International Management: Analyzing Risks and Opportunities in Japan for Sainsbury's

This report analyzes the risks and opportunities for Sainsbury's in Japan, including cultural, political, economic, ethical, and legal factors. It identifies business opportunities such as employment, export/import, technological support, and hospitality. The report also discusses appropriate entry strategies, including joint venture, licensing, franchising, and export/import. Recommendations and suggestions are provided based on the risks.

International
Management

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
TASK 1............................................................................................................................................3
Analyse cultural, political, economic, ethical and legal risk in Japan........................................3
Identify and evaluate the business opportunities in Japan..........................................................5
Critically discuss appropriate entry strategies for Sainsbury's....................................................7
Recommendations and suggestions based on the above risk......................................................8
CONCLUSION..............................................................................................................................10
REFERENCES:.............................................................................................................................11
Books and Journals...................................................................................................................11
Online........................................................................................................................................11

INTRODUCTION
International management refers to the process of evaluation of international economics
and management of operations in business. It analyse the changes in the business environment
and formulate business strategies for smooth operations (yan Zhang and Van Den Bulcke, 2018).
It helps business manger to look forward for commerce, different culture and global economies.
This report is based on Sainsbury's. It is largest supermarket chain headquartered in London, UK.
It was founded in 1869 by John James Sainsbury and offer products and services like
convenience shops, hypermarkets, forecourt shop and supermarket. This report will include
cultural, political, economic, legal and ethical risk in japan. Evaluations of various business
opportunities in Japan is also mentioned in this report. Various entry strategies are also discussed
for Sainsbury along with the recommendations and suggestions to overcome the risk is also
mentioned in this report.
MAIN BODY
TASK 1
Analyse cultural, political, economic, ethical and legal risk in Japan.
Sainsbury is the second largest retail sector in United Kingdom which offer various
services to their customers. It is effectively operating and generates good revenues by acquiring
various brands like Asda (Zakaria and Yusof, 2020). They are planning to expand their business
in other countries for further growth. They have divided their operations in their home country
which are Argos, Sainsbury's supermarket store and Sainsbury's bank. They have captured large
market area by maintaining the quality of product and offer affordable prices. Sainsbury always
focus on the demands and wants of their customers which help them in profit generation. After
capturing the local market they are planning to set up their stores in Japan. Evaluation is
necessary to know the external factors of environment for business commencement in Japan.
Various factors like political, cultural, ethical, economical and legal risks are analysed of Japan
which are mentioned below:
 Political factors: Factors such as tariffs, bureaucracy, tax policy and trade restrictions are
included in political factors. Various government policies affect the business operations
which should be evaluated before the operations. Japan follows monarchy but political

environment is relatively favourable for business operations of Sainsbury's. Japan
maintains good relationship with other countries including US which is positive aspect
for Sainsbury. Political affairs of Japan do not affect the trade and operations as they
maintain stability in their political activities.
 Economic factors: There are various factors like exchange rates, inflation, economic
growth rate, interest rate and unemployment rate which are included in economic factors.
The GDP rate of Japan is good and they are involved in manufacturing of various
international brands like Toyota, Nissan and Yamaha. They are largest manufacturer of
electronic equipment, vehicles, ships, textiles and machines which contributes in their
GDP. Sainsbury's can generate profits in Japan because their tax policies are business
friendly.
 Social factors: Demographic and cultural trends and society refer as social factors. It
includes health consciousness, perception, cultural aspects, age distribution, career
attitudes and population growth rate (Yung and Root, 2019). Japan is very populated
country and face challenges in population growth rate. They are involving various
changes related to social factors which are helping them in maintaining the social growth
of country. Sainsbury can run their operations easily because of the harmony and peace in
the society.
 Technological factor: Factors which help businesses in growth and development with
the assistance of improved tools and techniques are termed as technology. Research and
development, change in technology, automation and technological incentives are
categorized under technological factors. Japan is known for their advanced and up graded
technology which is highly required by companies. Sainsbury's can create innovative
ideas with the help of technology. This will help them in acquiring the marketplace
according to the current market demands.
 Environmental factors: Ecological impact can affect the business operations in many
ways. Climatic changes, temperature, weather conditions, natural disaster and pollution
are included in environmental factors. Japan usually fulfil all the duties and
responsibilities which help them in maintaining clean and safe environment. Various
natural calamities affect the environment of Japan like flood, cyclones, volcanic eruption

and earthquakes. Sainsbury's establish their stores in Japan as they are taking necessary
measures to improve their environmental factors.
 Legal factors: Legal forces such as labour laws, intellectual property, industry
regulations, permits and licenses are included in legal factors. It shows the relationship
between government and businesses (Li and et.al., 2020). Employees of Sainsbury can
enjoy good profits as they provide various benefits and rights such as holidays, work
break, health insurance, pension insurance and unemployment insurance. Japan always
assist their employees in smooth operations which help Sainsbury's in employee
retention.
It is evaluated that Japan is suitable to carry out the business operations in effective
manner. It provides various opportunities to Sainsbury's in growth and expansion with the help
of technological advancements. It assist businesses and promotes harmony by maintaining good
relationships with different countries in the world especially with US.
Identify and evaluate the business opportunities in Japan.
Japan is the largest manufacturer and producer of various tools and technologies which
make them advanced and developed country. They have one of the largest economies in the
world with advanced technologies. Many businesses and organisations aim to establish their
operations in japan as they offer various opportunities for development (Muratbekova‐Touron
and et.al., 2018). Social, technological, political and legal factors are favourable which help
Sainsbury's in establishing their business in effective manner. Business friendly policies of Japan
assist in maintaining guidelines which are followed by Sainsbury's to achieve goals and
objectives. Culture, consumer behaviour, demand, pricing strategies and rules of Japan helps in
profit generation and expansion of Sainsbury's. There are various other business opportunities
are also offered by Japan which are as follows:
 Employment opportunities: Japan includes various production and manufacturing
industries which provide opportunities to the youth for employment. Sainsbury's can hire
number of people because of the large population of Japan. Sainsbury's includes various
departments like finance, IT and management which is handled by human resource. Japan
allows people to re locate themselves for their jobs and businesses in Japan. Human
resource plays important role for all the manual operations and they also assist

technological operations of business. It offers good opportunities to develop the career of
individuals with attractive packages and benefits.
 Export and import: Various raw materials are used in manufacturing process are
imported by Japan from different countries. Export and import of goods, services, labour,
material, technology, tools and equipments help businesses in making profits. Companies
located in Japan use raw materials from other parts of world which contributes in the
GDP of exporter country. Sourcing of resources and labour increase productivity and cut
down excessive cost. Japan gives priorities to quality material because its products are
exported to all over the world which build the image in positive manner. Overseas
expansion through export and import results in higher profitability.
 Technological support: Modern era needs advanced operations which reduces time and
improves quality of products. Technology reduces the labour work and manual efforts
which results in effective operations (Cunill and et.al., 2019). Japan is famous for its
technological advancements because it constantly up grade its technology according to
the current market trends. Sainsbury's can avail technological benefits and support when
they establish their stores in Japan. Technology helps in creating new and innovative
ideas so that organisations can serve the demands of targeted market in best possible
ways. Advanced technology attracts large customer base by offering quality products in
affordable prices.
 Provides space for business: Organisations who plan to set up their businesses in
different parts of world are welcomed by Japan. They provide space so that organisations
can contribute their efforts in infrastructural growth of Japan. Sainsbury's is planning to
open their store and offer products and services in Japan so that they can acquire the
marketplace. Japan promotes new businesses and provides ease in operations which help
in maximization of profits. High tech space is provided by Japan to all the organisations
who have re located their operations in Japan.
 Offer hospitality: Culture of Japan always gives respect to their guest and neighbour
countries. They maintain good relationship with others so that they create positive
environment. Rich culture of Japan gives Sainsbury's comfort and provide facilities so
that they can operate business without difficulties. The feeling of comfort helps in
improvement of performance and increase efficiency of organisation.

It is evaluated that Japan is very famous for their technological advancements. They
provide opportunities to other businesses to enter their market for growth and expansion (Braun,
2019). Their cultural and social support help other companies to achieve their prescribed goals in
effective manner. They maintain healthy relationship and create loyalty and trust which provides
mental support. Better coordination and interdependence is maintained by Japan which is helpful
for Sainsbury. Japan believes in peace and spread harmony around the world with their
innovations. New interventions are developed by Japan which helped Sainsbury's in the increase
of their sales. Supporting each other results in good economic conditions which is positive aspect
in term,s of business. Various barriers and taxes are eliminated so that organisations can enjoy
globalisation and liberalisation.
Critically discuss appropriate entry strategies for Sainsbury's
Market entry strategies help businesses in making plans how to offer products and
services in international marketplace. Every country selects market entry strategy according to
the services and products they are offer in the international market (Presbitero, 2020). Proper
planning of budget and allocation of resources is done before choosing the right entry strategy.
Sainsbury's is going to offer their products and services in Japan and establishing their store in
new market. Evaluation should be carried out which strategy is best suitable among the
alternatives for Sainsbury which help them in smooth operations. Strategies which includes less
capital investment are opted by the the companies. All the risk factors are evaluated so that
organisations can formulate policies to control them which help them in effective operations.
Market entry strategies which are selected by Salisbury's are as follows:
 Joint venture: When two or more companies combine for the commencement of
business operations then it is called as joint venture (Koontz, Weihrich and Cannice,
2020). They share profits and losses according to the agreement which is signed before
the joint venture. Sainsbury selects joint venture because it reduces the chances of risk
and losses in new market. Infrastructural and other costs are divided between partners
who are involved in joint venture. With the help of joint venture Sainsbury can
effectively understand the behaviour and choices of customers living in that particular
market where they are going to offer products. Responsibilities and duties are also
divided between partners which reduces the pressure of work and improves
performances.

 Licensing: It refers to the granting permissions to use the rights such as intellectual
property rights which includes trademarks, brand names, technologies and patents. It is
an official contract which involves licensee and licenser who agrees on varies terms and
conditions for business operations. Sainsbury's gives rights to produce products and sell
them in foreign targeted market under their brand name. It reduces the infrastructural and
managerial cost of Sainsbury's because all the operations are handled by the licensee. In
return, they get payments and royalties which help them in growth and expansion.
 Franchising: This business expansion strategy involves distribution of services and
products with the help of third party which is franchisor. Organisations give right to other
companies to use their brand name and set up outlet on their location. Sainsbury also used
this market entry strategy which help them in building brand image in international
marketplace. Sainsbury become franchisor and offer rights to franchisee for set up the
stores in international market by using their brand name. Some of the guidelines should
be followed by franchisee during the production and marketing operations.
 Export and import: It involves the buying and selling of products, raw material, labour
and capital which help in profit generation. Businesses offer their products which satisfy
the needs of customers located in international market. Sainsbury adopted direct selling
market entry strategy which eliminates the cost of middlemen or third party. Various
excessive costs, taxes and policies are eliminated with the help of direct export and
import.
These strategies are used by Sainsbury's which help them in effective market entry in
international marketplace (Capehart and et.al., 2020). These help them in enhancing their
operations and cut down the excessive cost which results in profit maximization. Before entering
a new market area, proper evaluation is necessary as it controls the risk and threats which affect
the operations of Sainsbury's. Various policies are formulated by organisation so that they can
control the risk and earn high revenues.
Recommendations and suggestions based on the above risk
 Before entering the new international market, Sainsbury's have to evaluate the political
and social environment of the new market where they want to offer the products. This
reduce the excessive cost which results in loss.

 Sainsbury should hire experienced and skills employees which contribute their efforts
towards the success of company. Proper allocation of resources should be done so that
organisation can utilize them in effective manner.
 They should survey the needs and wants of customers in targeted market which help them
in manufacturing goods and services which are needed. Surveys and reviews increase
their sale and help in smooth production and operations.
 Sainsbury should use advanced technology which help them to acquire large market share
in effective manner. Up graded technology helps in production of innovative and creative
ideas which attract more and more people.
 Organisations should follow all the political and legal laws which help in smooth
operations. Various legal policies results in heavy and unwanted taxes which results in
poor operations. Proper follow of rules and regulations help them in maintaining the
profitability.

CONCLUSION
From the above report it can be concluded that expansion is necessary for every company
as it creates brand image and helps in achieving success. International management includes the
operations which manages business operations in effective manner. Before starting the business
in foreign market, marketers need to evaluate and identifies the various opportunities and risks
factors which help them in revenue generation. This report included the study of marketplace and
cover various risks related to political, legal, social, environmental and ethical risks. Various
opportunities are identified which help them in expansion and development. This report also
included that organisation need to select the appropriate entry method which is used to enter the
international market. At the end, recommendations and suggestions are mentioned to overcome
the risks in international market.

REFERENCES:
Books and Journals
Braun, B., 2019. Building global institutions: the diffusion of management standards in the
world economy–an institutional perspective. In Linking industries across the world (pp.
3-28). Routledge.
Capehart and et.al., 2020. Guide to energy management: International Version. River Publishers.
Cunill and et.al., 2019. Thirty-fifth anniversary of the International Journal of Hospitality
Management: A bibliometric overview. International Journal of Hospitality
Management, 78, pp.89-101.
Koontz, H., Weihrich, H. and Cannice, M.V., 2020. Essentials of Management-An International,
Innovation and Leadership Perspective|. McGraw-Hill Education.
Li, J. and et.al., 2020. Community participation in cultural heritage management: A systematic
literature review comparing Chinese and international practices. Cities, 96, p.102476.
Muratbekova‐Touron and et.al., 2018. The phenomenon of young talent management in Russia
—A context‐embedded analysis. Human Resource Management, 57(2), pp.437-455.
Presbitero, A., 2020. Foreign language skill, anxiety, cultural intelligence and individual task
performance in global virtual teams: A cognitive perspective. Journal of International
Management, 26(2), p.100729.
yan Zhang, H. and Van Den Bulcke, D., 2018. International management strategies of Chinese
multinational firms (pp. 141-164). Routledge.
Yung, K. and Root, A., 2019. Policy uncertainty and earnings management: International
evidence. Journal of Business Research, 100, pp.255-267.
Zakaria, N. and Yusof, S.A.M., 2020. Crossing cultural boundaries using the internet: Toward
building a model of swift trust formation in global virtual teams. Journal of
International Management, 26(1), p.100654.