Starting a business in the United States is a difficult process that requires the owner to think about many things before starting their business. They need to consider the demand for their good or service, the location of their business, the pricing of their good or service and many other factors that go into making a business successful. Starting a business in the United States might seem like there is a lot to consider but starting an international business brings up many more things that need to be consider.
The owner need to think about the other countries culture, economic system, the demand for their product, the language barrier and many more variables that make international business very difficult.
Mike’s Bar and Grill Company Expanding to Japan
Mike’s Bar and Grill currently stretches across the whole United States, with multiple locations in every state. The owner is currently thinking about expanding overseas but he is unsure of what country should he start in first.
He wants the people of this country to enjoy the bar and grill atmosphere that might not be available in their country. He also wants to ensure that his new business is going to be successful in this country. He decides that he wants the new business to open up in Tokyo Japan because they currently have a larger demand for American bar and grill food such as hamburgers (Bleakly). Now he must think about the governmental restrictions that either the United States might have about companies expanding to Japan or restrictions Japan might have against businesses expanding into Japan.
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Currently there aren’t any restrictions imposed by either country on a business expanding to Japan. There are many other things the owner of Mike’s Bar and Grill is going to have to consider, but so far Japan seem like a great candidate for the owner to expand to first (Japan).
The next thing the owner of Mike’s Grill and Bar should consider in the labor and employment laws in Japan. In Japan when a worker is hired they are expected by the company to work there until retirement and the workers believe in this same concept. This is called life time employment and most of the people in Japan agree with this concept (Miller). Life time employment cause many of the labor laws to be in the workers favor. This is done in order to try to make a positive and long-lasting relationship between the employee and the employer. Also, there is no “at will” employment in Japan (Miller). This means that if an employer wants to get rid of a worker they need to have valid reason for the termination of that employee. Most other laws are relatively similar to the labor laws of the United States.
Labor Laws and Culture in Japan
The owner should also consider the Japanese culture. The Japanese culture is drastically different for the culture of the United States. They have many societal beliefs that are completely different and foreign to our beliefs. An example of this is the belief that a person’s face must be preserved. This means that turning down a person request causes embarrassment and cause the other person to lose their face. This is a huge deal to Japanese people because their face is a sign of dignity. If a person loses their face the most regain it through praise and thanks (Japan Guide). The Japanese culture also has a huge focus on body language. They use body language of other people to tell them how the other person is feeling. Expressions, posture, and tone of voice can all give off an impression to someone. Body language is such a big deal to them that they trust a person body language over what they are actually saying most of the time (Japan Guide). There are many other cultural differences between Japan and the United States; the owner of Mike’s Grill and Bar would have to do extensive research on Japanese culture before expanding their just to make sure that they aren’t giving off the wrong impression or breaking a cultural norm.
Methods of international business in Japan
Then next thing the owner of Mike’s Bar and Grill must consider is what method of international business are they going to establish in Japan. The owner of Mike’s Bar and Grill can choose to enter using licensing, joint venture or totally owned facilities. Licensing is if Mike’s Bar and Grill made an agreement with an already establish firm in Japan that gives the firm the right to use Mike’s Bar and Grill (Pride, Hughes, Kapoor). This allows the owners to collect a royalty on the business without have much risk involved. But the owners wouldn’t have much control over running the business and making the experience authentic. The owner decides not to choose this choice because he really wants the people of Japan to enjoy his authentic American bar and grill. The next option is a joint venture. A joint venture is working together with an already established firm in another country in order to have instant market knowledge and access (Pride, Hughes, Kapoor). The owner of Mike’s Bar and Grill would work with a current bar and grill in Japan in order to make more authentic and more similar to Mike’s Bar and Grill. This would allow the owner to make a percentage of the firms profit without a lot of risk. But again the owner of Mike’s Bar and Grill wouldn’t have much control over the business. A joint venture would also require a lot more commitment than licensing. The owner of Mike’s Bar and Grill decides not to use this option to enter business in Japan because he wants to establish his own bar and grill so they can truly give the Japanese people an American experience. A totally owned facilities is the opening of a firm in a new country by the owner of the firm and the owner has complete control over the firm (Pride, Hughes, Kapoor). This allows Mike’s Bar and Grill to get the most authentic American experience. This also gives the owner the best opportunity to make large profits but at the same time has the greatest risk. Using a totally owned facility to enter the market is the best choice to satisfy the owner but it also brings up many more things that he must consider.
Now that the owner chose to use a totally owned facility, he has even more things he must consider. He now needs to address the language barrier between Japan and the United States and he needs to address who is he going to hire. He is in control of the operations of the new firm in Japan and he needs to figure out how he is going to manage the business without speaking the Japanese. He can decide to hire Japanese workers and a translator to help give orders to the business and to receive financial information from the business. This makes it easy to communicate with the customer but the food might not be as authentic as the owner would like because it would be made by Japanese workers. He can also decide to hire American workers. This makes it easier to give directions and to have the food made in an authentic American way but it makes it difficult to communicate effectively with the customers. He can also decide to have a mix of Japanese workers and American workers and also people that can translate effectively between the workers. The American workers would make the food so that it would be an authentic American bar and grill and the Japanese workers would be able to take the order and communicate with the customers effectively. The owner of Mike’s Bar and Grill decided that having a mix of employees and a translator would create the best experience for both the workers and the customers.
As you can see, expanding a business, such as an American Bar and Grill, is a very difficult task. There are many things that must be consider in order for the business to be successful. Some of the major concerns are demand for the product or service, laws and restrictions, culture, how to establish the business and language barriers. There are many more thing that should also be consider when expanding businesses to a new country such as licensing, real estate, the economy, competition and many more. This only highlights some key points about doing business in Japan and would only be the start to establishing a new business in Tokyo.
Starting a Business in the US and in Japan. (2022, Mar 10). Retrieved from https://paperap.com/starting-a-business-in-the-us-and-in-japan/
