Osaka - Monday, January 9, 2012
Nikkei, Japanese leading newspaper specialized in business and economy, reported on January 8 that Japanese general construction companies are to heavily invest resources (human resources, leading-edge technologies) in Tohoku region to meet the needs of post-disaster reconstruction from the Japan disaster of earthquake and tsunami that occurred on March 11, 2011.
This is because in the next 3 years, it is estimated that 1.7 trillion yen equivalent post-disaster reconstruction demand is to be created in Tohoku, when Japan construction market is currently just above 40 trillion yen, which is half of its peak in the middle of the bubble economy (around 1990).
1. How much demand and jobs are estimated to be created from post-disaster reconstruction?
A leading human resource company in Japan estimated that post-disaster-related construction demand for the 3 fiscal years of 2011 - 2013 (ending in March 2014) is to be approximately 1.67 trillion yen.
Ministry of Land, Infrastructure, Transport and Tourism (MLIT) estimates that in fiscal year of 2011 (ending in March 2012), 500,000 jobs will be created. This is equivalent to approximately 10% of nationwide jobs in construction industry in Japan.
Thus, in the budgeting plan for 2012, the Japanese government has allocated 3.9 billion yen as the newly created “special budget for post-disaster reconstruction of Japan”.
And the industry association created a committee collaborating with MLIT, local government etc. in the devastated area and associations of small and mid-sized companies with the objective of smoothly acquiring human resource.
2. Why such demand and jobs are estimated to be created?
It is because from fiscal year 2012 (starting April 2012), many of the construction in the Tohoku region is to start in earnest.
Some of the (re-)constructions include motorway and other main roads, railways, and levees for shore protection.
3. How are leading Japanese construction companies to take actions to meet such demand increase?
They are to focus their resources including human resources and leading-edge technologies in the Tohoku region to avoid their projects getting behind schedule and/or increase in cost attributing to insufficient materials and human resources.
Currently, the top 4 Japanese general construction companies (Kashima, Shimizu, Taisei and Obayashi) have allocated 300 – 600 human resources in the region but plan to increase by 10 – 20% when they win the order of project(s) related to post-disaster (re)construction.
Regarding technologies, Obayashi plans to utilize cement whose strengths do not deteriorate even exposed to sea water in constructions in coastal area. Applying technologies of waste segregation and recycling, Kashima developed a technology that increases recycling by 80% in handling disaster wastes, which they would like to leverage in post-disaster (re)construction.
4. How would large general construction companies to work with local small and mid-sized construction companies?
Small and mid-sized local construction companies have been preferentially winning orders (projects) that are related to post-disaster reconstruction from the perspective of providing jobs to local people.
The large, general construction companies operating nationwide (and also overseas) will be responsible of (re)constructions of roads, railways and levees for seashore protection, mostly of large scale projects that local companies cannot handle.
General construction companies will take consideration of providing jobs to local people in planning and executing such (re)construction projects. For example, they are thinking of making local construction companies to join their Joint Venture companies or to work for them as subcontractors.
5. What are the author’s final thoughts?
1) Jobs/employment and social infrastructure issues in Tohoku must be solved
This is a critical issue. The author recently saw a TV programme in which they reported that almost 50% of the respondents of their survey answered victims of the disaster lost their jobs. Even those who still have jobs say that their income has drastically decreased.
It is quite true that many victims still live in temporary housing and housing is also a critical issue, the victims cannot lead the lives they used to lead unless they have jobs to make ends meet.
Another critical issue for victims to lead normal lives is reconstruction of social infrastructure such as roads and railways, and ultimately cities/villages accompanied with such facilities as shops, hospitals and schools, and housing.
The above Nikkei article is the first step for such a social infrastructure reconstruction.
2) All organizations (public, private, academia) and all individuals need to take responsibility in post-disaster reconstruction
The above article is about the case in construction sector. It is true that at this stage construction sector is one of the sectors to take the lead but it is not the only one and there should be something that all sectors of all organizations/individuals can help and/or are responsible in the post-disaster reconstruction.
The previous article Sendai Girls Lead Post-Disaster Reconstruction Initiative – Japan Disaster, initiated by Muratac Co. Ltd., a company based in Sendai (one of the hard-hit cities by the disaster) is something that they came up with as what they can help and be responsible for the post-disaster reconstruction.
If there should be any sector, organization or individual that cannot help and/or be responsible in the post-disaster even it is may be something small, it means they do not contribute to the society and economy and their raison d’etre as a member of the society needs to be reconsidered. This is because post-disaster reconstruction is reconstruction of the total area covering all aspects of economy, society and people’s lives.
Resources:-
With estimated 1.7 trillion yen post-disaster reconstruction demand to be created in the next 3 years, Japanese general construction companies are to heavily invest resources (HR, leading-edge technologies) in Tohoku region to meet the needs of the new demand. This is the first step of reconstruction of the region (reconstruction of social infrastructure including facilities such as shops, hospitals and schools) to help victims to once again lead normal lives. Other critical issues for reconstruction include job creation. This is the reconstruction of construction sector and all sectors of all organizations and individuals are responsible for the reconstruction.
2012年1月4日水曜日
Samsung to Re-Enter Japan Flat Panel TV Market
Osaka - Wednesday, January 4, 2012
Nikkei, Japanese leading newspaper specialized in business and economy, reported on January 3 that Samsung decided to re-enter Japan flat panel TV market in 2013. They plan to launch high visual quality TVs with organic EL (electroluminescence) considered to be one of the promising next generation TVs and high-end LCD TVs.
Samsung is the global leader of flat panel TV with the #1 worldwide market share of almost 20% but they had not developed their business in Japan. Their re-entry in the Japan market would mean more options for Japanese consumers, and Japanese companies require countermeasures; TV business of companies such as Sony and Panasonic has been under-performing and for example Panasonic gone to red lately.
1. How has Samsung’s business been in Japan?
Samsung had once tried to enter Japanese TV market in 2002 by launching LCD TVs but they were unsuccessful due to weak corporate brand. Their market share remained as low as 0.3% and immediately withdrew from the Japan market in 2002.
2. Why did Samsung decide to re-enter the Japan flat panel TV market?
It is because their brand awareness has drastically improved in 2011 attributing to the success in their smart phone business of Galaxy series sold via a leading Japanese carrier, NTT DoCoMo from 2010. The company seems to have estimated that it is possible for them to gain market share of at least a few % if they launch organic EL TVs with low power consumption prior to their Japanese counterparts.
3. What actions has Samsung already taken?
The company already made approach to several leading retailers. The produce line-ups are assumed to be large TVs of 40 inch or larger of high-end LCD TVs with 3D and Internet connection functions. They also plan to sell TVs of 55 inch or larger with organic EL to avoid revenue deterioration from price collapse. Organic EL TVs will be first sold in South Korea in 2012.
4. How is Samsung positioned in the worldwide market compared to their Japanese counterparts?
According to Display Search, a leading research company based in the U.S., as of 2010, worldwide flat panel TV market share (volume base) of Samsung is #1 with 18.7%. #2 is LG with 13.1%, #3 is Sony with 10.3% and #4 is Panasonic with 7.9%. Samsung has been the worldwide leader for 5 consecutive years and in 2011 they had been targeting to increase their business by 15% to hit worldwide sales of 45 million TV sets.
5. What is the meaning of their re-entry to the Japan market in their global business strategy?
It is to “fill” their vacant regional market when it is difficult to grow their business in other parts of the world. Their main markets of the U.S. and Europe have slowed down due to debt crisis. China business is also tough with severe price competition with Chinese local makers.
Thus it is logical for them to re-enter the Japan market with leading-edge product line-ups to grow their global business when their corporate brand has become strong in Japan, although the Japanese flat panel TV market is estimated to decrease to 150 million units in 2011 from 260 million units in 2010 due to rebound of ad-hoc demand of transition to digital terrestrial transmission in July 2011.
6. What are the author’s final thoughts?
Many Japanese companies used to thoroughly enjoy benefit from relatively large domestic demand/market and unique needs of Japanese consumers that made their global counterparts difficult to enter the Japan market. For this reason, they could enjoy high market share in the Japan domestic market even if they were followers in the worldwide market, with which they could make their ends meet.
However, that is no longer the case. Demand/market of Japan is shrinking and slowing down, other markets such as China, India and Russia are emerging. Non-Japanese companies have become more competitive even in industries that Japanese companies used to lead (e.g. automobile, home electronics). Japanese consumers are more open to non-Japanese brands and products.
Samsung’s re-entry to Japanese flat panel TV market is a warning that Japanese companies need to change their mindset and review their strategy, business model, products and services, marketing etc. to meet the today’s global business environment for survival and sustainability.
The author, who used to initiate global web strategy when she was working for a Japanese consumer electronics giant, first benchmarked western global companies then added Samsung 2002 - 2003 when the senior management were interested only in Japanese counterparts. Her colleagues responsible for global market also regarded Samsung as the company they really need to be aware of. Their assumption came out to be quite true.
Resources:-
Samsung’s re-entry to the Japan flat panel TV market since their first attempt of entry in 2002 is a warning that Japanese companies need to change their mindset and review their strategy, business model, products etc. to meet the today’s global business environment for survival and sustainability. Unlike in 2002 when Samsung’s corporate brand was weak, their brand is now strong with their successful business in smart phone business of Galaxy series while global competitiveness of Japanese companies has done down.
Nikkei, Japanese leading newspaper specialized in business and economy, reported on January 3 that Samsung decided to re-enter Japan flat panel TV market in 2013. They plan to launch high visual quality TVs with organic EL (electroluminescence) considered to be one of the promising next generation TVs and high-end LCD TVs.
Samsung is the global leader of flat panel TV with the #1 worldwide market share of almost 20% but they had not developed their business in Japan. Their re-entry in the Japan market would mean more options for Japanese consumers, and Japanese companies require countermeasures; TV business of companies such as Sony and Panasonic has been under-performing and for example Panasonic gone to red lately.
1. How has Samsung’s business been in Japan?
Samsung had once tried to enter Japanese TV market in 2002 by launching LCD TVs but they were unsuccessful due to weak corporate brand. Their market share remained as low as 0.3% and immediately withdrew from the Japan market in 2002.
2. Why did Samsung decide to re-enter the Japan flat panel TV market?
It is because their brand awareness has drastically improved in 2011 attributing to the success in their smart phone business of Galaxy series sold via a leading Japanese carrier, NTT DoCoMo from 2010. The company seems to have estimated that it is possible for them to gain market share of at least a few % if they launch organic EL TVs with low power consumption prior to their Japanese counterparts.
3. What actions has Samsung already taken?
The company already made approach to several leading retailers. The produce line-ups are assumed to be large TVs of 40 inch or larger of high-end LCD TVs with 3D and Internet connection functions. They also plan to sell TVs of 55 inch or larger with organic EL to avoid revenue deterioration from price collapse. Organic EL TVs will be first sold in South Korea in 2012.
4. How is Samsung positioned in the worldwide market compared to their Japanese counterparts?
According to Display Search, a leading research company based in the U.S., as of 2010, worldwide flat panel TV market share (volume base) of Samsung is #1 with 18.7%. #2 is LG with 13.1%, #3 is Sony with 10.3% and #4 is Panasonic with 7.9%. Samsung has been the worldwide leader for 5 consecutive years and in 2011 they had been targeting to increase their business by 15% to hit worldwide sales of 45 million TV sets.
5. What is the meaning of their re-entry to the Japan market in their global business strategy?
It is to “fill” their vacant regional market when it is difficult to grow their business in other parts of the world. Their main markets of the U.S. and Europe have slowed down due to debt crisis. China business is also tough with severe price competition with Chinese local makers.
Thus it is logical for them to re-enter the Japan market with leading-edge product line-ups to grow their global business when their corporate brand has become strong in Japan, although the Japanese flat panel TV market is estimated to decrease to 150 million units in 2011 from 260 million units in 2010 due to rebound of ad-hoc demand of transition to digital terrestrial transmission in July 2011.
6. What are the author’s final thoughts?
Many Japanese companies used to thoroughly enjoy benefit from relatively large domestic demand/market and unique needs of Japanese consumers that made their global counterparts difficult to enter the Japan market. For this reason, they could enjoy high market share in the Japan domestic market even if they were followers in the worldwide market, with which they could make their ends meet.
However, that is no longer the case. Demand/market of Japan is shrinking and slowing down, other markets such as China, India and Russia are emerging. Non-Japanese companies have become more competitive even in industries that Japanese companies used to lead (e.g. automobile, home electronics). Japanese consumers are more open to non-Japanese brands and products.
Samsung’s re-entry to Japanese flat panel TV market is a warning that Japanese companies need to change their mindset and review their strategy, business model, products and services, marketing etc. to meet the today’s global business environment for survival and sustainability.
The author, who used to initiate global web strategy when she was working for a Japanese consumer electronics giant, first benchmarked western global companies then added Samsung 2002 - 2003 when the senior management were interested only in Japanese counterparts. Her colleagues responsible for global market also regarded Samsung as the company they really need to be aware of. Their assumption came out to be quite true.
Resources:-
Samsung’s re-entry to the Japan flat panel TV market since their first attempt of entry in 2002 is a warning that Japanese companies need to change their mindset and review their strategy, business model, products etc. to meet the today’s global business environment for survival and sustainability. Unlike in 2002 when Samsung’s corporate brand was weak, their brand is now strong with their successful business in smart phone business of Galaxy series while global competitiveness of Japanese companies has done down.
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