Semester project

ISS Facility Management

Market analysis in Japanese Market

Semester projectpicture source: ISS home page:

http://www.dk.issworld.com/produkter_and_services/integrerede_facility_services/Pages/Integreret
_Facility_Services.aspx

Subbmited to
First Semester
Bachelor in International Sales and Marketing Management
Zealand Business College
Næstved, Denmark

Submitted on
10 january 2010

Prepared by:

Jeshan Shrestha
Nimesh Shrestha
Sarita Neupane
Dambar Timsina
Table of Contents
Table of Contents..................................................................................................................................2
.............................................................................................................................................................3
Introduction and problem identification...............................................................................................3
Problem formulation.............................................................................................................................4
Method..................................................................................................................................................4
Data collection......................................................................................................................................5
Criticism of data collection method.....................................................................................................5
Delimitation of the project ...................................................................................................................5
Situation analysis..................................................................................................................................5
Macro-environment analysis.......................................................................................................6
Political factors..................................................................................................................6
Economic factors...............................................................................................................7
Social factors.....................................................................................................................7
Technological factors.........................................................................................................8
Environmental factors........................................................................................................8
Summary of macro environment.......................................................................................9
Micro environment and Industry analysis...................................................................................9
Market area coverage.........................................................................................................9
Generic Demand and potential..........................................................................................9
Buying behaviour.............................................................................................................10
Segmentation...................................................................................................................11
Market trends and Competition within industry..............................................................11
Distribution......................................................................................................................12
Summary of industry / market analysis...........................................................................12
Resources and Competences of ISS .........................................................................................12
Summary of resources and competences.........................................................................17
SWOT Analysis / Conclusion on situation analysis..................................................................17
Strength............................................................................................................................17
Weeknesses.....................................................18
Opportunities...................................................................................................................18
Threats ............................................................................................................................19
Possible Business Model and its impact.............................................................................................19
Innovation regarding Supply Chain Management..............................................................................21
Financial consideration.......................................................................................................................22
Legal consideration for Japanese market...........................................................................................22
Final conclusion and recommendation...............................................................................................23
Refrences............................................................................................................................................24
12. References....................................................................................................................................24
Appendix / Diary................................................................................................................................25
Working plan.............................................................................................................................25
Job specification who has been done........................................................................................25
Introduction and problem identification
japan is a favorable investment destiny for foreign capital and multinationals. Many European
companies are nowadays enjoying the opportunities of doing business in japan.

ISS is one of the world leader international company in its market areas. Facility management,
security services, cleaning services, support services, property services and catering services are the
business areas operating its business with core values honesty, responsibilities, entrepreneurship and
quality of the ISS.
Before entering a market, doing an analysis is essential action way to evaluate the opportunities of
the market in relation to one business. In this perspective, we have been asked to conduct a market
analysis of japan in order to assess the potentialities of the japanese market. In other words, the
purpose of our research is to increase the understanding of the business environment in japan by the
management of ISS.
Problem formulation
In this research, we will analyze the business environment of japan, at the macro-level as well as at
the particular industry of facility management. Later on, we will discuss the possible consequences
of ISS entry on the japanese on the company actual business model, innovation measures on the
supply chain, the financial and legal considerations.
Issue 1: How is the general business environment in japan?
Issue 2: What are the characteristics of the facility management industry?
Issue 3: Resources and competences
Issue 4: What are the possible consequences of ISS entry on the japanese market, on the company
business model?
Issue 5: Which innovative measures could be taken in order to optimize the supply chain of ISS?
Issue 6: What kind of financial issues have to be into considerations, if entering the market?
Issue 7: What are the legal implications?

Method
This report is basically focused on market analysis of japanese market in facility management. We
will go through inductive approach under phenomenological philosophy. we will do the financial
benchmarking through deductive approach under positivism philosophy. To find if japanese facility
management industry is suitable for economic opportunities or not.

The environment analysis was based on the PEST model. PEST analysis stands for Political,
Economic, Social and Technological analysis. This model is used to describe the macro-
environmental factors of a given country. Another used model is the SWOT analysis. SWOT
analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities,
and Threats involved in a project or in a business venture1. David A. Aaker’s outline of market
analysis has been used to analyze the demand, discuss the segmentation of the market, analyses
customer behavior and others market issues.

And the next phase we will discuss about the consequences on business model by entering the
japanese market, measure taken to optimize supply chain and legal consideration on the basis of our
SWOT analysis.

1
http://en.wikipedia.org/wiki/SWOT_analysis ( 04-12-2010) 10:20
Data collection
Most of the data we will collect are secondary. Our analysis will also base on the primary data like
ISS home page, annual report etc. We will look around trade report, industries association report,
especially CIA the fact book and the country commercial guide. In addition we will pass through
company and competitor annual report and home pages.
Our data are mainly from online based research. We have been on several of web site in order to
collect data and information. A list of visited web sites can be seen on the reference list. The
collected data are among others, annual reports, different press release, academic publications etc.

Criticism of data collection method

Due to the time limitation, we could only have access to online data. The problem is we cannot
verify the information we collect from the internet. So it is kind of risky for a company to base its
decision on these data analysis.
But the advantages with the internet research are the cost and the time. Indeed, internet based
research, content analysis is cheap and less time consuming. It would have been very useful to add
to these secondary data, some primary qualitative data like in dept interview. But as mentioned
earlier, the time was an issue here.

Delimitation of the project

The first limit is the time. We had only one week to conduct a complete market analysis. This, in
our eyes, was not enough. This issue had some consequences on the research methods, specially the
data collection.
Since we did not have enough time, we chose to take one company for the industry and the
competition analysis.

Situation analysis
It is very important to know external environment to understand how the situation going on
concerning the target business and how the situation can affect the business which is going to be
played. Overall macro environment and then industry environment analysis could be the most
interesting factor to find actual environment assumption.

Macro-environment analysis

With its population of 126 million2, on a total area of 377,915 sq.km, japan is the world’s second
largest economy of the world.

This section is the place to analyze all the forces that affects industries in japan. In order to do so we
will use the PEST model.

Political factors

Japan is a political stable country. It has a parliamentary government with a constitutional

monarchy. Japan has adopted european civil law system with english-american influence3. Business
groups and trade unions are the political pressure groups in this country. International organization
like: ADB, AFDB, APEC,ASEAN have active participation of Japan.

The new coalition government, led by the Democratic Party of Japan (DPJ) with Yukio Hatoyama
as Prime Minister, is the first government not led by the LDP in the 16 years. This has meant a
departure from the ‘iron triangle’ politics of the LDP, business and bureaucrats, which created deep-
rooted and vested interests amongst those wielding power4.

2009 was a politically exciting but economically depressing year for Japan. It was the first time in
16 years that the government had been led by a party other than the Liberal Democratic Party
(LDP), but also a year in which Japan suffered its largest decline in GDP in half a century. The year
2010 is to be another difficult and challenging year, with economic deflation necessitating the
adoption of a new growth strategy and a July upper-house election which could create a historical
watershed of Japan’s politics5.

2
https://www.cia.gov/library/publications/the-world-factbook/geos/ja.html (04-12-2010) 11:00
3
https://www.cia.gov/library/publications/the-world-factbook/geos/ja.html (04-12-2010) 11:02
4
http://www.eastasiaforum.org/2010/01/25/japans-political-watershed-and-its-economic-challenges/ 04-12-2010)
11:24
5
http://www.eastasiaforum.org/2010/01/25/japans-political-watershed-and-its-economic-challenges/ (04-12-
2010)11:05
Economic factors

japan's economy is the second largest economy of the world.

• In 2009 est., the GDP was $4.149 trillion (purchasing power -based)6 fourth position on
country comparison to the world.

• GDP in real growth rate 3.7%.7

• Per capita GDP (2009 est.): $ 32,600 (exchange rate-based)

• unemployement rate is 5.2%

• liberal fiscal and monetary policy

• positive balance of payment which is 142.3 billion us dollor est. in 2009

• low interest rate-based

• decreasing currency rate

• negative inflation rate

Japan’s financial markets have now stabilised from the after-shocks of the Lehman Brothers
collapse of September 2008, after the Japanese economy bottomed out sometime around March
2009, but economic recovery is still very slow and the level of economic activity, as shown in
various indices, is still below pre-crisis levels8.

In Purchasing Power Parity GDP, japan already has the biggest economy. Export growth continues
to be a major driver of japan’s rapid growth. Most of the economical factors are positive to enter the
japanese market but unemployement rate 5.2 percent make ISS difficult to find workforce as well as
decreasing currency rate in comparision of dollor and negative inflution rate and low GDP invite
challenges to the ISS.

Social factors

The population growth rate is negative . japan is very concerned about its population growth and
has attempted with mixed results to implement a strict birth limitation policy. With a life expectancy
about 82.17 in average, the women life is 85.66 years and for the men it is at 78.87 years9.

6
https://www.cia.gov/library/publications/the-world-factbook/geos/ja.html (04-12-2010) 12:00
7
Hands out source provided by morten ( economics teacher)
8
http://www.eastasiaforum.org/2010/01/25/japans-political-watershed-and-its-economic-challenges/ 8:20 5-12-2010
9
https://www.cia.gov/library/publications/the-world-factbook/geos/ja.html (05-12-2010) 08:25
The literacy rate is 99% and the main language japanese.

According to the 2009 estimates by japan’s National Bureau of Statistic, the total number of the
total unemployment rate stood at 4.0%.

Year Unemployment rate

2007 5.00%
2008 6.20%
2009 5.6.00%
2010 5.20%

Figure1: japan’s unemployment rate10

• poverty elimination

• exclusive income level and strong economy

are the attractive indicators of japan for ISS facility management.

Technological factors

“the first productive force” by one of the japanese Leaders, science and technology have always
preoccupied japan’s political leaders. japanese science strategists see japan’s greatest opportunities
in emerging fields such as biotechnology and computers, where there is still a chance for japan to
become significant player.

Japan has established some technology cooperative relationships with the USA, Korea and the
European Union.
11

Environmental factors

One of the serious negative consequences of developed countries like japan, its industrial
development has been increased pollution and degradation of natural resources. Many analysts
estimate that japan, USA are the world’s largest emitter of carbon dioxide and other greenhouse
gases in 2009. Respiratory and heart diseases related to air pollution are the leading cause of death.
The country leaders are increasingly paying attention to the country’s severe environmental
problems.

10
http://www.economywatch.com/world_economy/japan/unemployment.html
11
Published May 2009 by UK Trade & Investment
Today japan, an active participant in climate change talks and other multilateral environmental
negotiations, taking environmental challenges seriously but pushing for the developed world to help
developing countries to a greater extent.

Summary of macro environment

The economy of the japan is the second largest in the world, after the United States with a nominal
GDP of US$4.149 trillion when measured in exchange-rate terms.

Time to time reform policies brought great improvements in the standards of living of japanese.
Especially for urban workers and for farmers who took advantage of opportunities to diversify
crops and establish villages industries. This new social condition has increased social mobility, and
expanded the scope of personal freedom. One consequence is the amelioration of employment
opportunity and the decrease of unemployment in the urban area.

Micro environment and Industry analysis

Micro environment analysis tells about the market which could affect the company business.
Factors that company have to consider. These factor could be as following.

Market area coverage

From our preliminary analysis, we can say that facility management will need when its business
area like project management, on-site management, IFS software, space management, flexible
solution etc. and its related fields are identified. On the other hand as it is business to business
market, who supply for final user and how these supplier (called customer) buy the product and
service is important.

So our potential customer are hotel, universities, offices of multinational companies, conference
halls, and different project formulation companies. when we talk about industry it cover all the new
market areas. Key player means private and public companies, project organizer, other service
supplier and government agencies for development programs and many more.

Generic Demand and potential

The hotel industry is one of the major part of japanese economy. During the development in the
last thirty year, people constantly improving requirement of appearance and quality of hotel.
The latest available statistics for 2008 indicate that Japan has approximately 60,000 hotels with 1.6
million rooms. While these numbers are not small, hotel properties remain a minor component of
real estate investment in Japan. J-REITs now manage only 41 hotels, which comprise 2.2 % of all J-
REIT properties by quantity12.

From the above information we can see hotel industry is increasing. It means that scope of facility
management is also increasing.

Most of the largest companies, by revenue, are American or Japanese. In 1996, 162 of the 500
largest companies globally were from the United States, and 126 from Japan. Only a few of the
largest companies are from developing countries. An exception is China, which has three entries in
the top 500 list (Fortune Magazine, Top 500 and Biggest revenues and increases in revenues13.

Measured by foreign assets, the distribution of the largest companies looks very much the same.
Most of the top 100 companies with largest foreign assets are from the United States, Japan, the
United Kingdom, France and Germany. In this list, Japanese companies are not as prominent.

world bank, it estimate between now and by 2020, roughly seventy percent of the world service
business will take place in Asia. It mean japan is the power house of Asia in every aspect so its role
will remains notable position. On the other side japan have policy to go for green environment and
they have policy to build green building. Foreign companies are not as much stronger then japanese
local company for this purpose.

Buying behaviour

How the customers buy and what the critical things they consider when making purchase could be
starting point to further consideration regarding segmentation, distribution and other strategy.

Regarding japanese industry, customers are big and they are working in close relation with their
supplier and customers. So it is very important to understand their procurement process. In this
contest of close relationship, company has to look their procurement process. What they focus on
for price, volume, cost or value or want to have close relationship. ISS may focus on much more
close relationship and collaboration, supply time and cost whereas other service supplier may focus
on volume and price.

On the other hand buying situation (new buy, straight rebuy and modified rebuy) is less important

12
Hotel association of japan report (2009)
13
http://actrav.itcilo.org/actrav-english/telearn/global/ilo/multinat/multinat.htm (6-12-2010)12:40
as we cannot categorize companies in any group.

Inside the industry, key players are already exist and new enter company/supplier have to adjust on
their network. To company only have to consider their way of buying and criteria that they look for
when choosing supplier.

Segmentation

japan is big market and it covers with geography. It will not possible to cover the entire country one
at a time. Most of the business also focused on geographical resigns basic. US commercial service
in japan also recommended focusing in geographical basic and they provide information as a region
basic as they have information center in most of the city.

So when entering the market it could better to choose some potential city in the beginning. As for
the example Tokyo is one of the big city in japan. It could be potential market for facility service
industry.

Inside the focused region/city company could categorized the customer as their procurement
process like focus on price and volume, focus on relationship and collaboration. Segmentation
based on buying behaviour will give access to the company use relevance strategy for separate
segment.so possible segmentation could be as following

 Macro segment: Based on city

 Micro segment: Based on buying behaviour (Procurement process) and key criteria are focus
on price and volume, focused on relationship and collaboration.

Market trends and Competition within industry

It is very important to understand the trend of market before look at the market. In japan there are
number of hotel, universities, offices of multinational companies. It means the flow of people and
level of service demand is in mature phase. It is essential to go with different focal point.

How the companies are making competition also important to analyses industry environment. In
some cases companies are able to decrease competition making upward and downward
collaboration with their supplier and distributor.
As following model in evolution in market shows that if there are number of competitors are
competing for better market share and we can say that industry is in growth phase. In the growth
phase still potential for new entrance.

Distribution

Distribution pattern of industry is important consideration before enter market. Distribution in this
context means, simplifying, typing together in supply chain flow of material and service and
information between manufacturing company and consumer customer.

Summary of industry / market analysis

Service companies have enough market all over the world. World Bank report also estimates that
by 2020 seventy percent service market will take place in Asia.

As customers are working on close relation with their supplier and customer, they must look for
better quality, delivery time, and other factor of collaboration. Buying procurement process could be
critical factor to look customer behaviour. All the customers are exist with their activity so they
must have experience and knowledge of market.

Segment and competition within this segment is considerable. First of all company have to choose
potential city at the beginning and need to work in cooperation with customer and material supplier.
After the targeted city they are require to choose potential segmentation as like what they focus on
price and volume or relationship and collaboration.

After the segment, distribution also another concern for new entrance company in any market. For
the new entrance either company have to come with innovative idea for distribution or need to
adjust on existing system.

So in conclusion companies have high potential within the industry with potential key player. All
the key players could bring threats and creates the barriers for new entrance. Without consider the
entire key player it is hard to reach potential customer.

Resources and Competences of ISS

With a major pool of skilled employees, iss is able to develop , manage and deliver
any type of support service 365 days a year . Iss recognise the importance of
competent, trustworthy and cross-trained employees as the focal point for delivering a
faultless service. 14
Iss is one of the largest cleaning company in the world . Iss is represented in more than
53 countries around the world including 36 countries in Europe , Asia , and Latin America.
It has more than 485000 employees. Iss is no. 2 largest company in Europe and no.3
worldwide. That means it can get lot of advantage in every aspects. In this project
specially we focus on those resource and competencies that really need to iss in south
japanese market.

Employees of ISS

As being the largest company iss provides better quality services through better
employees and workforce.
To run any kind of business or organization it requires creative, skilled and innovative
employees . Employees are the key responsible factors that directly or indirectly effects any
organisation.
As being the cleaning company iss should have those types of employess who has
the proper knowledge about the cleaning. Only those people who are expert in
cleaning and who are skilled in cleaning should be motivated for the job. Unskilled
people cannot do the job properly so for the betterment of the organisation they
should not take the unskilled people for the related job.
Iss works closely with its employees to constantly develop new methods, tools and
materials to improve their cleaning service, enhance the working condition of their
employees .

Managing people e is therefore a core priority at iss as well-trained and higily

motivated employees are the primary source.

Ability to provide service

This is about developing performance , in terms of your skill. Employee of any

organization should be focused in a particular area of business support or should be
more general. Ability to provide detailed customers service , manage any kind of office
operation, train an educates the new hires. High technology is the major competencies

14
http://www.issworld.com/our_services/support_services/pages/technical_insight.aspx
of the company, to introduce the latest product and exclusive quality service. The main
activity of the company is facility management, security services, cleaning services,
support services, property services and the catering services. The techonologial source
can be used to provide better service.
According to the situation the company should be able to provide the better service. What the
individual or the targeted group give priority that should be notice by the company and according to
that they should provide the service. In cleaning sector its service includes

• Single service

• Multi service

• Integrated facility service

Single service
It is that kind of service which is provided by a single person. For example daily office
cleaning.

Multi service
This is the service which cover two or more services where the clients ontains the same
satisfaction or benefits.

Integrated facility service

It includes the overall or most of the facilities provided by the iss.

Service design

For long term survival growth, company needs to constantly upgrade and improve their
service. Iss is working more than 70 years in the field of cleaning and they have set their own
cleaning standards where they operate. Iss offers efficient and flexible cleaning solution to meet
their customers, individual needs and demands. For the benefit and better service to the customer
 • Iss provides customised cleaning solutions

• Provides quality programmes for cleaning

• Skilled and motivated employees

• Ongoing quality control

• Offers the latest in efficient and flexible cleaning solution

Organisational structure and culture

Organisational structure provides the system through which the essential tasks of enterprise are
subdivided and grouped to create the processes, decision centres’ and behavioural network that
carryout the enterprise strategies. Organisational design is the structural arrangement of
grouping essential tasks and providing a behavioural networking for making decisions and co-
ordinating work flow. Organisational design supports the strategies of an enterprise and helps focus
employee behaviour.

ISS should always take in concern that

How can we gain commitment for our workers to enable achievement of organizational
goals?
How can we ensure we have a trained and competent workforce who are able to
perform
productively?
How can we sustain in other words , ensure that our workers are compatible with
the
management style and will fit on with other employees?

Ability to finance

How is the financial situation of the iss? How is the existing revenue stream and operating
income of the company as well as cost? Answer of these questions provides the level of
finance confidence of the company.

In 2009 it has generated revenue of 9.3 billion with 54 percent from cleaning service.
Goodwill
ISS is one of the world largest company which provides the services like
 Facility management

 security service

 cleaning service

 support service

 property service

 catering services

Providing the services in more than 53 countries of the world and several factors
like economic development , increased outsourcing, increased internationalization and
increased competitiveness are the powerful weapon for the South African market.
Goodwill and knowledge are reduce by money regular put a side straight line over
their estimated useful life, which is fixed based on the experience gained by the
management for each business area.
In 2009 december iss was awarded “The 2009 Frost & Sullivan Market Strategy Leadership Award
in the European market for integrated facility management(IFM).

Networking

Iss is among the worlds best service and was ranked 6 in the Global Outsourcing
100. Facility management, security service, cleaning service , support service, property
service and catering service are the main areas of the business. These all business
area and networking for supplying raw materials can be the channel for the
business.

Current financial situation

In 2009 it has generated revenue of 9.3 billion with 54 percent from

cleaning service.
Summary of resources and competences

Every organization or company has different chain of activities in terms of creating value. And
almost all companies do not disclose its process and procedures due to the competitors threatens.
That makes little bit difficult to go through the actual point of value-chain analysis. But we have
mention the important point of ISS company that are significant to create the ultimate value for the
competitive advantage.

SWOT Analysis / Conclusion on situation analysis

Strength
 Quality product and service with advance technology
 Focus on system family (all solution on its business area)
 Brand name and strong world wide ISS networking
 these are the strength symbols of business area

apart of the points mentioned above there are two points of ISS management which are admirable.

The core business strategies

the continued successful implementation of the ISS way strategy is the foundation for robust and
profitable growth in the year.
During the 2009, in line with the ISS way strategy, ISS enhanced its response to customer needs and
targeted customer segments that are most receptive to ISS's value proposition. ISS also focused on
securing service excellence in suitable services that are most relevant for integration and thereby
consistent with ISS's strategies.

Decentralized management style

All around the world management of ISS businesses are done locally. By doing so, the top
management of ISS want its different businesses to stay as closer as possible to their customers. The
business will therefore has a better understanding to its markets and its customers and then be able
to create solution which fit the customers’ needs.
 Weeknesses

 .Downturn in traditional market

 New coming in the japanese market
 increase price

In Western Europe, which is the traditional markets of ISS is still very fruitful for the company. But
the economic mood appears limit, and trends are expected to vary widely from one country to
another.

On the other hand the japanese market is very challenging. It is very important to understand the
business culture, the regulation, the business relationship in order to succeed in japan. For a new
comer, though competitions will be met. The process of implementing may require huge
investments.

Opportunities Threat
• Developing market • Concerns about the rule of law
• Stable country • Environmental issue
• Business environment improvement • Trade barriers remain
• High technology level • The competition
• Removal of international barriers
Strenghts Weaknesses
• Quality service and with advance • Downturn in traditional market
technology • New coming in the japanese market
• Increased services prices
• Focus on system family (all solution on its
business area)
• Brand name and strong worldwide
networking

Opportunities

The economy of japan is the second largest in the world, after the United States with a nominal
GDP of US$4.149 trillion when measured in exchange-rate terms. japan is one of the economy
power house in the world.

The economic reforms made in japan in the 70s and 80s had other far reaching effects as well. japan
tried to combine central planning with market-oriented reforms to increase productivity, living
standards, and technology without exacerbating inflation, unemployment, and deficit budget.

japan also opened its economy to the world for the purposes of trade and direct foreign investment.
The government efforts to promote rule of law are significant and ongoing.
Reform policies brought great improvements in the standards of living of japanese. Especially for
urban workers and for farmers who took advantage of opportunities to diversify crops and establish
villages industries. This new social condition has increased social mobility, and expanded the scope
of personal freedom.

Analysis shows that, japanese facility service management industry is big and it is increasing. There
are number of supplier working closely with key player of this industry. Rapid urbanization rate,
number of construction companies, high volume of building material supply and government
policies toward the rapid development indicates that there are going to build new building.

Threats

As with a number of other markets in this region, japanese market attractiveness has suffered from
the effects of adverse economic conditions.

Human resources function increasingly have to work in international and cross cultural
environments now a days . In addition to the normal pressures of work, HR personnel including
sales forces and service providers are now required to deal with the challenges emanating from
cross cultural differences.

Possible Business Model and its impact

Business model is the guideline for companies to operate. Business model tell how the product has
been produced, what the product mean for customer, how and who the product has been distributed.
Finally for the company making money from business. Regarding ISS, possible business model
shows that they are making money on facility management.
When ISS enter japanese market they may need to consider their present business model. Value
proposition in global market is totally different in japan. When ISS have to consider japanese
tradition of design. japan always take consider their tradition of in design. So companies have to
reconsider about value proposition of their offer.
In addition customer relationship management in global market would not work in japan. They only
focus in facility service support but in japan customer may want more than this. As we mention
above japanese consider tradition in designing, customer relation would be more collaborative.
They may need to consider to work in more closed then right now. Distribution channel also based
on target customers. Customer could be different then global perspective.

Innovation regarding Supply Chain Management

ISS is used to market its service globally through wholly or partly owned sales companies, and
through selected partner and distributors.
Entering the japanese market can be very challenging in time and cost. Duration of providing
service directly may be a complicated and time-consuming process as ISS is not familiar with
japan’s business practices and government regulations.
Application for distribution rights and establishment of own distribution channels will be difficult.
Another option is to find a reputable or well-known agent or distributor. Finding that good agent or
distribution can be tough job, considering the large database of japanese agent and distributors.
In this period of global economy downturn, most companies are reducing their cost and expenses.
So finding a cheap and efficient supply chain will be much appreciated.

Customer service
The influence of logistics on revenues takes place by creating good customer service, which is
brought about with the help of activities related to customer contact and delivery of products and
services. The good logistic system can contribute to customer service by creating a good delivery
service, supplying information on material flows or other logistics service. Customer service
consists of a mix of different service elements which are more or less important in different
situation.
Cost control
ISS needs the variety of product including huge machine for its business purpose. It means simple
cleaning material to complex security equipment. So the physical handling, moving, storage and
depreciation of its product may apply different strategies which can control cost. Like if cleaning
material is expensive in Japan than it can be imported form china which may relatively cheaper.

The most important factor is to be understand by ISS, how logistic can create efficiency and
effectiveness in a company and its whole supply chain.
Financial consideration
Nowadays, trade and ownership has become global. When entry a new market, the management
board has to evaluate some financial issues:
• A good cash flow: it requires money to invest in a new market

• fiscal and monetary policy of the country

• currency stability and
• liquidity position of company before entering the new market
• Accounting terminology and methods vary from country to country. The rules of accounting in
japan have to be understood in order to rely and avoid misinterpretation.

• The currencies issues (exchange rate): the choice of currency to sale or buy. Choice of currency
for the annual report and the exchange rate.

• Credit sales issues

• Insurance: in case of not being paid because one of the overseas customers goes out of business.
• Limitations and repatriation of profit
• Investment limitations and Taxation

Legal consideration for Japanese market

While going global is not as hard as it seems, there are very important legal issues to consider. The
first thing in general is the rule of law. Since we are talking business, the main concern is the
Business law in general. Some particular law, ruling the main aspects of the business relationship,
deserves some deep considerations. They are:

• Contract formation
• The intellectual property law (This is a major concern for westerners who do business in
japan)
• public health and sanitation related issues ( japan is very conses on public health related
issue)
• environmental protection related issues
• The anti-corruption law(Since corruption is a serious issue in japan)
• The distribution rights and licensing
• The rule governing the supplier/distributor relationship
• The marketing practice law
 • anti-dumping act (under WTO)

Final conclusion and recommendation

Our report clearly shows that japan have average of market/ industry opportunities. japan’s
sustained economic growth, role of service industries are increasing regularly generating more
opportunities that ISS can take advantage of if the company enters the japanese market.

Of course the japanese market is not free of threats. There are some socio cultural and law issues.
Some trade barriers still remain.

We believe that, based on our analysis, ISS has the capacities and the necessary assets to enter the
japanese market and the predisposition to overcome threats and face the competition.

We would like to have further research regarding customer analysis and have depth study regarding
stimulating demand. It involves end user analysis. Company may understand alternative strategy for
their marketing mix.
Refrences

12. References

 CIA- the world factbook – https://www.cia.gov/library/publications/the-world-
factbook/geos/sf.html
 FAST FACTS, International trade – www.exportvirginia.org
 Doing Business in japan .Country commercial Guide 2009, prepared by U.S. Commercial
service and U.S: Embassy tokyo, February 2009
 Investor guide- japan, How to to business
 United Nation Conference on trade & Development
 fourth 2009 http://quote.morningstar.com/stock-filing/Annual-Report/2009/12/31/t.aspx?
t=XNYS%3aOC&ft=10-K&d=b24235905eb3cc964df8ece160bdbc62v
 quarterly report 2010 http://quote.morningstar.com/stock-filing/Quarterly-
Report/2010/3/31/t.aspx?t=XNYS%3aOC&ft=10-Q&d=14fe7f1794b4e133d5809b6d56b4c
Appendix / Diary
We got project manual on 3rd dec 2010. Then mean time we use brainstorm to generate preliminary
ideas. Then we were able to figure the framework for project. After talking 2 hour we committed to
meet 4th dec 2010 with possible ideas regarding project.

Working plan

sn task responsible remark

1 Brainstorm on project topic
Discussion on ideas finding
Writing the individual job
Writing final draft
Print and submitting
Sarita and Dambar
Sarita and Dambar Distribute individual job
Job specification* We write individual job
Sarita and Dambar write & finalize the draft
Dambar

Job specification who has been done

sn Job specification responsible remark

Project framework Dambar
methodology Sarita and Dambar
Macro environment analysis Dambar
Industry/ market environment Dambar
Resource and competences sarita
SWOT analysis Dambar and Sarita
Business Model Dambar and sarita
Supply Chain Dambar
Financial consideration Dambar
Legal consideration Sarita
Final conclusion
dairy
Thanking you!