Osaka – Sunday, July 11, 2010
Soon after Japan lost the game with Paraguay in the 2010 World Cup in the first final tournament session playing extra time and then lost in penalty kicks, some players who had won attention including Keisuke Honda and Yuto Nagatomo are now being approached by western professional soccer teams and negotiation of relocation started. In fact, Eiji Kawashima, the goal keeper of the Japan soccer team for the 2010 World Cup, already moved to a Belgium team on July 6, and today on July 11 Keisuke Honda just left Japan from Narita International Airport to relocate in Russia. This seems to be another sign of Japanese athletes getting more and more global.
1. How were most sports and athletes in Japan in 20th century?
Sports and athletes in Japan used to be rather domestic in general in 20th century.
Although it may be a little unexpected, perhaps the sport that had already been international sport in Japan is sumo wrestling, which is the national sport of Japan. There have been non-Japanese sumo wrestlers from in 1970s long ago who had come from Hawaii, Mongol and Eastern Europe countries. In fact, the current and recent Yokozuna wrestlers (the highest rank players, only 2 at maximum) have been non-Japanese.
Baseball is another sport that had some non-Japanese players. Most of them were ex-major league players, who were invited to join a Japanese professional baseball team. And of course, world-class non-Japanese athletes do play in major golf tournaments held in Japan.
But most sports in Japan have been domestic and homogeneous, and few Japanese athletes relocated to overseas. Japanese athletes who played games or tournaments abroad (excluding games such as Olympics and World Championships) were extremely limited; they were mostly professional athletes of golf and tennis.
2. How did Japanese athletes start to go global?
The author would like to focus on the case of baseball and soccer in briefly explaining how Japanese athletes started to go global because she feels their case is easy to understand how Japanese athletes started to go global.
1) Baseball
Hideo Nomo, a pitcher, was the first Japanese to relocate to the U.S. to join a major league team in 1995, which was a great risk for his baseball life/career. Until then it was believed that Japanese baseball players would not succeed in major league due to lack of skills compared to major league players although baseball had been one of the most popular sport in Japan, and many people paid much attention to how he gets on.
It must have been tough to relocate in another country as a pioneer but Hideo proved that a Japanese baseball player can be successful in the major league. And then other Japanese baseball players started to relocate to the U.S. to join a major league team, some famous players including Ichiro, Hideki Matsui, Daisuke Matsuoka, Hideki Okajima and Tsuyoshi Shinjo (who have come back to Japan now), of different position followed Nomo to relocate to the U.S. to play in a major league team.
Now, relocating to the U.S. to join a major league team has become one of a popular option for successful Japanese baseball players.
2) Soccer
Soccer was mostly of an amateur sport that was not so popular in Japan. But with the start of the J (Japan) League in 1993 meaning making soccer a professional sport. This marked the start of evolution of Japan soccer evolution; i.e. how the skills of Japanese soccer players improved, how soccer became popular, and how the sport and players became global.
With the J League, soccer players of the league would be blessed with necessary environment to concentrate on soccer to become a top level player. With tournaments of the league, they would have more opportunities than before to play soccer, leading to enhancement in the overall level of the league. Their games would go on the air and information on the league would be posted on media. This attracted people’s attention, meaning more boys to start playing soccer dreaming of becoming a professional player, and enhancement in the environment and infrastructure/systems of developing young soccer players. This is how Japan managed to join the World Cup games in 1998.
Playing in the World Cup games has significant meaning in the globalization of the sport and athletes. Although the level/skills of Japanese soccer players in general still may not be up to the world class and the team result of the World Cup game was not necessarily good, some European soccer teams found a few competent players such as Hidetoshi Nakata and Shunsuke Nakamura and invited to join their team. Without playing in the World Cup games, such athletes probably did not have a chance to relocate to Europe to be a member of one of the top class team.
Similarly to baseball, now, relocating abroad to join and play in a world class team is a well accepted option for Japanese successful soccer players. In fact, Eiji Kawashima, who relocated to Belgium on July 6, had set his goal as joining a European team since he was quite young and had been preparing for it.
Eiji not only practiced much soccer, he aggressively acquired 4 European languages. Hidetoshi Nakata supported him in acquiring Italian and understanding “European soccer”. Eiji decided to acquire European languages because he knew it would be inevitable to be a successful goal keeper of a European team, who would need to communication with the team members much during the game in the native language. His language proficiency was prominent in the press conference that was held immediately after he arrived in Belgium.
3. What are the requirements for athletes to truly become world class athletes?
It is highly likely that in the near future, soft skills such as language and intercultural communication skills as well as hard skills of the sport the athletes specialize in determine how the athletes could truly become global and world class athletes. Many of the Japanese athletes of golf and tennis who often play abroad speak English very well already. This is mostly for their survival similarly to Mr. Kawashima; for golf for instance, English proficiency is one of the requirements to be able to play in tournaments held in the U.S. In fact, successful non-Japanese sumo wrestlers have acquired Japanese extremely well and have adapted to Japanese society, manners and culture, and tradition of sumo wrestling.
There is a lesson from how athletes become truly successful, world class athletes. It is that the determinants of becoming truly globalized and world class athlete are the requirements for business person to be successful in the global business world.
2010年7月4日日曜日
Quantitative and Qualitative Effects of the 2010 World Cup
Osaka – Sunday, July 4, 2010
Big event such as the World Cup has positive effect on the economy and the society, both quantitative and qualitative, although the quantitative effect on the economy solely is usually discussed. In the case of the 2010 World Cup, it is estimated that it has positive effect on the Japanese economy equivalent to 300 billion yen.
The author has no comment to the rationale of the valuation of 300 billion yen. To her, the positive effect is beyond value of 300 billion yen; there are far more positive effects that cannot be valuated. In this article, the author would like to discuss both the quantitative and qualitative positive effects of the 2010 World Cup to Japan.
1. What is the quantitative positive effect of the 2010 World Cup?
The Yahoo! Japan news reported on June 30 that the Japan Soccer Team of the World Cup 2010 had positive effect on the Japanese economy equivalent to 300 billion yen, according to an estimation of an expert.
1) The constituent of the positive effect equivalent to 300 billion yen
On June 29, an expert in this field said in an interview of a newspaper that, according to his personal analysis and estimation the positive effect on the economy is equivalent to 290 billion yen for everything until the soccer team won the ticket to play in the final tournament and additional 10 billion yen for the final tournament game, totaling 300 billion yen.
300 billion yen does not include that of digital consumer electronics. What is included are mainly eating and drinking, World Cup goods, businesses related to watching and enjoying the soccer games, and DVDs and gaming that are to be launched later this year.
2) 300 billion compared with positive effect on the economy of other sport games
300 billion is smaller than that of the previous World Cup games but is far greater than that of WBC (World Baseball Classics) of March 2009 when Japan won the first prize to achieve second successive victory, which was estimated as approximately 55 billion yen.
Simple comparison of the two sport games (the World Cup and WBC) is impossible because of the difference in their history and size. However, it goes without saying that the “power” of the World Cup is enormous.
3) 300 billion yen compared to the previous World Cup games
300 billion yen for the 2010 World Cup is smaller that that of previous World Cup games. The positive effect on the Japanese economy for the 2002 World Cup, co-hosted by Japan and South Korea, was estimated as 2 trillion yen, from construction of new stadiums to overseas supporters visiting Japan. And for the 2006 World Cup held in Germany it was estimated as over 400 billion yen.
Big events such as the World Cup games are expected to give positive economic effect and usually private research companies officially estimate and announce. However, they decided not to do so for the 2010 World Cup held in South Africa. The reason they say is that precise estimation of positive effect solely of the World Cup is extremely difficult.
The over 400 billion yen for the 2006 World Cup is mostly of digital consumer electronics, and incentives and consumer spending stimulation measures are taken by the Japanese government for digital consumer electronics. Also, the fact that digital broadcasting is to start in July 2011 also is a stimulant for consumers to purchase new digital consumer electronics. Therefore, they refrained from official estimation and announcement for the 2010 World Cup.
2. What is the qualitative positive effect of the 2010 World Cup?
The author would say inspiration and learning are other positive effects on Japan and its people that cannot necessarily be valuated but are extremely important.
1) Inspiration from the Japan Soccer Team
The whole nation was inspired by the Japan soccer team when there were many depressing news elsewhere, and were united.
Frankly speaking, the advance review of the Japan soccer team was not good, which is another reason why private research companies did not officially estimate and announce the positive effect on the Japanese economy for 2010 World Cup. The mass media did not broadcast much about the team as previous World Cup. When the team left Japan at night, there were only 70 or so supporters at the airport to see them off, when 4200 people were at the Kansai International Airport to welcome the team back to Japan on July 1. And only the passionate soccer fans watched the first 2010 World Cup game that the Japan team played, which was with Cameroon.
Although the team had lost all 4 official games they played just before the World Cup but they won the first game with Cameroon by 1-0. Mass media and the general public were fascinated by the victory. Many people including those people who were not so interested in soccer (including the author) watched the games later played, which were with Denmark (won 3-1) and Holland (lost 1-0). Many TV programmes featuring the World Cup and the Japan soccer team went on the air after the victory over Cameroon. And the whole nation supported the first final tournament game with Paraguay and cried to the defeat, after playing extra time and then lost in penalty kicks.
2) Lesson learned from the Japan Soccer Team
What we learned from the Japan soccer team includes “teamwork (and leadership)” and “never give up”. In fact, the message from Mr. Okada, the coach, is about the two, which were delivered in the press conference held in a hotel in Osaka on July 1. To the author, the 2 lessons cannot be valuated but extremely precious, which are universal regardless of the country, industry, organization, era etc.
(1) Teamwork and leadership
At the press conference, Mr. Okada, looking back at the past 2-1/2 years, said that team building did not proceed as anticipated but made the team concept unchanged. There were ups and downs and the team did have hard times; however, they continuously worked hard without changing their vision and goal.
Teamwork is what has been introduced in many TV programmes lately as the key for the victory when, as experts point out which team members (players) also are fully aware off, the skill of each players are inferior compared with players in previous World Cup and needs much work to be done to catch up the world class level. Great teamwork of the Japan soccer teams was prominent from how the players behaved in the World Cup games and from the press conference as well. Mr. Okada let some team member did performances at the press conference, such as imitation and singing an African song.
In the press conference and in other interviews that went on the air, all team members emphasized the importance of the teamwork. They said that the Japan soccer team was superb and that they are so proud of being a member of the team. In addition, they were thankful for Mr. Okada who led them until that day, who said that the team members were all superb, wanted to make them play once more in the 2010 World Cup, and it is his inadequacy that they could not get into top 8.
It is clear that Mr. Okada’s was successful to lead and build an excellent team to maximize the team power. Each team members unleashed their potential and complemented one another to make synergy, i.e. making 1+1 bigger than 2.
(2) Never give up
In the press conference Mr. Okada also said not to give up even at hard times, as a message to children. He said that he was happy to see shining eyes of many young people welcoming him and the team at the airport. Then he delivered a message to children “I have been saying this to the team members as well. There are good and bad times in soccer and life, but the bad time is an opportunity for us to grow. The Japan soccer team members demonstrated through the World Cup 2010 games the courage to face up with difficulty when faced with obstacles. Never give up even in tough times”.
Big event such as the World Cup has positive effect on the economy and the society, both quantitative and qualitative, although the quantitative effect on the economy solely is usually discussed. In the case of the 2010 World Cup, it is estimated that it has positive effect on the Japanese economy equivalent to 300 billion yen.
The author has no comment to the rationale of the valuation of 300 billion yen. To her, the positive effect is beyond value of 300 billion yen; there are far more positive effects that cannot be valuated. In this article, the author would like to discuss both the quantitative and qualitative positive effects of the 2010 World Cup to Japan.
1. What is the quantitative positive effect of the 2010 World Cup?
The Yahoo! Japan news reported on June 30 that the Japan Soccer Team of the World Cup 2010 had positive effect on the Japanese economy equivalent to 300 billion yen, according to an estimation of an expert.
1) The constituent of the positive effect equivalent to 300 billion yen
On June 29, an expert in this field said in an interview of a newspaper that, according to his personal analysis and estimation the positive effect on the economy is equivalent to 290 billion yen for everything until the soccer team won the ticket to play in the final tournament and additional 10 billion yen for the final tournament game, totaling 300 billion yen.
300 billion yen does not include that of digital consumer electronics. What is included are mainly eating and drinking, World Cup goods, businesses related to watching and enjoying the soccer games, and DVDs and gaming that are to be launched later this year.
2) 300 billion compared with positive effect on the economy of other sport games
300 billion is smaller than that of the previous World Cup games but is far greater than that of WBC (World Baseball Classics) of March 2009 when Japan won the first prize to achieve second successive victory, which was estimated as approximately 55 billion yen.
Simple comparison of the two sport games (the World Cup and WBC) is impossible because of the difference in their history and size. However, it goes without saying that the “power” of the World Cup is enormous.
3) 300 billion yen compared to the previous World Cup games
300 billion yen for the 2010 World Cup is smaller that that of previous World Cup games. The positive effect on the Japanese economy for the 2002 World Cup, co-hosted by Japan and South Korea, was estimated as 2 trillion yen, from construction of new stadiums to overseas supporters visiting Japan. And for the 2006 World Cup held in Germany it was estimated as over 400 billion yen.
Big events such as the World Cup games are expected to give positive economic effect and usually private research companies officially estimate and announce. However, they decided not to do so for the 2010 World Cup held in South Africa. The reason they say is that precise estimation of positive effect solely of the World Cup is extremely difficult.
The over 400 billion yen for the 2006 World Cup is mostly of digital consumer electronics, and incentives and consumer spending stimulation measures are taken by the Japanese government for digital consumer electronics. Also, the fact that digital broadcasting is to start in July 2011 also is a stimulant for consumers to purchase new digital consumer electronics. Therefore, they refrained from official estimation and announcement for the 2010 World Cup.
2. What is the qualitative positive effect of the 2010 World Cup?
The author would say inspiration and learning are other positive effects on Japan and its people that cannot necessarily be valuated but are extremely important.
1) Inspiration from the Japan Soccer Team
The whole nation was inspired by the Japan soccer team when there were many depressing news elsewhere, and were united.
Frankly speaking, the advance review of the Japan soccer team was not good, which is another reason why private research companies did not officially estimate and announce the positive effect on the Japanese economy for 2010 World Cup. The mass media did not broadcast much about the team as previous World Cup. When the team left Japan at night, there were only 70 or so supporters at the airport to see them off, when 4200 people were at the Kansai International Airport to welcome the team back to Japan on July 1. And only the passionate soccer fans watched the first 2010 World Cup game that the Japan team played, which was with Cameroon.
Although the team had lost all 4 official games they played just before the World Cup but they won the first game with Cameroon by 1-0. Mass media and the general public were fascinated by the victory. Many people including those people who were not so interested in soccer (including the author) watched the games later played, which were with Denmark (won 3-1) and Holland (lost 1-0). Many TV programmes featuring the World Cup and the Japan soccer team went on the air after the victory over Cameroon. And the whole nation supported the first final tournament game with Paraguay and cried to the defeat, after playing extra time and then lost in penalty kicks.
2) Lesson learned from the Japan Soccer Team
What we learned from the Japan soccer team includes “teamwork (and leadership)” and “never give up”. In fact, the message from Mr. Okada, the coach, is about the two, which were delivered in the press conference held in a hotel in Osaka on July 1. To the author, the 2 lessons cannot be valuated but extremely precious, which are universal regardless of the country, industry, organization, era etc.
(1) Teamwork and leadership
At the press conference, Mr. Okada, looking back at the past 2-1/2 years, said that team building did not proceed as anticipated but made the team concept unchanged. There were ups and downs and the team did have hard times; however, they continuously worked hard without changing their vision and goal.
Teamwork is what has been introduced in many TV programmes lately as the key for the victory when, as experts point out which team members (players) also are fully aware off, the skill of each players are inferior compared with players in previous World Cup and needs much work to be done to catch up the world class level. Great teamwork of the Japan soccer teams was prominent from how the players behaved in the World Cup games and from the press conference as well. Mr. Okada let some team member did performances at the press conference, such as imitation and singing an African song.
In the press conference and in other interviews that went on the air, all team members emphasized the importance of the teamwork. They said that the Japan soccer team was superb and that they are so proud of being a member of the team. In addition, they were thankful for Mr. Okada who led them until that day, who said that the team members were all superb, wanted to make them play once more in the 2010 World Cup, and it is his inadequacy that they could not get into top 8.
It is clear that Mr. Okada’s was successful to lead and build an excellent team to maximize the team power. Each team members unleashed their potential and complemented one another to make synergy, i.e. making 1+1 bigger than 2.
(2) Never give up
In the press conference Mr. Okada also said not to give up even at hard times, as a message to children. He said that he was happy to see shining eyes of many young people welcoming him and the team at the airport. Then he delivered a message to children “I have been saying this to the team members as well. There are good and bad times in soccer and life, but the bad time is an opportunity for us to grow. The Japan soccer team members demonstrated through the World Cup 2010 games the courage to face up with difficulty when faced with obstacles. Never give up even in tough times”.
2010年6月27日日曜日
Asia Business Drives Recovery of Japanese Companies
Osaka – Sunday, June 27, 2010
Nikkei, Japanese newspaper specialized in business/economy, reported today that Asia business is driving revenue recovery of Japanese Companies. It came clear that Asia is the engine of generating revenue (profit) for one out of four companies when they analyzed operating revenue of financial data by region for fiscal year ending March 2010.
Operating profit from Asia business has recovered to the level of 82% of those of before the worldwide financial crisis in 2008. This is far greater than Americas (43%) and Japan (30%). It is true that there are risks such as increase in personnel cost of China. However, the Japanese government has developed the new growth strategy as explained in the previous article Japan's New Growth Strategy Approved - What Is It? making the most of growth in Asia economy and therefore it is likely that further shift in Asia business will take place among Japanese companies.
1. How did Nikkei come to the conclusion?
Nikkei collected and analyzed financial data of 419 listed companies (excluding financial and new companies) that are:- a)fiscal year ends in March; b)discloses revenues by region; and c)sequent data is available since 2000.
2. How much was the operating profit generated by Asia business?
Operating profit generated by Asia (including Oceania) business was 1.8814 trillion yen in total, which covers 26% of total operating profit generated worldwide. Although this percentage is behind Japan, which was 52%, it is far greater than Americas (11%) and Europe (3%).
3. How is Asia business driving recovery of major companies?
Companies covering 25% of 419 companies analyzed have been recovering driven by Asia business. Most of them are of major manufactures of automobile and electronics. Operating profit generated by Toyota’s Asia business was the greatest, totaling 203.5 billion yen. This attributed to Toyota’s consolidated operating profit returning to black even though their America and Europe business still remains in red.
Major Companies Generating Revenue/Profit Primarily from Asia Business
(Source: Nikkei, translated by the author)
Company Name / Amount of Operating Profit from Asia Business (billion yen) / % of Operating Profit from Asia Business*
Toyota / 203.5 / 139
Denso / 75.3 / 54
TDK / 65.9 / 251
Suzuki / 56.1 / 67
Toshiba / 46.1 / 41
Daikin / 37.9 / 88
HOYA / 34.1 / 58
Seiko Epson / 27.2 / 158
Hitachi Construction Machinery / 26.5 / 219
Rohm / 26.5 / 108
* above 100 = the total operating profit from business in other regions are negative (i.e. loss)
Suzuki’s business is strong in India, where they have market share of approximately 50% in passenger cars. Card produced locally topped 1 million for the first time. The top management commented “operating profit generated by business in India covers almost 70% of consolidated operating profit”.
Toshiba’s operating profit from Asia business doubled from previous year totaling 46.1 billion yen. This was because of business growth in their infrastructure and digital consumer electronics businesses.
4. How is Asia business recovery compared?
Revenue and profitability recovery from Asia business is outstanding. Sales have recovered to 70% and operating profit has recovered to 82% of the level of fiscal year ending March 2008, i.e. before the worldw ide financial crisis. Profitability of Asia business is also high compared with other region. Operating profit of Asia for the analyzed companies turned out to be 9% in average, which is far greater than Japan (45), Americas (3%) and Europe (1%).
This is because profit tends to expand in the process of market recovery for Asia where cost is comparatively low and inflation is comparatively high, compared with, for example Japan, whose profitability is more difficult to improve with high yen and deflation.
5. What is the outlook for fiscal year ending March 2011?
Asia is assumed to remain the engine of further business/financial performance recovery of Japanese companies for fiscal year ending March 2011.
For example, UniCharm Corporation estimates to increase its operating profit by 19%. For sales increase, third plant in China has been constructed in the end of 2009. TOTO plans to generate approximately 70% of assumed worldwide operating profit from China business. To achieve this, they will strengthen sales of housing equipment in inland area.
The government’s new growth strategy leading to strengthening economic relationship with Asia countries could mean positive effect on Asia business of Japanese companies. However, there are risks such as devaluing of the Chinese yuan (RMB) and increase in personnel cost of factory workers in high growing market of China, which has big impact on management. In addition, competition with strong companies of the west and Korea is severe. It is high likely that the quality of Asia business strategy determines how their Asia business further grows.
Nikkei, Japanese newspaper specialized in business/economy, reported today that Asia business is driving revenue recovery of Japanese Companies. It came clear that Asia is the engine of generating revenue (profit) for one out of four companies when they analyzed operating revenue of financial data by region for fiscal year ending March 2010.
Operating profit from Asia business has recovered to the level of 82% of those of before the worldwide financial crisis in 2008. This is far greater than Americas (43%) and Japan (30%). It is true that there are risks such as increase in personnel cost of China. However, the Japanese government has developed the new growth strategy as explained in the previous article Japan's New Growth Strategy Approved - What Is It? making the most of growth in Asia economy and therefore it is likely that further shift in Asia business will take place among Japanese companies.
1. How did Nikkei come to the conclusion?
Nikkei collected and analyzed financial data of 419 listed companies (excluding financial and new companies) that are:- a)fiscal year ends in March; b)discloses revenues by region; and c)sequent data is available since 2000.
2. How much was the operating profit generated by Asia business?
Operating profit generated by Asia (including Oceania) business was 1.8814 trillion yen in total, which covers 26% of total operating profit generated worldwide. Although this percentage is behind Japan, which was 52%, it is far greater than Americas (11%) and Europe (3%).
3. How is Asia business driving recovery of major companies?
Companies covering 25% of 419 companies analyzed have been recovering driven by Asia business. Most of them are of major manufactures of automobile and electronics. Operating profit generated by Toyota’s Asia business was the greatest, totaling 203.5 billion yen. This attributed to Toyota’s consolidated operating profit returning to black even though their America and Europe business still remains in red.
Major Companies Generating Revenue/Profit Primarily from Asia Business
(Source: Nikkei, translated by the author)
Company Name / Amount of Operating Profit from Asia Business (billion yen) / % of Operating Profit from Asia Business*
Toyota / 203.5 / 139
Denso / 75.3 / 54
TDK / 65.9 / 251
Suzuki / 56.1 / 67
Toshiba / 46.1 / 41
Daikin / 37.9 / 88
HOYA / 34.1 / 58
Seiko Epson / 27.2 / 158
Hitachi Construction Machinery / 26.5 / 219
Rohm / 26.5 / 108
* above 100 = the total operating profit from business in other regions are negative (i.e. loss)
Suzuki’s business is strong in India, where they have market share of approximately 50% in passenger cars. Card produced locally topped 1 million for the first time. The top management commented “operating profit generated by business in India covers almost 70% of consolidated operating profit”.
Toshiba’s operating profit from Asia business doubled from previous year totaling 46.1 billion yen. This was because of business growth in their infrastructure and digital consumer electronics businesses.
4. How is Asia business recovery compared?
Revenue and profitability recovery from Asia business is outstanding. Sales have recovered to 70% and operating profit has recovered to 82% of the level of fiscal year ending March 2008, i.e. before the worldw ide financial crisis. Profitability of Asia business is also high compared with other region. Operating profit of Asia for the analyzed companies turned out to be 9% in average, which is far greater than Japan (45), Americas (3%) and Europe (1%).
This is because profit tends to expand in the process of market recovery for Asia where cost is comparatively low and inflation is comparatively high, compared with, for example Japan, whose profitability is more difficult to improve with high yen and deflation.
5. What is the outlook for fiscal year ending March 2011?
Asia is assumed to remain the engine of further business/financial performance recovery of Japanese companies for fiscal year ending March 2011.
For example, UniCharm Corporation estimates to increase its operating profit by 19%. For sales increase, third plant in China has been constructed in the end of 2009. TOTO plans to generate approximately 70% of assumed worldwide operating profit from China business. To achieve this, they will strengthen sales of housing equipment in inland area.
The government’s new growth strategy leading to strengthening economic relationship with Asia countries could mean positive effect on Asia business of Japanese companies. However, there are risks such as devaluing of the Chinese yuan (RMB) and increase in personnel cost of factory workers in high growing market of China, which has big impact on management. In addition, competition with strong companies of the west and Korea is severe. It is high likely that the quality of Asia business strategy determines how their Asia business further grows.
2010年6月20日日曜日
Japan’s New Growth Strategy Approved – What Is It?
Osaka – Sunday, June 20, 2010
Nikkei, Japanese newspaper specialized in economy/business and politics, reported through June 17 to 19 about the New Growth Strategy of Japan under the new leadership of the Kan Administration, which was announced on June 17 and was approved in a Cabinet meeting on June 18.
The objective of the strategy is to realize “strong Japanese economy” advocated by the new Prime Minister Naoto Kan by creating new demand in 4 sectors of environment, healthcare, tourism and Asia to create total of 5 million jobs by 2010. The target economy growth is to mark real GDP (taking inflation into account) growth at 2% and GDP growth not taking inflation into account at 3% in average over the next 11 years. And the policy is to turn rate of increase in consumer price index from negative to positive in 2011 and get out from deflation.
1. Summary of the New Growth Strategy
Chapter 1: Objectives of the New Growth Strategy
Realize strong economy, finance and social security
Chapter 2: Policy of the New Growth Strategy
Consolidated reorganization of economy, finance and social security
Chapter 3: Policy of the 7 strategic fields/focuses and target outcome
Details explained later in the article.
1) Target 2020
(1) Growth to achieve at least GDP of 2% (taking inflation into account) and of 3% (not taking inflation into account).
(2) Turn rate of increase in consumer price index from negative to positive by the end of 2011 (to terminate deflation)
(3) Decrease unemployment rate below 4% at an early stage.
2) Measures to achieve Target 2020
The Government Strategy Projects consist from 7 fields. The 7 fields are the 6 major fields (focuses) from the growth strategy announce in December 2009 as mentioned in the previous article How Japan's Growth Strategy Should Be? including environment/energy, healthcare, Asia, tourism/local community activation, science/technology, employment/human resources, plus newly added “finance”.
(1) Gradually lower corporate tax (effective tax rate) to the level of other major countries.
(2) Establish medical stay visa.
(3) Promote infrastructure export targeting mainly Asia by collaboration between public and private.
(4) Decentralization of people having holidays (execution from 2012 if possible).
(5) Create “Integrated Exchange” by 2013 that trades deals bonds & securities, finances and products.
3) Targets to achieve
Create new demand and jobs
Sector / Demand (trillion yen) / Jobs (million)
Environment / 5 / 14
Healthcare / 5 / 28.4
Asia / 1.2 / 0.19
Tourism / 1.1 / 0.56
Total / 12.3 / 4.99
2. Summary of the Government Strategy Projects consisting from 7 fields
1) Environment / Energy
(1) Accelerate expansion of regenerable energy: to expand the market size to 10 trillion yen
Implement a system purchasing all regenerable energy such as wind & water power and biomass, implement smart grid (next generation transmission network); promote construction of wind power and geothermal generation.
(2) Create “Environmental Future City”: to expand environment/energy market to more than 50 trillion yen and create 1.4 million new jobs
Establish new law necessary for deregulation and tax measures; export know-how of urban development to overseas such as China.
(3) Revitalize forest / forestry: to establish foundation competitive against imported timber within 10 years, and make self-sufficiency ratio of timber over 50%.
Implement new “Forestry Management Plan” and support management strengthening attributing to upsizing; strategically allocate budget for woods and fiends management, and implement a system directly supporting forest management / environmental preservation.
2) Healthcare (Medical, Nursing etc.)
(1) Expand proliferation of advanced medical: to expand new medical equipments/pharmaceuticals and regeneration medicine, to generate positive economic effect of 700 billion yen/year.
Build consortium including medical organizations and administrations in the fields of cancer and dementia, and invest strategically research cost and talent; simplify evaluation procedure of advanced medical; abolish “drug lag” (new drugs launched in Japan after approved in western countries).
(2) International medical exchange: to have 500,000 people equivalent to 10% of Asia demand visit Japan, to generate positive economic effect of 1 trillion yen/year.
Accept more patients from abroad; implement new “medical stay visa”; enable medical treatment by non-Japanese doctors and nurses in Japan.
3) Leveraging economic growth of Asia
(1) Expand overseas business of infrastructure industry: to sign orders for overseas plant of 7000 billion USD to create 19.7 trillion yen market.
Establish Government Strategy Project Committee and strengthen top sales; expand function of public finance such as JBIC (Japan Bank for International Cooperation)
(2) Lower effective corporate tax rate and promote Japan as hub of Asia: to double interaction of resources between Japan and other Asian countries.
Lower effective corporate tax rate to the level of major countries; pay attention to obtaining tax revenue source including increasing/expanding taxation base; develop tax measures etc. as incentives in attracting foreign capitals; all to be implemented from 2011.
(3) Promote and increase development of global talent and acceptance of advanced talents: to accept 300,000 foreign students.
Implement “Point System” covering western and Asian countries; treat immigration control favourably depending on work history and achievements; support so that more Japanese students would have international experience.
(4) Develop and execute intellectual property strategy / Cool Japan overseas roll out: to acquire content revenue of 1 trillion yen from Asia.
Establish a strategic organization of science, technology and innovation to drive standardization of Japanese technology; strengthen digital distribution of Japanese software; prevent proliferation of pirated copy in overseas market.
(5) Establish Free Trade Zone for Asia Pacific: to double interaction of resources between Japan and other Asian countries.
Develop basic policy regarding comprehensive economic alliance/collaboration such as EPA (Economic Partnership Agreement) by the autumn of 2010; promote accepting talents in medical and nursing fields by embedding system of accepting nurse and care worker candidates to Japan from abroad based on EPA.
4) Tourism oriented country / Activating community
(1) Create “General Special Zone System” and promote Open Sky: to increase foreigners in Japan to 25 million, to generate positive economic effect or 10 trillion yen and create 560,000 new jobs.
Create International Strategic General Special Zone targeting urban development of certain cities that will be the economic growth engine; special treatment in deregulation and tax in improving infrastructure; make Haneda Airport “International Airport that operates 24 hours”.
(2) Increase foreigners staying in Japan and decentralize people having holidays: to achieve target of 2.5 million foreigners staying in Japan and then increase to 30 million.
Speed up procedures to issue visa for foreign tourists; study to revise law related to public holidays such as decentralizing holidays by region; all to be implemented from 2012.
(3) Expand used housing and reform market: to double to 20 trillion yen.
Establish synthetic plan including construction inspection/assurance, proliferation of housing history information; set new energy saving standard for housing.
(4) Open public facilities to private: to expand business size of disposal business management right by PFI to 10 trillion yen.
Open to private construction management by public sector; dispose of business management right by PFI (Private Finance Initiative) system leveraging private capital.
5) Science / Technology
(1) Strengthen global competitiveness and develop talent: to increase to over 100 research centres ranked top 50 globally in each fields.
Improve “leading post graduate schools” responsible for advanced researches; leverage talents such as post doctorates.
(2) Leverage information communication technologies: to realize “FTTH (Fibre To The Home” that makes all households able to benefit from broad band services.
Improve electronic administration enabling one stop use of information communication technologies at any time; utilize information communication in medical, nursing and education.
(3) Expand R&D (Research & Development): by expanding total R&D cost of public and private to over 4% of GDP.
Strategic organization responsible for science, technology and innovation will develop cross functional execution plan.
6) Employment / Human resource
(1) Unify kindergarten and nursing schools etc.: to eradicate by 2017 children waiting to enter nursing schools regardless of how their parents work.
Abolish requirements to enter nursing schools; establish service supply system such as users being able to freely choose facilities and business owners freely can set prices.
(2) Implement “Career Rank” system and support work-force etc.: to optimize employment rate to 80% and decrease part-time jobber to 1.24 million which is minus 40% from the peak.
Create system of evaluating vocational capability in growth fields of nursing and environment; strengthen support to people who have been unemployed for a long time.
(3) “New Public”: to make 50% of the citizen to participate in “new public” such s volunteer of their community and workplace.
Design tax system from which citizens benefit from public policy; review financial system for small organizations that support NPOs.
7) Finance
Create Integrated Exchange: to assure presence of Japan market in Asia.
Create Integrated Exchange that can trade bonds & securities, finances and products altogether by 2013.
3. Comments and evaluations from experts
There are so my challenges to overcome. Roadmap to achieve over 300 policies by 2020 has not yet been clarified. Many issues/obstacles remain such as breaking barriers among ministries, filling insufficient measures for deregulation, acquiring financial resources etc. Concrete processes are set only for 2010 – 2013 and no specific targets are set at milestones. Processes to achieve the targets are left to each ministry; therefore, many experts point out it is quite possible that policies that truly need to be executed will remain unexecuted. It is not easy to realize GDP growth of 3% (not taking inflation into consideration) while increasing consumption tax that Prime Minister Mr. Kan clearly implied to study to implement on June 17.
Comments and evaluation from 5 experts are as below.
1) First commentator / evaluator (Economist)
Focusing on environment and healthcare is good. Making Haneda Airport international that operates 24 hours is something that could not have been challenged when LDP was the ruling party.
2) Second commentator / evaluator (Economist)
Productivity improvement is vital for an economy when population is decreasing. Deregulation in healthcare and nursing is insufficient.
3) Third commentator / evaluator (Economist)
Stance of overcoming deflation by collaboration with the BOJ (Bank of Japan) is good. Policy from the supply side such as deregulation is desirable from the perspective of achieving both growth and sound financial status.
4) Forth commentator / evaluator (Professor)
Balancing of the policies has been improved but feasibility is a question. Blueprint for restructuring finance and social security is necessary.
5) Fifth commentator / evaluator (Professor)
Target of overcoming deflation by collaboration of the government and BOJ can be evaluated but lacks detail or specifics excluding lowering corporate tax. GDP growth of 3% (not taking inflation into consideration) is insufficient.
4. The author’s thought
Comments and evaluations from the 5 experts are all valid. The DPJ, the current ruling party, would need time to restructure and reorganize to realize strong economy, finance and social security, after LDP had ruled for 50 years making Japan as it is today. Although it might lack in details or specifics, roadmap and milestone targets, the new Kan administration did announced clearly the policy. Having said that, the situation is extremely urgent and if it should take too much time Japan would end up like Greece, as many experts point out, and therefore it is highly more concrete roadmap, milestone targets etc. are expected to follow soon.
Breaking various barriers and financial resources are the two major challenges.
The former is about game/power change and change in culture. Prime Minister Mr. Kan is from a family of non-politician (unlike many other politicians in Japan who become prime ministers) and has made an apology statement against bureaucrats when he was the Minister of Health and Welfare, so if he cannot achieve, it is probably that no one else can achieve.
The latter can only be achieved by increasing revenue (i.e. tax) and/or decreasing annual expenditure (i.e. cost). On June 17 Prime Minister Kan clearly implied that he is thinking of increasing (doubling) the consumption tax. It is understandable but other measures should be taken before increasing consumption tax such as eradicating practice of high-level government officials taking jobs in the private sector, slashing number / salary etc. of people in the Congress, and initiate further screening process that started last year. Otherwise, Japanese citizens would not be convinced.
We all hope strong leadership from Prime Minister Kan, and support from public and private sectors, with minimum resistance.
Nikkei, Japanese newspaper specialized in economy/business and politics, reported through June 17 to 19 about the New Growth Strategy of Japan under the new leadership of the Kan Administration, which was announced on June 17 and was approved in a Cabinet meeting on June 18.
The objective of the strategy is to realize “strong Japanese economy” advocated by the new Prime Minister Naoto Kan by creating new demand in 4 sectors of environment, healthcare, tourism and Asia to create total of 5 million jobs by 2010. The target economy growth is to mark real GDP (taking inflation into account) growth at 2% and GDP growth not taking inflation into account at 3% in average over the next 11 years. And the policy is to turn rate of increase in consumer price index from negative to positive in 2011 and get out from deflation.
1. Summary of the New Growth Strategy
Chapter 1: Objectives of the New Growth Strategy
Realize strong economy, finance and social security
Chapter 2: Policy of the New Growth Strategy
Consolidated reorganization of economy, finance and social security
Chapter 3: Policy of the 7 strategic fields/focuses and target outcome
Details explained later in the article.
1) Target 2020
(1) Growth to achieve at least GDP of 2% (taking inflation into account) and of 3% (not taking inflation into account).
(2) Turn rate of increase in consumer price index from negative to positive by the end of 2011 (to terminate deflation)
(3) Decrease unemployment rate below 4% at an early stage.
2) Measures to achieve Target 2020
The Government Strategy Projects consist from 7 fields. The 7 fields are the 6 major fields (focuses) from the growth strategy announce in December 2009 as mentioned in the previous article How Japan's Growth Strategy Should Be? including environment/energy, healthcare, Asia, tourism/local community activation, science/technology, employment/human resources, plus newly added “finance”.
(1) Gradually lower corporate tax (effective tax rate) to the level of other major countries.
(2) Establish medical stay visa.
(3) Promote infrastructure export targeting mainly Asia by collaboration between public and private.
(4) Decentralization of people having holidays (execution from 2012 if possible).
(5) Create “Integrated Exchange” by 2013 that trades deals bonds & securities, finances and products.
3) Targets to achieve
Create new demand and jobs
Sector / Demand (trillion yen) / Jobs (million)
Environment / 5 / 14
Healthcare / 5 / 28.4
Asia / 1.2 / 0.19
Tourism / 1.1 / 0.56
Total / 12.3 / 4.99
2. Summary of the Government Strategy Projects consisting from 7 fields
1) Environment / Energy
(1) Accelerate expansion of regenerable energy: to expand the market size to 10 trillion yen
Implement a system purchasing all regenerable energy such as wind & water power and biomass, implement smart grid (next generation transmission network); promote construction of wind power and geothermal generation.
(2) Create “Environmental Future City”: to expand environment/energy market to more than 50 trillion yen and create 1.4 million new jobs
Establish new law necessary for deregulation and tax measures; export know-how of urban development to overseas such as China.
(3) Revitalize forest / forestry: to establish foundation competitive against imported timber within 10 years, and make self-sufficiency ratio of timber over 50%.
Implement new “Forestry Management Plan” and support management strengthening attributing to upsizing; strategically allocate budget for woods and fiends management, and implement a system directly supporting forest management / environmental preservation.
2) Healthcare (Medical, Nursing etc.)
(1) Expand proliferation of advanced medical: to expand new medical equipments/pharmaceuticals and regeneration medicine, to generate positive economic effect of 700 billion yen/year.
Build consortium including medical organizations and administrations in the fields of cancer and dementia, and invest strategically research cost and talent; simplify evaluation procedure of advanced medical; abolish “drug lag” (new drugs launched in Japan after approved in western countries).
(2) International medical exchange: to have 500,000 people equivalent to 10% of Asia demand visit Japan, to generate positive economic effect of 1 trillion yen/year.
Accept more patients from abroad; implement new “medical stay visa”; enable medical treatment by non-Japanese doctors and nurses in Japan.
3) Leveraging economic growth of Asia
(1) Expand overseas business of infrastructure industry: to sign orders for overseas plant of 7000 billion USD to create 19.7 trillion yen market.
Establish Government Strategy Project Committee and strengthen top sales; expand function of public finance such as JBIC (Japan Bank for International Cooperation)
(2) Lower effective corporate tax rate and promote Japan as hub of Asia: to double interaction of resources between Japan and other Asian countries.
Lower effective corporate tax rate to the level of major countries; pay attention to obtaining tax revenue source including increasing/expanding taxation base; develop tax measures etc. as incentives in attracting foreign capitals; all to be implemented from 2011.
(3) Promote and increase development of global talent and acceptance of advanced talents: to accept 300,000 foreign students.
Implement “Point System” covering western and Asian countries; treat immigration control favourably depending on work history and achievements; support so that more Japanese students would have international experience.
(4) Develop and execute intellectual property strategy / Cool Japan overseas roll out: to acquire content revenue of 1 trillion yen from Asia.
Establish a strategic organization of science, technology and innovation to drive standardization of Japanese technology; strengthen digital distribution of Japanese software; prevent proliferation of pirated copy in overseas market.
(5) Establish Free Trade Zone for Asia Pacific: to double interaction of resources between Japan and other Asian countries.
Develop basic policy regarding comprehensive economic alliance/collaboration such as EPA (Economic Partnership Agreement) by the autumn of 2010; promote accepting talents in medical and nursing fields by embedding system of accepting nurse and care worker candidates to Japan from abroad based on EPA.
4) Tourism oriented country / Activating community
(1) Create “General Special Zone System” and promote Open Sky: to increase foreigners in Japan to 25 million, to generate positive economic effect or 10 trillion yen and create 560,000 new jobs.
Create International Strategic General Special Zone targeting urban development of certain cities that will be the economic growth engine; special treatment in deregulation and tax in improving infrastructure; make Haneda Airport “International Airport that operates 24 hours”.
(2) Increase foreigners staying in Japan and decentralize people having holidays: to achieve target of 2.5 million foreigners staying in Japan and then increase to 30 million.
Speed up procedures to issue visa for foreign tourists; study to revise law related to public holidays such as decentralizing holidays by region; all to be implemented from 2012.
(3) Expand used housing and reform market: to double to 20 trillion yen.
Establish synthetic plan including construction inspection/assurance, proliferation of housing history information; set new energy saving standard for housing.
(4) Open public facilities to private: to expand business size of disposal business management right by PFI to 10 trillion yen.
Open to private construction management by public sector; dispose of business management right by PFI (Private Finance Initiative) system leveraging private capital.
5) Science / Technology
(1) Strengthen global competitiveness and develop talent: to increase to over 100 research centres ranked top 50 globally in each fields.
Improve “leading post graduate schools” responsible for advanced researches; leverage talents such as post doctorates.
(2) Leverage information communication technologies: to realize “FTTH (Fibre To The Home” that makes all households able to benefit from broad band services.
Improve electronic administration enabling one stop use of information communication technologies at any time; utilize information communication in medical, nursing and education.
(3) Expand R&D (Research & Development): by expanding total R&D cost of public and private to over 4% of GDP.
Strategic organization responsible for science, technology and innovation will develop cross functional execution plan.
6) Employment / Human resource
(1) Unify kindergarten and nursing schools etc.: to eradicate by 2017 children waiting to enter nursing schools regardless of how their parents work.
Abolish requirements to enter nursing schools; establish service supply system such as users being able to freely choose facilities and business owners freely can set prices.
(2) Implement “Career Rank” system and support work-force etc.: to optimize employment rate to 80% and decrease part-time jobber to 1.24 million which is minus 40% from the peak.
Create system of evaluating vocational capability in growth fields of nursing and environment; strengthen support to people who have been unemployed for a long time.
(3) “New Public”: to make 50% of the citizen to participate in “new public” such s volunteer of their community and workplace.
Design tax system from which citizens benefit from public policy; review financial system for small organizations that support NPOs.
7) Finance
Create Integrated Exchange: to assure presence of Japan market in Asia.
Create Integrated Exchange that can trade bonds & securities, finances and products altogether by 2013.
3. Comments and evaluations from experts
There are so my challenges to overcome. Roadmap to achieve over 300 policies by 2020 has not yet been clarified. Many issues/obstacles remain such as breaking barriers among ministries, filling insufficient measures for deregulation, acquiring financial resources etc. Concrete processes are set only for 2010 – 2013 and no specific targets are set at milestones. Processes to achieve the targets are left to each ministry; therefore, many experts point out it is quite possible that policies that truly need to be executed will remain unexecuted. It is not easy to realize GDP growth of 3% (not taking inflation into consideration) while increasing consumption tax that Prime Minister Mr. Kan clearly implied to study to implement on June 17.
Comments and evaluation from 5 experts are as below.
1) First commentator / evaluator (Economist)
Focusing on environment and healthcare is good. Making Haneda Airport international that operates 24 hours is something that could not have been challenged when LDP was the ruling party.
2) Second commentator / evaluator (Economist)
Productivity improvement is vital for an economy when population is decreasing. Deregulation in healthcare and nursing is insufficient.
3) Third commentator / evaluator (Economist)
Stance of overcoming deflation by collaboration with the BOJ (Bank of Japan) is good. Policy from the supply side such as deregulation is desirable from the perspective of achieving both growth and sound financial status.
4) Forth commentator / evaluator (Professor)
Balancing of the policies has been improved but feasibility is a question. Blueprint for restructuring finance and social security is necessary.
5) Fifth commentator / evaluator (Professor)
Target of overcoming deflation by collaboration of the government and BOJ can be evaluated but lacks detail or specifics excluding lowering corporate tax. GDP growth of 3% (not taking inflation into consideration) is insufficient.
4. The author’s thought
Comments and evaluations from the 5 experts are all valid. The DPJ, the current ruling party, would need time to restructure and reorganize to realize strong economy, finance and social security, after LDP had ruled for 50 years making Japan as it is today. Although it might lack in details or specifics, roadmap and milestone targets, the new Kan administration did announced clearly the policy. Having said that, the situation is extremely urgent and if it should take too much time Japan would end up like Greece, as many experts point out, and therefore it is highly more concrete roadmap, milestone targets etc. are expected to follow soon.
Breaking various barriers and financial resources are the two major challenges.
The former is about game/power change and change in culture. Prime Minister Mr. Kan is from a family of non-politician (unlike many other politicians in Japan who become prime ministers) and has made an apology statement against bureaucrats when he was the Minister of Health and Welfare, so if he cannot achieve, it is probably that no one else can achieve.
The latter can only be achieved by increasing revenue (i.e. tax) and/or decreasing annual expenditure (i.e. cost). On June 17 Prime Minister Kan clearly implied that he is thinking of increasing (doubling) the consumption tax. It is understandable but other measures should be taken before increasing consumption tax such as eradicating practice of high-level government officials taking jobs in the private sector, slashing number / salary etc. of people in the Congress, and initiate further screening process that started last year. Otherwise, Japanese citizens would not be convinced.
We all hope strong leadership from Prime Minister Kan, and support from public and private sectors, with minimum resistance.
2010年5月23日日曜日
Can Shopping Refugees Be A New Business Chance?
Osaka – Sunday, May 23, 2010
A recent popular morning TV news programme in Japan reported on a new social issue of “Shopping Refugee”. This is as a result of aging society, nuclear family and strategy/M&A of retailers (supermarkets). Possible new products and services could help shopping refugees if they can afford such new products and services.
1. What are “shopping refugees”?
Shopping refugees are those people who are forced to do shopping at large supermarkets that are far to go on foot instead of local shopping areas which are only a few minutes walk. Most shopping refugees are elders living alone (i.e. not with their children) in not scarcely-populated regions but in comparatively large cities of local region.
2. What is the traditional shopping style vs. new shopping styles of younger generation in Japan?
1) Traditional shopping style of today’s elders
Japanese people used to shop almost daily at nearby shops of groceries, greengrocers, fish and meat shop etc. and/or local small supermarket in local shopping areas on foot. Typical housewives used to do all her housework in the day and decide what to cook for dinner (evening meal) and go shopping on foot then cook. Elders today are used to this shopping style.
2) New shopping styles of younger generation
There are varieties of styles, with diverse lifestyle of younger generation. Some people shop in traditional style, similarly to how their mother and grand mothers used to. Some others position shopping as their leisure and shop during day time. Some others, especially people who work, shop at late evening. And some others mostly shop at weekends, buying foods for an entire upcoming week.
Depending on where they shop, some people walk to the supermarket, some go by bus and some drive to shop.
3. What are the factors for then change in shopping styles and emergence of shopping refugees?
1) Large retailers/supermarkets and their M&A
In line with economic growth of Japan, large supermarkets such as Daiei, Aeon, Jusco and Saty emerged and expanded their business aggressively nationwide. This completely changed the retailing industry map in Japan and also the places where majority of the population do shopping.
Such large supermarkets first opened their shops in city centre such as shopping mall in the front of the stations then to shopping area of residential area which housewives still could go on foot. A few such supermarkets now are open until late at night (e.g. 22:00 and even 24:00 for some) to meet their customer needs of today. Then, many large ones opened in suburbs which the transportation would be car.
Together with low birthrate meaning decrease in total population, retailing industry became saturated, leading to restructuring and M&A of the industry and each retailers. This has resulted in closing of supermarkets in shopping area in cities higher proportion of large ones in suburbs.
2) Nuclear family
In line with economic growth, more people stopped living with their parents (elders) after marriage and nuclear family became pervasive. There are many reasons and backgrounds to this, such as less jobs are available local regions, more people working companies that operates nationwide and/or worldwide meaning more people are re-located, change in values and attitudes in majority of Japanese people to name just a few.
3) Aging society
Attributing to low birth rate, Japan has become one of the countries suffering from severe aging society. And together with pervasive nuclear family mentioned above, this resulted in many elders living alone, forced to look after themselves, including daily shopping.
4) Car society
In line with economic growth, car became popular, and going shopping by car became popular for some families, both in large cities where there are good public transportation and local regions where car is the only transportation for families.
5) Working women and mothers
With economic growth then recession of the last 2 decades, and introduction of “Equal Opportunities for Both Men and Women” started in 1985, females started to continue working after marriage and even after having children, although proportion still remains low compared to western countries. Many such working mothers were forced to do shopping at weekends for successful time management, and even full time housewives became more flexible in their shopping style.
4. What is the case of Takaoka City in Toyama Prefecture introduced in the TV programme?
1) Shopping refugees
Examples of shopping refugees introduced in the TV programme were all elders living alone or with her husband but not living with their children. They used to enjoy shopping everyday to nearby shopping area within five minutes walk from their house.
However, with recent closing of the shops they used to go for shopping everyday, they now need to go shopping by bus to supermarkets which are 1.5km to 2.0km from their house. This is a burden for them, in terms of both physically (catching bus and getting on and off the bus) and financially (bus fee).
This was not mentioned in the TV programme but the author assume that the shopping refugees would also miss the communication they had everyday with the local shop owners and staff members during shopping. The local shopping area had been one of the important local community and shopping refugees would no longer benefit of such community and daily warm interaction.
2) Change in Takaoka shopping environment
First, large retailer of Daiei opened in the front of the station, then Saty, another larger retailer opened its supermarket in more residential area, attracting big pie of the shopping population.
Then, Aeon opened a huge supermarket with large car parks in suburb, which attracted shoppers that used to go to Daiei and Saty, so Daiei closed its supermarket. Saty was acquired by Aeon. Opening of Aeon’s huge supermarket led to closing the traditional shops in the shopping area of that shopping refugees used to go as well.
5. What are possible solutions to save shopping refugees?
1) New delivery service
Delivering supermarket products for shopping refugees can be a possible solution. According to the TV programme, a NPO started to help shopping refugees by delivering what they bought from Aeon.
From this, the author sees a great business opportunity for Aeon. They could start a new delivery service for their customers including shopping refugees and other customer segments who need such services.
Also, the author thinks that similar service can be provided by others such as gasoline stations that are having difficulties for survival, convenience stores, and delivery service companies including JP Service as their new business.
Another possibility of provider of this kind of service is a versatile service provider. A self-employed business owner near the author’s house provide varieties of services requested by his customers as long as he can provide (such as repairing things, doing housework, taking dog for a walk, MC of wedding and other ceremonies to name just a few) and he also will do shopping on behalf of his customer per request.
2) New product
New product meeting shopping refugees is another possible solution. For example, ingredients for breakfast, lunch and evening meal can be a new product as a substitute and delivered everyday to the shopping refugees and other households per request. This new business has actually been proposed and started, first targeting busy working mothers, which can be targeted to shopping refugees.
6. What are the author’s thoughts to conclude?
Changes in shopping environment are unavoidable, and together with many other factors, shopping refugees are unavoidable but can be a great business opportunity for many companies and business owners, by creating new businesses (products and services). However, whether such new businesses truly solve problems of the shopping refugees depends on their financial affordability and whether they can continue to enjoy interaction with the local community.
A recent popular morning TV news programme in Japan reported on a new social issue of “Shopping Refugee”. This is as a result of aging society, nuclear family and strategy/M&A of retailers (supermarkets). Possible new products and services could help shopping refugees if they can afford such new products and services.
1. What are “shopping refugees”?
Shopping refugees are those people who are forced to do shopping at large supermarkets that are far to go on foot instead of local shopping areas which are only a few minutes walk. Most shopping refugees are elders living alone (i.e. not with their children) in not scarcely-populated regions but in comparatively large cities of local region.
2. What is the traditional shopping style vs. new shopping styles of younger generation in Japan?
1) Traditional shopping style of today’s elders
Japanese people used to shop almost daily at nearby shops of groceries, greengrocers, fish and meat shop etc. and/or local small supermarket in local shopping areas on foot. Typical housewives used to do all her housework in the day and decide what to cook for dinner (evening meal) and go shopping on foot then cook. Elders today are used to this shopping style.
2) New shopping styles of younger generation
There are varieties of styles, with diverse lifestyle of younger generation. Some people shop in traditional style, similarly to how their mother and grand mothers used to. Some others position shopping as their leisure and shop during day time. Some others, especially people who work, shop at late evening. And some others mostly shop at weekends, buying foods for an entire upcoming week.
Depending on where they shop, some people walk to the supermarket, some go by bus and some drive to shop.
3. What are the factors for then change in shopping styles and emergence of shopping refugees?
1) Large retailers/supermarkets and their M&A
In line with economic growth of Japan, large supermarkets such as Daiei, Aeon, Jusco and Saty emerged and expanded their business aggressively nationwide. This completely changed the retailing industry map in Japan and also the places where majority of the population do shopping.
Such large supermarkets first opened their shops in city centre such as shopping mall in the front of the stations then to shopping area of residential area which housewives still could go on foot. A few such supermarkets now are open until late at night (e.g. 22:00 and even 24:00 for some) to meet their customer needs of today. Then, many large ones opened in suburbs which the transportation would be car.
Together with low birthrate meaning decrease in total population, retailing industry became saturated, leading to restructuring and M&A of the industry and each retailers. This has resulted in closing of supermarkets in shopping area in cities higher proportion of large ones in suburbs.
2) Nuclear family
In line with economic growth, more people stopped living with their parents (elders) after marriage and nuclear family became pervasive. There are many reasons and backgrounds to this, such as less jobs are available local regions, more people working companies that operates nationwide and/or worldwide meaning more people are re-located, change in values and attitudes in majority of Japanese people to name just a few.
3) Aging society
Attributing to low birth rate, Japan has become one of the countries suffering from severe aging society. And together with pervasive nuclear family mentioned above, this resulted in many elders living alone, forced to look after themselves, including daily shopping.
4) Car society
In line with economic growth, car became popular, and going shopping by car became popular for some families, both in large cities where there are good public transportation and local regions where car is the only transportation for families.
5) Working women and mothers
With economic growth then recession of the last 2 decades, and introduction of “Equal Opportunities for Both Men and Women” started in 1985, females started to continue working after marriage and even after having children, although proportion still remains low compared to western countries. Many such working mothers were forced to do shopping at weekends for successful time management, and even full time housewives became more flexible in their shopping style.
4. What is the case of Takaoka City in Toyama Prefecture introduced in the TV programme?
1) Shopping refugees
Examples of shopping refugees introduced in the TV programme were all elders living alone or with her husband but not living with their children. They used to enjoy shopping everyday to nearby shopping area within five minutes walk from their house.
However, with recent closing of the shops they used to go for shopping everyday, they now need to go shopping by bus to supermarkets which are 1.5km to 2.0km from their house. This is a burden for them, in terms of both physically (catching bus and getting on and off the bus) and financially (bus fee).
This was not mentioned in the TV programme but the author assume that the shopping refugees would also miss the communication they had everyday with the local shop owners and staff members during shopping. The local shopping area had been one of the important local community and shopping refugees would no longer benefit of such community and daily warm interaction.
2) Change in Takaoka shopping environment
First, large retailer of Daiei opened in the front of the station, then Saty, another larger retailer opened its supermarket in more residential area, attracting big pie of the shopping population.
Then, Aeon opened a huge supermarket with large car parks in suburb, which attracted shoppers that used to go to Daiei and Saty, so Daiei closed its supermarket. Saty was acquired by Aeon. Opening of Aeon’s huge supermarket led to closing the traditional shops in the shopping area of that shopping refugees used to go as well.
5. What are possible solutions to save shopping refugees?
1) New delivery service
Delivering supermarket products for shopping refugees can be a possible solution. According to the TV programme, a NPO started to help shopping refugees by delivering what they bought from Aeon.
From this, the author sees a great business opportunity for Aeon. They could start a new delivery service for their customers including shopping refugees and other customer segments who need such services.
Also, the author thinks that similar service can be provided by others such as gasoline stations that are having difficulties for survival, convenience stores, and delivery service companies including JP Service as their new business.
Another possibility of provider of this kind of service is a versatile service provider. A self-employed business owner near the author’s house provide varieties of services requested by his customers as long as he can provide (such as repairing things, doing housework, taking dog for a walk, MC of wedding and other ceremonies to name just a few) and he also will do shopping on behalf of his customer per request.
2) New product
New product meeting shopping refugees is another possible solution. For example, ingredients for breakfast, lunch and evening meal can be a new product as a substitute and delivered everyday to the shopping refugees and other households per request. This new business has actually been proposed and started, first targeting busy working mothers, which can be targeted to shopping refugees.
6. What are the author’s thoughts to conclude?
Changes in shopping environment are unavoidable, and together with many other factors, shopping refugees are unavoidable but can be a great business opportunity for many companies and business owners, by creating new businesses (products and services). However, whether such new businesses truly solve problems of the shopping refugees depends on their financial affordability and whether they can continue to enjoy interaction with the local community.
2010年5月15日土曜日
Financial Performance of Japanese Companies Continues to Recover
Osaka – Saturday, May 15, 2010
Nikkei, Japanese newspaper specialized in business/economy, reported on May 13, 2010, that financial performance of Japanese listed companies has been continuously recovering in total. This information also went on air in most major TV news on Friday 14. Consolidated profit for fiscal year ending March 2010 was +25% vs. previous year, which was increase in profit after 2 fiscal year, largely attributing to cost reduction. The largest contributors were consumer electronics and automobile, which improved by 3.7 billion yen in total vs. previous year.
Outlook for fiscal year ending March 2011 is of further improvement; +38% for profit vs. fiscal year ending March 2010. This is largely because revenue is expected to increase after 3 fiscal years with demand increase of emerging countries, marking phase change from recovery driven by restructure to recovery driven by demand increase. However, there are risks such as high yen and price increase in resources.
1. How did Nikkei come to the conclusion?
Nikkei collected and analyzed financial data of 767 listed companies (excluding financial and new companies) that had been announced by May 12, covering 50% in number and 80% of profit, of total companies.
2. How much the financial performance of Japanese companies recover?
In total, sales for fiscal year ending March 2010 decreased by 12% vs. previous year but turned to black with drastic cost reduction by each company after the worldwide economy crisis broke out in the autumn of 2008. Quick economy recovery of emerging countries such as China and India also contributed to their financial performance recovery. As a result, profit was better by 13% than estimation as of February 2010, meaning that financial performance of Japanese companies are ongoing with speed above expectation.
Looking by industry, 19 out of 32 recovered. The total amount of profit recovered was 2 trillion yen for consumer electronics and 1.7 trillion yen for automobile. These two industries covered up deterioration of steel, maritime trade and trading companies, and in total recovery of almost 2.4 billion yen. As for some specific companies, refer the table below.
Improvement in Financial Performance of Some Major Companies
(Source: Nikkei, translated by the author)
Company Name / Amount (billion yen)
Hitachi / 353.4
Panasonic / 353.3
Toshiba / 304.2
Toyota / 851.8
Nissan / 380.4
Honda / 174.4
3. What contributed to the recovery?
The biggest contributor was restructuring including fixed and variable cost reduction. Honda reduced sales cost by over 420 billion yen, resulting in double in profit even though the revenue decreased by 14%. A vice president of Honda commented that the biggest reason for revenue recovery is the fact that they made much effort in cost reduction. Cost reduction of Toyota totaled 1 trillion yen (negative effects of the worldwide recalls were within their expectation) and 880 billion yen for Panasonic.
4. What is the outlook for fiscal year ending March 2011?
Sales for fiscal year ending March 2011 is estimated to go back to growth by 7% from the previous year, which is expected to contribute to further profit increase. Also, financial performance recovery is estimated to expand to 25 industries from 19. With recovery in purchase order from Asia, machinery and precision instrument also are estimated to return to black.
5. What are the 3 possible risks?
The first possible risk is high yen. This is a negative factor for export-oriented companies (most Japanese manufacturers are export-oriented); increase in cost of resources leads to cot up in wide a range of industries. For example in the case of Nippon Steel, if purchase cost of iron and steel stays at high level of April-June, it would result in 450 billion loss unless it can be reflected in pricing.
The second possible risk is negative effect from the fact that demand stimulation measures of each country aimed at driving sales of digital consumer electronics and automobiles is to come to end. For example, in Japan, incentives are given to consumers who purchase green products and services specified by the governments (e.g. automobile, consumer electronics, reforming house) which has been contributing to stimulating consumer spending but this incentive is to end soon.
The third possible risk is negative effect of weak economy of Greece on worldwide economy recovery.
6. What is the requirement for further recovery despite the possible risks?
Further improvement is possible if performance recovery effect is expanded to household and equipment investment sectors. This is because the profit outlook for 2010 is 60% of the peak, which was in 2008, meaning that there are some room for further recovery.
Nikkei, Japanese newspaper specialized in business/economy, reported on May 13, 2010, that financial performance of Japanese listed companies has been continuously recovering in total. This information also went on air in most major TV news on Friday 14. Consolidated profit for fiscal year ending March 2010 was +25% vs. previous year, which was increase in profit after 2 fiscal year, largely attributing to cost reduction. The largest contributors were consumer electronics and automobile, which improved by 3.7 billion yen in total vs. previous year.
Outlook for fiscal year ending March 2011 is of further improvement; +38% for profit vs. fiscal year ending March 2010. This is largely because revenue is expected to increase after 3 fiscal years with demand increase of emerging countries, marking phase change from recovery driven by restructure to recovery driven by demand increase. However, there are risks such as high yen and price increase in resources.
1. How did Nikkei come to the conclusion?
Nikkei collected and analyzed financial data of 767 listed companies (excluding financial and new companies) that had been announced by May 12, covering 50% in number and 80% of profit, of total companies.
2. How much the financial performance of Japanese companies recover?
In total, sales for fiscal year ending March 2010 decreased by 12% vs. previous year but turned to black with drastic cost reduction by each company after the worldwide economy crisis broke out in the autumn of 2008. Quick economy recovery of emerging countries such as China and India also contributed to their financial performance recovery. As a result, profit was better by 13% than estimation as of February 2010, meaning that financial performance of Japanese companies are ongoing with speed above expectation.
Looking by industry, 19 out of 32 recovered. The total amount of profit recovered was 2 trillion yen for consumer electronics and 1.7 trillion yen for automobile. These two industries covered up deterioration of steel, maritime trade and trading companies, and in total recovery of almost 2.4 billion yen. As for some specific companies, refer the table below.
Improvement in Financial Performance of Some Major Companies
(Source: Nikkei, translated by the author)
Company Name / Amount (billion yen)
Hitachi / 353.4
Panasonic / 353.3
Toshiba / 304.2
Toyota / 851.8
Nissan / 380.4
Honda / 174.4
3. What contributed to the recovery?
The biggest contributor was restructuring including fixed and variable cost reduction. Honda reduced sales cost by over 420 billion yen, resulting in double in profit even though the revenue decreased by 14%. A vice president of Honda commented that the biggest reason for revenue recovery is the fact that they made much effort in cost reduction. Cost reduction of Toyota totaled 1 trillion yen (negative effects of the worldwide recalls were within their expectation) and 880 billion yen for Panasonic.
4. What is the outlook for fiscal year ending March 2011?
Sales for fiscal year ending March 2011 is estimated to go back to growth by 7% from the previous year, which is expected to contribute to further profit increase. Also, financial performance recovery is estimated to expand to 25 industries from 19. With recovery in purchase order from Asia, machinery and precision instrument also are estimated to return to black.
5. What are the 3 possible risks?
The first possible risk is high yen. This is a negative factor for export-oriented companies (most Japanese manufacturers are export-oriented); increase in cost of resources leads to cot up in wide a range of industries. For example in the case of Nippon Steel, if purchase cost of iron and steel stays at high level of April-June, it would result in 450 billion loss unless it can be reflected in pricing.
The second possible risk is negative effect from the fact that demand stimulation measures of each country aimed at driving sales of digital consumer electronics and automobiles is to come to end. For example, in Japan, incentives are given to consumers who purchase green products and services specified by the governments (e.g. automobile, consumer electronics, reforming house) which has been contributing to stimulating consumer spending but this incentive is to end soon.
The third possible risk is negative effect of weak economy of Greece on worldwide economy recovery.
6. What is the requirement for further recovery despite the possible risks?
Further improvement is possible if performance recovery effect is expanded to household and equipment investment sectors. This is because the profit outlook for 2010 is 60% of the peak, which was in 2008, meaning that there are some room for further recovery.
2010年5月5日水曜日
Will Children’s Day in Japan be Passed On?
Osaka – Wednesday, May 5, 2010
May 5, the last day of Golden Week long holiday, is Children's Day in Japan. The national holiday is an occasion for Japanese families to celebrate the well-being of their children. May 5 was traditionally a festival for boys known as Tango no Sekku. However, this changed in 1948 when it became a day of celebration for all children.
1. What are the traditional customs associated with the day?
1) Flying carp streamers
On this day, families often fly carp streamers outside their homes to represent strength and success, and flying carp streamers are seen in many sight seeing spots. For example, tens of carp streamers are set to fly above/across the river of Oboke-Koboke in Tokushima Prefecture, which is well known for enjoyment of riding a boat down the river.
2) Dolls of famous heroes
Some families also display samurai warrior dolls of famous heroes inside their homes. The dolls symbolize strength.
Originally Japanese dolls were not children's toys to play with. In ancient times, dolls were used as effigies to rid people of misfortune and disease. It was only after the Edo period that they were made for the appreciation of annual events such as Hina Matsuri, the Girls' Festival, explained in the previous article Will Doll’s Festival Celebration Be Passed On?, and Tango No Sekku, the Boys' Festival.
After the Meiji period, dolls made of celluloid and rubber were introduced from Western countries. Barbie dolls became very popular in Japan at the end of the 60's.
Foreigners (non-Japanese people) may consider geisha dolls or those of women in kimonos to be typical Japanese dolls. They are generally quite expensive because each part of the dolls is made by hand and silk is used for their kimonos. Their faces must be painted by master craftsmen.
3) Kabuto hats
Kabuto hats, symbolize strength, similarly to dolls of famous heroes. Kabuto is a kind of helmet put on by samurai warriors. Kabuto hats are made with almost zero cost and with ease using with large paper (sometimes newspapers) by Origami methodology.
4) Bathing with iris leaves in water
Other customs associated with the day include bathing with iris leaves in the water for good health and well-being. Very often, long iris leaves are tied around the heads of boys while bathing. The origin of this custom is not clear. However, the iris leaves is called “Sobu” which is homonym of game/match/competition, and it is possible that this is the origin of the custom.
5) Rice cakes wrapped in oak leaves
The other customs associated with the day is eating rice cakes wrapped in oak leaves called kashiwamochi. This custom is originally eating chimaki, rice cakes without azuki bean inside, wrapped completely in bamboo leaf, similarly in a way samurai warriors used to take their food out. Eating kashiwamochi, which is more popular kind of rice cakes with azuki red bean inside, became the popular custom, replacing eating chimaki.
6) Measuring height
To see how children are growing with well-being, parents used to measure how tall their children are on this day by marking on a pillar inside their house. They could see the growth by comparing with the mark of the previous years. With annual health checkup at school today and there is no need to measure, this custom is no longer popular.
2. How are custom performed today?
It is quite prominent that like other traditional customs, the above customs are actually performed by less family today, which is a pity. For example, the author wanted to take photo of flying carp streamers and post it as well with this blog article because she did see a few around her house until a few years ago but she found none this year. (The photos posted are of free online photos.)
To the author, the customs has more importance and meaning with low birth rate, a serious social issue in Japan. I fact, it was announced May 4 that number of children has been on the decrease 29 consecutive years. It is quite possible that one reason that above customs are performed less today is the fact that there are few households now that have children.
It is under such circumstance that a special documentary TV programme went on the air on May 3, about a well-being of a family with 3 boys and 5 girls living in an island of Kagoshima prefecture, southern Japan. Since 1 boy and 1 girl had already left home to go on studying in senior high school and university in mainland, so the programme was mainly about the remaining 6 children. Nevertheless, the message of the programme was quite clear; wishing and encouraging people to raise as many healthy, well-being children as possible.
May 5, the last day of Golden Week long holiday, is Children's Day in Japan. The national holiday is an occasion for Japanese families to celebrate the well-being of their children. May 5 was traditionally a festival for boys known as Tango no Sekku. However, this changed in 1948 when it became a day of celebration for all children.
1. What are the traditional customs associated with the day?
1) Flying carp streamers
On this day, families often fly carp streamers outside their homes to represent strength and success, and flying carp streamers are seen in many sight seeing spots. For example, tens of carp streamers are set to fly above/across the river of Oboke-Koboke in Tokushima Prefecture, which is well known for enjoyment of riding a boat down the river.
2) Dolls of famous heroes
Some families also display samurai warrior dolls of famous heroes inside their homes. The dolls symbolize strength.
Originally Japanese dolls were not children's toys to play with. In ancient times, dolls were used as effigies to rid people of misfortune and disease. It was only after the Edo period that they were made for the appreciation of annual events such as Hina Matsuri, the Girls' Festival, explained in the previous article Will Doll’s Festival Celebration Be Passed On?, and Tango No Sekku, the Boys' Festival.
After the Meiji period, dolls made of celluloid and rubber were introduced from Western countries. Barbie dolls became very popular in Japan at the end of the 60's.
Foreigners (non-Japanese people) may consider geisha dolls or those of women in kimonos to be typical Japanese dolls. They are generally quite expensive because each part of the dolls is made by hand and silk is used for their kimonos. Their faces must be painted by master craftsmen.
3) Kabuto hats
Kabuto hats, symbolize strength, similarly to dolls of famous heroes. Kabuto is a kind of helmet put on by samurai warriors. Kabuto hats are made with almost zero cost and with ease using with large paper (sometimes newspapers) by Origami methodology.
4) Bathing with iris leaves in water
Other customs associated with the day include bathing with iris leaves in the water for good health and well-being. Very often, long iris leaves are tied around the heads of boys while bathing. The origin of this custom is not clear. However, the iris leaves is called “Sobu” which is homonym of game/match/competition, and it is possible that this is the origin of the custom.
5) Rice cakes wrapped in oak leaves
The other customs associated with the day is eating rice cakes wrapped in oak leaves called kashiwamochi. This custom is originally eating chimaki, rice cakes without azuki bean inside, wrapped completely in bamboo leaf, similarly in a way samurai warriors used to take their food out. Eating kashiwamochi, which is more popular kind of rice cakes with azuki red bean inside, became the popular custom, replacing eating chimaki.
6) Measuring height
To see how children are growing with well-being, parents used to measure how tall their children are on this day by marking on a pillar inside their house. They could see the growth by comparing with the mark of the previous years. With annual health checkup at school today and there is no need to measure, this custom is no longer popular.
2. How are custom performed today?
It is quite prominent that like other traditional customs, the above customs are actually performed by less family today, which is a pity. For example, the author wanted to take photo of flying carp streamers and post it as well with this blog article because she did see a few around her house until a few years ago but she found none this year. (The photos posted are of free online photos.)
To the author, the customs has more importance and meaning with low birth rate, a serious social issue in Japan. I fact, it was announced May 4 that number of children has been on the decrease 29 consecutive years. It is quite possible that one reason that above customs are performed less today is the fact that there are few households now that have children.
It is under such circumstance that a special documentary TV programme went on the air on May 3, about a well-being of a family with 3 boys and 5 girls living in an island of Kagoshima prefecture, southern Japan. Since 1 boy and 1 girl had already left home to go on studying in senior high school and university in mainland, so the programme was mainly about the remaining 6 children. Nevertheless, the message of the programme was quite clear; wishing and encouraging people to raise as many healthy, well-being children as possible.
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