainly the items that are subject to the special labeling regulations.

Choose the one that is best

In the next few videos you will find a discussion on an interesting recent case study about establishing supply chains for premium quality of Tuna exports to Japan. At the end of the case study an assignment is provided for the students to review their learning about Japan through this course.

Hello, Friends, welcome. So Friends, in this episode, I'm going to discuss with you one case study, which is related to exports of Tuna fish from India to Japan. So, Friends, this case study is about Mr. Gupta of Gupta Enterprises, who is based in Mumbai. So Friends, let me tell you that this particular case study is inspired by real events, but the names and the locations and other things have been changed. But the technical facts are based on the real incidents. So, Friends, the idea of this case study is for education purposes, for learning, and for a better understanding of the concepts. So, Friends, this study is about the Tuna exports from India by Mr. Gupta of Gupta Enterprises, which is based in Mumbai. My friend Mr. Gupta has been in fish exports and the fish related products exports for more than 15 years. He was already exporting to countries like the US and, the UK. But he was very, very keen to get into the Japanese market, which for some reason he was not able to get the business, he was trying to contact a lot of Japanese importers especially, he was interested in exporting Tuna because that was one thing which he was already exporting to US and UK and few other countries. And he got a very good response of overseas buyers for his Tuna business. So he wanted to expand his Tuna business to Japan and he was trying for the last four, or five years, but he was not getting into the Japanese market. He was not able to understand, that why he was not getting the response. So later he realized that to enter into the Japanese market, he needed to understand the market. He has to understand the importers, the culture, and things that may not be related to fish, but about the Japanese market, the Japanese business, and how business is done. So after a long time, he realized that he had to learn everything about Japan, and then only he would be able to understand how to get into the Japanese market. So, Friends he studied about Japan, he studied about the business culture of Japan. He studied the Japanese government policies and several case studies about the Japanese market.

And within three, or four months, he felt confident about dealing with the Japanese importers and how business happens in Japan. Then he realized that somewhere he was making a mistake, he was not able to create the right strategy for expanding his business into Japan, and he was now more concerned about it. So he was looking for a good opportunity, in the sense that he understood that the normal type of Tuna business, the Tuna fish, which was exporting of quality, which ranges from 1.5 to 2 dollars per kg, probably is not the product which is going to offer to Japan and to make an entry. So he understood that Japanese importers require premium quality with the value proposition. So he was looking for that very important formula and a product which he could convince the importers of Japan that it is a unique value proposition. So he was looking for the right supply-side opportunity. So once he was looking at the business advertisements in one of the leading newspapers in India, He saw an advertisement for the Lakshadweep Administration. India, which was trying to promote the Tuna fish exports of the Tuna fishes harvested in Lakshadweep. Friends, this Lakshadweep is a group of around 35 islands, which is the Union Territory of India, which is almost 250 to 400 kilometers away in the sea from the western coast of India.

So it's a very unique area, with a very small surface area, landmass just of 32 square km, if you include the area of all these 35 islands. It is a very, very small, Union territory of India. But in the Lakshadweep population, only 10 islands of the 35 are inhabited. Rest are not having any human population. They are dependent on the fisheries. And there was a seminar that was going to happen in Lakshadweep, which is to be delivered by the Fisheries Department of the Lakshadweep Administration. And they invited the people who are involved in the Tuna exports and the fish exports. They were invited to that seminar, by the Lakshadweep Administration. So Gupta immediately sensed an opportunity. And he registered for the seminar, which was to be held in the next one week time. He booked his ticket to Agatti Island in Lakshadweep, one of the hotels there, in that particular island, where the seminar was to be held. So he visited Agatti and this Agatti Island had an airstrip, the airport is there. And this is the hotel where this seminar was to be held. And this island is a very, very small island, just 7.5 km in length. And the width is just 1.5 kilometers. So it's a very, very small island. I will just show you that it is so small an island. You can see it here.

This is Agatti Island. And you can see this is the one extreme of the island. And from this tip to the last tip, where the airstrip is there. So it is a small island and you have got Agatti Airport here at the end. So this, from one tip to another, it is just about 7.5 km. So it's a very small island. And this seminar was to be held on this island. And Gupta booked the Hotel for 2 days. It is the same hotel where this seminar was to be held And he took the opportunity to visit this place, which he had never visited, in the past. And he was very keen to attend the seminar. So friends, in the seminar, Mr. Gupta found that the things which were presented by the Lakshadweep Administration, Fisheries Department, were very, very interesting. What they said was that the Tuna, which is harvested from the 20,000 sq kilometer catchment area, the sea catchment area of the Lakshadweep Administration, which is quite a bit, and it has the potential to harvest approximately 100,000 tonnes of Tuna fish every year. The unique thing about this catch is that because of the lack of any industries in Lakshadweep on these islands, a very small population is there, just around 70,000 people out there, who are mostly doing deep sea fishing. And this catchment area has Tuna and sharks. And almost 100,000 tonnes of tuna can be easily harvested in this area.

The beauty is that because of the lack of industries, there is no pollution, there are no chemical contaminants in the sea, and it is organic harvesting of the fish. That is the tuna fish. The second point, what they told in the seminar, was that the methods used by the fishermen of Lakshadweep are traditional. And they are internationally certified as the organic and sustainable harvesting of Tuna fish. So this is a very good selling point, although the price of Tuna from Lakshadweep is higher than the average price which is available from other places. So, for example, approximately on average, if the price of Tuna, from other mainland places in India, if it is available for INR 125 per Kg, the price of Tuna fish in Lakshadweep would be anything near INR 200 per kg of Tuna. So it is high price. But the quality is premium, the variety is premium, it is organic, absolutely free from chemical contaminants. And with a tag internationally recognized tag, the fish, wild catch, is sustainable and traditional. So this is something Gupta was looking for, This opportunity, Gupta was looking for. So he extended his stay. After the seminar, he talked to the people about how to go about it and what things have to be done. He did some research in Lakshadweep. He made friends with some of the people in the Fisheries Department of the Lakshadweep Administration. And with all the information and data, he came back to Mumbai.

And what he was trying to do now, was trying to share this information with his Japanese contacts, with whom he was in touch for a very long time. One of the Japanese contacts showed interest in this new opportunity, which was of Lakshadweep variety, organic Tuna. He also said that according to his research, the handling, which is very, very important in Tuna fish, as soon as it is caught, it has to be handled in a fashion that the skin color or any other feature of the fish does not change. It remains the original color. So these things when he mentioned to his counterparts in Tokyo. So one of the people invited Mr. Gupta to Tokyo for a presentation with his group of importers. So he realized that this was a good opportunity to present the whole idea and value proposition. He prepared himself and proceeded to Tokyo with a direct flight from Mumbai, and he reached Tokyo and he reached Tokyo. So friends at Haneda airport in Tokyo, he was greeted by the person who had shown an interest in his proposal, and he was received by the person who took him to one of the hotels, in Tokyo, for a meeting cum presentation. And he had arranged the group of importers, a consortium of importers which were mostly based in the world's biggest fish market that is Toyosu. So friend, Mr. Gupta, along with the person, went to the hotel and settled down for the day because it was already late. He started preparing for the presentation the next day. So Mr. Gupta went to this hotel. This hotel was in the airport complex only, Haneda airport complex only. And he started preparing for the presentation the next day. So Friends, he was making sure that the presentation the next day, would be perfect and he had made his presentation in such a way that whatever he learned about the Japanese market and Japanese business, he wanted to incorporate the real value proposition and he wanted to deal with Japanese importers. And this was his dream for the last more than five years. And tomorrow was the day when his presentation will make it possible to realize his dream.

The next day, he was picked up by the person, the partner who had shown interest in Mr Gupta's offer, and they were heading towards the Toyosu market. Toyosu market in Tokyo is the world's largest market, and it is a very, very modern and sophisticated market complex, which was built in 2018, replacing the old Tsijiki market. So the name was changed to Toyosu. And this market is very, very famous market. Finally, they reached this market, this market complex, a very big complex. It is almost 400000 square meters complex is there, the new complex, new market. It is a very, very big complex with auction halls, and wholesale market, and a retail market. So this is Toyosu market, which is the world's largest complex of fish markets. So Gupta was impressed with this place and the person, and the other person had arranged to have this presentation by Mr. Gupta in one of the conference rooms in this market because most of these importers have their offices in the Toyosu market. So, Friends, you can see from here that below this particular floor, you can see that a lot of fish stalls are there.

These are wholesale stalls, actually friends. So from both sides, you can see these stalls. So the visitors are not allowed actually to go in the hall because of the hygiene reasons. But this is the viewing gallery from where you can see these stalls. So there are many booths there and auctions also take place of the fish in this area. So you can have observation of these halls, from these types of windows, in this gallery. So this is a very, very big and very modern market of Japan, the largest fish market. So Mr. Gupta presented in front of about five, or six importers from the Toyosu market and explained that the Lakshadweep variety of Tuna, is organic, without any chemicals, and he can offer a daily supply of at least 5 tons of fish, every day. And that was very, very attractive. There was visible, there was interest in the Japanese importers, but they were not divulging what was going on in their minds. So the presentation of Mr. Gupta went on for almost three hours because Mr. Gupta gave a lot of facts and, a lot of statistics. He explained that the Tuna exports from India to the world and the Japanese market, which is the biggest market for Tuna, for India, is almost 20 billion dollars per year. And it's a big business, he was talking about. He also explained the details of his business, which he was already doing with the U.S. and UK on Tuna exports. This particular Lakshadweep variety is of premium quality. It is a little expensive And it is going to be a very, very interesting business for the importers. He can even offer the exclusive arrangement of selling the Lakshadweep variety, through his company, to this group of importers if they assure 5 tons buying quantity for export by air from India. So with all these details, with all these facts, he tried his best to convince the Japanese importers and tell them the merits of the case and what is the value proposition. And he also indicated approximately what price he can give CIF Tokyo for the tuna of Lakshadweep, which is of a premium quality. So after that, the Japanese people did not indicate what was going on in their minds. So the person who had invited Mr. Gupta joined Mr. Gupta and went with him to his hotel, back to the hotel. And on the way, he explained to Gupta that they require at least two days, to decide on any trial orders or initial orders or any commitments.

If Mr. Gupta was willing to wait for another two days, it would be a good idea for Mr. Gupta So since Mr. Gupta was trying this deal with Tokyo importers, Tokyo is the biggest market for Tuna, in the world. And where he was here in Toyosu Market, which is the biggest market for Tuna in the world, of not only the fish it is the biggest food market in the world, actually, the most modern market in the world. He was so impressed with this and it was a dream for him to do business with Japan. So he said 'absolutely no problem'. He extended his stay for another two days and he said, I'm ready to wait for the final answer and if any negotiation has to be done. So this is what happened. Friends.

So, friends, Mr. Gupta stayed in Tokyo for two days and he visited some very interesting places with some of his other business contacts his visit to Tokyo was his first time. So he wanted to see certain places in Tokyo and he spent a good time in Tokyo, learning about Japan, about doing business with Japan. So it was a little longer wait. For two days, he was just waiting for any confirmation from the importers, from Toyosu Market. So, Friends, in the evening of the second day, he got a call from his main contact, the main importer, and he wanted to meet him for dinner in one of the restaurants Gupta went there, as was advised by the contact and the contact told Gupta that the Five Importers Consortium is willing to do this business. He gave a sheet, the final sheet, which was finalized by all the five importers of the Toyosu market. And they were keen to start a business and they wanted to start the business with a daily supply of 5 tons for 90 days. And if everything goes well, the duration will be extended further So this is what he told me. So friends the the sales sheet, which was given by his contact in Japan, from the Toyosu market, said that the consortium is willing to offer a price of yen 1000 per kg of the Tuna fish of the Lakshadweep variety, and they are willing to give the order for 5 tons daily supply which was to be sent by air with direct flight from any major Indian airport to Tokyo. The validity of the contract is six months. But the supply is valid for 90 days only. So this is a trial order kind of thing. And if everything goes well, it was told orally that the same will be extended. Now the payment terms offered were 15 days supply value to be paid as an advance on a C&F basis and balance by direct bank transfer 15 days after the last AWB date of the 30-day supply. So every 30-day supply, whatever is the last day. the 30th date of the AWB will be calculated and within 15 days the balance will be transferred directly to the bank. So there is no letter of credit in this. There were other conditions. The use of straw packing material is prohibited. Proposed packing should be cleared with importers as they have definite preferences. And the same, he clarified, person clarified, that it will be cleared by the importer, by some videos which will be sent by Mr. Gupta even before the shipment. So that thing will be cleared with the packing details. That has to be discussed. So goods should be marked according to normal commercial practices with Metric weights and measurement only. Japanese translation text to be faxed about the markings, on the packages. Certificate issued by any approved authority in the country of origin, which means India in this case, stating that the animals were free from designated infectious diseases. So homework Gupta had already done And he knew about this formality because of a similar formality he was already doing for the USA and UK. Faxed signatures are not permitted. Typing and other errors in documents should be avoided at all costs, as these often result in serious delays and complications at the point of entry in Tokyo. Then the documentary requirement, as mentioned by the importers, the Commercial Invoice is required. A minimum of three copies. Must be signed by the supplier and include the following details: Marks and serial numbers of the packages, description, and quantity of goods. CIF value there was a mistake here. So it is C&F value. So this correction was made by the contact. And he said that he would send the other copy. So this is C&F value. The place and date of preparation, destination and consignee, name of the vessel, and import license number, will be provided by the importer. And conditions of contract relating to the determination of the value. It further says that it is strongly recommended, whenever possible, to include the HS Commodity classification of the goods to be imported. Complete invoices and packing lists should be forwarded promptly to the importer by airmail. About the Insurance. The proposal said that air insurance from the main Indian International Airport to Tokyo was not to be paid by the seller. So that's why it is C&F. The copy of the insurance certificate against the recurring insurance policy will be provided by the importer. So Friends, the note further says that the AWB is required in 10 copies- one original and 9 copies of AWB, required to be sent by airmail, to the IMPORTER. fax copy to be sent without delay after shipment. Packing list 2 copies. Certificate of origin required for GSP concessions issued by the diplomatic officer in the Japanese Consulate in India.

Other requirements. Health certificate from the country of origin, by approved authority. In this case, it is the Fisheries Department of the Lakshadweep Administration. Complete text the representative video of the fish catch and and the video of the handling of the post catch were required. And this formality was only one time. No food additives are to be used at any stage. Chemicals presence in the fish has to be analyzed and the requisite certificate has to be submitted. So this was the note, which was given to Mr. Gupta and it was said that this note is valid for 7 days and Mr. Gupta can review the note. And if he thinks that any discussions are required. So he was told that after reaching India or wherever he is, he can enter into a Zoom meeting. He can arrange a Zoom meeting, in case any doubts are there or any further changes are required, in the note, You can either send it by fax or the contact person can also arrange a video conference meeting with the importers. So, Mr. Gupta was given this note and Mr. Gupta thanked the contact person, the main importer who had been in touch with Mr. Gupta for a very long time, and he knew him quite well. So Mr. Gupta left Tokyo the same night and came back to Mumbai. Now, friends, there were a lot of things that were going on in the mind of Mr. Gupta. He looked at this note several times and he was trying to understand that what would be the challenges in this particular offer. He had almost seven days to reply, to confirm the business And he was quite happy that at least he had got an offer from the importers. And that's a very concrete offer because it was on the proper letterhead of the importer's consortium and signed by all the importers. This note was signed by all the importers. So he was quite upbeat about this business and he never wanted to leave any stone unturned about this. So what he quickly did, was he looked at the cost angle of this offer and he prepared this cost sheet. So according to this cost sheet, C&F Tokyo's price offered was Yen 1000. So this comes to approximately INR 680. Cost of buying ex Agatti airport, export packing already included in this.

With the requisite handling by the Lakshadweep fishermen, who are to be trained in the handling part, which Gupta had already discussed with the Lakshadweep Administration and the Administration fisheries department was ready to help Mr. Gupta in this. And this handling of the catch was very, very important part, and this training was also very important. But this was a one-time training for a group of fishermen who were part of the cooperative of the fishermen in Lakshadweep. So this price was likely to be less than INR 200 per kg because it was just an indicative price. And he did some research on the price, which can be kept below INR 200 in the foreseeable future. Unless there is some major jump in the price, there is no chance of exceeding the price of INR 200 per kg, after he discussed with the Lakshadweep Fishermen's Cooperative Incharge and the people who are the big fishermen. So this price was very much possible and doable. He could even negotiate further little bit on this. And he discussed with the airlines, which are operating from Agatti airport. And what he found, that a very comfortable price of INR 50 per kg INR 50 per kg is possible from Agatti to Bangalore airport by chartered flight. So the national carrier, that is the Air India Alliance was willing to do this and they were offering this concessional price, given the difficult cargo in this for the simple reason that they had the idea that the flights which would be chartered and going from Agatti to Bangalore, will return with the essential commodities for these 70,000 inhabitants of the various Lakshadweep islands. So they will be able to cover the cost of a return flight. So that's why they offered a very attractive price of INR 50, which could be a little bit negotiated further.

There was a scope in this price. And the Banglore to Tokyo cargo flight, Mr. Gupta was able to get the price of 360 Yen per kg. It is the initial price. There was a scope for negotiation in this, looking at the daily supplies and the bulk cargo. So he got the price of INR 245 per kg and he calculated the other incidental costs, training of the fishermen and the documentation charges, certification charges, and the Fisheries Department formalities and all those things. He calculated that the price should not exceed INR 5 per kg, on the other costs. So total costs to Gupta, delivered at the Tokyo airport come to INR 500 per kg, as against the receipt of INR 680. So Gupta was making a clean margin of INR 180 per kg, which comes to a daily profit for 5 tons supply, every day to around INR 900,000. That is 9 Lakh Rupees, for the daily shipment of 5 tons. So this was the very basic calculation. So there were challenges in this for the simple reason that this deal was being done for the first time. The customers in Japan are very demanding and he wanted to make sure that the order continues after 90 days. And he was now quite upbeat about this deal. And he was looking at this deal from both the future and the current profits. However, he was in a dilemma about the possible challenges and the cost overruns or the documentation part which is mentioned in this note, which he got from the consortium. So, friends, Mr. Gupta took almost two to three days to review the note think over it, and talk to many people. He even visited the island again and talked to the Fisheries Department there and talked about the difficulties and challenges which are likely to be there for the trial order, that is for 90 days. So focus was this 90 days at the time.

The Fisheries Department of Administration was willing to give all possible help in this regard. So now Mr. Gupta had to decide whether to go ahead with this deal. Or say yes or no. So friends, this particular case requires good brainstorming, looking at the Japanese market and the things that are learned in this course, I would like you to attempt the next assignment, which is given after this study, in the next lecture, and you attempt this assignment and submit your answer in the assignment section in the requisite area. And the same will be reviewed by me. And if you want to see the answer after my review, the answer and my solution to this dilemma I have presented in this assignment. At the end of this assignment, you can see the video that I uploaded about my views on this deal and what could be the challenges and what is the opportunity in this deal. So these things you have to convey the challenges, the opportunity. And if you feel that this cost estimation is not correct.

If there are any errors or overruns. So that thing you can mention in this assignment. And friends, also, about any challenges with regard to the documentation and procedure which is required for Tuna exports to Japan. And as mentioned in this, Proposal Sheet/Sales Sheet those challenges also have to be analyzed and mentioned by you. Thank you very much.