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REAL ESTATE

PROFESSIONALS in the
INTERNATIONAL CONTEXT
Dr. Jeff Gale
Ayodeji Egbeyemi
Courtney Pickard
Derek Pugh
Elaine Ferritto Calip
Jeffrey Anglada

JAPAN
The Economic Progression post World War II

Japan World War II


1937: The second SinoJapanese War broke out
1940: Japan signed the
Tripartite Pact with Nazi
Germany and Fascist Italy
Japan occupied French
Indochina
1941: Japan attacked the Allied
powers at Pearl Harbor
1942: The battle of Midway
occurred
August 1945: Atomic
bombings of Hiroshima and
Nagasaki
September 1945: The
surrender of the Empire of Japan
The leading zaibatsu (Mitsui,
Mitsubishi, Sumitomo, and Yasuda)
continued to have a commanding
control of Japans Economy

Post War Facts


1.74 million Japanese servicemen and
one million civilians died as a result of
the war
The bombing destroyed one-quarter of
the country's wealth
Rural living standards were estimated to
have fallen to 65% of prewar levels and
non rural living standards to about 35%
For about 66 major cities, about 30% of
their populations homeless
In Tokyo, the largest metropolis, 65% of
all residences were destroyed
Food shortages became a huge concern

Occupation and Reconstruction of


Japan
The Allied occupation of Japan at the end of
World War II transformed the country into a
democracy that recalled 1930s American
"New Deal" politics.
They dissolved the business conglomerates
(zaibatsu) declaring them a hotbed of
militarism
Industrial groups were also formed around
banks.
The Keiretsu structure of companies
Reconstruction efforts were lead by General
MacArthur

Japanese Constitution of 1947


The progressive constitution granted universal suffrage, stripped
Emperor Hirohito of all but symbolic power, stipulated a bill of
rights, and abolished peerage.
It also strengthened the powers of Parliament and the Cabinet,
and decentralized the police and local government
Article 9 of the Constitution was created to outlaw war and guard
against remilitarization
The Japanese government now has legislative, executive, and
judicial branches as well as local governments.

$9
1
Billion
Us
Treasury

250%
More
people

86
Year
s
funding

$7.90
6
trillion
215
Years
funding

$16
0
billion
Marshall
Plan

$42
5
Billion
US
Interstate

Economic Growth
Laws were passed to allow free trade unions
Growth Age (1950s-1973)
1964 Olympic Games were held in Tokyo
1961 the Basic Agricultural Law was enacted
1964 the New Tokaido Railway
In the early 1980s, there was pressure to open more trade
markets to more US imports
The Japanese did face economic problems in the late 1980s
Unemployment rose to 3.2 percent in 1987
October 20, 1987, the Tokyo Stock Market crashed

Stock Market Crash - What


Happened?
REAL ESTATE
Real estate values rapidly
overinflated.
Financial deregulation
increase in capital markets
and lending.
STOCKS
Nikkei 225 driven largely by
asset (real estate) market.
Gained 225% from 1985-89.
Slowdown in land prices in
1989 stock market crash in
1990.
GOVERNMENT RESPONSE
Japan tightened monetary
policy to slow too-rapid
appreciation of stocks and RE,
triggering the collapse.

Significant Industries
Automobile
While in existence in Japan since 1900, it did not
significantly affect Japan's culture until after World War II
The American "Big Three" (Ford, GM, Chrysler)
Introduction of mass production
The Korean War greatly helped the growth
By 1980, Japan surpassed the US in automobile production
Electronics
Manufactured the majority of the worlds consumer
electronics products
Foothold in the computer hardware industry
Fishing Industry
The Tsukiji Fish Market is the second largest fish market in
the world
Moves five million pounds of seafood each day

Japan Today

Economic Snapshot

Real Estate

Natural Resources

Politics

Technology

Management Principles

Economic Snapshot
Worlds 3rd Largest Economy
Fiscal deficits equivalent to 8.4% of GDP last year, and had a public-sector debt worth 243% of GDP,
both the highest among major economies
2013 GDP in Japan as of last year was worth $4.902 trillion
Most rapidly aging society in the world, with a quarter of the population already over 65 years of age.
The workforce is also shrinking, which could become a considerable drag on growth.

Immigration

Technology
Importance of Technology
Help the world
Mankind can benefit
Leader in Electronics, Auto,
Robotics
Leader in research
Access and rate of change
Technology changing at
exponential rate
Globalization
Outsourcing
Importance of Technology outside
Japan
Sell their technology to other
countries
Outsource technology
Build cars outside Japan
Import and export components

Top Companies
Auto Industry: Toyota, Nissan, Isuzu, Mazda and
Mitsubishi

Tech Industry: Sony, Panasonic, Toshiba

Current Political Environment


(2000-present)
2 Major Goals
Economic Growth
Active International role with armed
forces
International Relations
Shinzo Abe and Chinese President Xi
Jinping
Japans alliance with US
Japans relationship with S. Korea
Abenomics

Natural Resources
Strong Resources:
Fishery / Aquaculture
Agriculture
Hydroelectric Industries
Rare Earth Deposits
Weak Resources:
Worlds largest importer of
coal and natural gas
2nd largest importer of oil
Sustainability and
Conservation

Japanese Management Culture


& Principals
Kaizen ; noun.

Change for the better;


improvement

Kaizen in the workplace: Never-ending efforts

for improvement involving everyone in the


organization managers and workers alike

Japanese management Kaizen team has two

major components - maintenance and


improvement.

Lifetime employment and Seniority System

Karoshi - Death from Over Work

Zaibatsu v. Keiretsu
Current Industry Group Types
The Big 6
Horizontal relationships (spread across diverse fields)

descendants of the pre-war zaibatsu


Vertical Company Groups
held together by capital ties (large scale enterprise)
centers on a principle bank
Supplier Relationships
independent industrial manufacturers, subsidiaries, affiliates,
and suppliers
concentrates in particular industries

Japanese Management Culture &


Principals

Role of Foreign CEOs


Howard Stringer (Welsh), CEO Sony
Corporation
Stock fell 75% during his tenure
Stringer stepped down 2012
Sony hires Kazuo Hirai

Carlos Ghosn (French-Lebanese-Brazilian)


CEO of Nissan / Mr. Fix It
Aggressive downsizing campaign that turned

Nissan around from near bankruptcy


Restructuring that defied traditional Japanese
business etiquette
Mass market zero-emission electric car (RenaultNissan)

Questions?

Mount Fuji and Tokyo skyline