Morrison's Supermarkets: International Business in Japan - Report

This report provides a comprehensive analysis of Morrison Supermarkets' potential international expansion into the Japanese market. It begins with an executive summary, followed by an introduction that outlines the report's objectives and scope. The report then offers an overview of Morrison and Japan, setting the context for the subsequent analysis. A significant portion of the report is dedicated to assessing the political, economic, ethical, and cultural risks associated with doing business in Japan. It also identifies and evaluates business opportunities, including an analysis of Japan's macroeconomic environment and an application of Porter's Five Forces model to understand the competitive landscape. The report explores potential market entry strategies, with a focus on direct investment. Finally, it offers recommendations for Morrison, including strategic advice for navigating the Japanese market and leveraging the direct investment entry mode. The report concludes by providing references to the sources used in the analysis.

Running head: INTERNATIONAL BUSINESS
International Business
Name of the Student
Name of the University
Author note

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Executive Summary
The report has thrown light on the overall analysis of the international expansion of the
business of Morrison in Japan from England. The different kinds of threats, risks along with
opportunities have been discussed which helped in receiving and generating a brief overview
on the different kinds of political along with social and ethical risks which can affect the
growth of the company in a negative manner. The business environment of Japan has been
analyzed with the help of Porter’s Five Forces Model Analysis which provided a brief
overview on the threats and the rivalry from the existing firms as well.
In the Porter’s Five Forces Model Analysis, this has been noticed and analyzed that there are
no such kind of rivalry among the existing competitors in the market as there are no such
competition which will be beneficial for the overall success of the firm in the respective kind
of environment. The few instances of the market entry strategy have been taken into
consideration which helped in managing the overall aspects properly along with
understanding the advantages of adopting the same in the respective business environment as
well.
With the help of the Direct Investment Strategy, this will be beneficial for the company to
understand and gain knowledge on the local market aspects which will be appropriate for the
increase in sales of the company. Lastly, recommendations have been provided which helped
in managing and analyzing the overall aspects of growth in international market effectively.
The advantages of adopting the direct investment entry mode strategy with the Japanese local
store can be helpful in becoming more effective in the different operations.

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Table of Contents
Introduction................................................................................................................................2
Overview of Morrison............................................................................................................2
Overview of Japan......................................................................................................................3
Analysis of Political, Economic, Ethical and Cultural Risks.....................................................5
Political Risks.........................................................................................................................5
Economic Risks......................................................................................................................5
Cultural Risks.........................................................................................................................7
Ethical Risks...........................................................................................................................7
Identification and evaluation of business opportunities...........................................................10
Macroeconomics of Japan........................................................................................................10
Analysis of Business Environment of Japan with Porter’s Five Forces Model.......................12
Instances of Market Entry in Japan..........................................................................................13
Recommendations....................................................................................................................13
References................................................................................................................................15

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Introduction
The report helps in the overall analysis of the different kinds of political, economic,
cultural and ethical risks which can be faced by Morrison which is one of the British
Supermarket chains. The different kinds of identification along with the evaluation of the
business opportunities are required to be addressed with the analysis of the different
examples which will be beneficial for the overall success of the firm in an appropriate
manner. Finally, the recommendations are required to be provided which plays a major role
in expanding the business operations of Morrison in Japan.
Overview of Morrison
Morrison Supermarkets plc is the fourth largest chain of the supermarkets in the
United Kingdom wherein it is headquartered in Bradford, England. The company was
founded in the year 1899 by William Morrison who started their business as the bread and
egg butter stall in Rawson market (Groceries.morrisons.com., 2018). The market share of
Morrison till August 2017 was 10.14% which has proved that the company is ahead of Aldi
which has the score of 7%. The number of locations wherein Morrison is located is 498 stores
and the products which are being sold by Morrison supermarket are clothing, food, and
drinks, magazines along with DVDs. The number of employees working in the organization
is 132,000 till the year 2017.

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Figure 1: Morrison in Bradford, England
(Source: Groceries.morrisons.com., 2018)
Presently, this has been noticed that Morrison is trying to expand their business
operations in Japan which is situated in Asia. As the guidance of the consulting agency, the
potential investments are required to be analyzed in such a manner which will be beneficial
for their success in Japan. The mission of the entire report is to review the different kinds of
the attractiveness of Japan which will be beneficial for Morrison to expand in the respective
country regarding the return on investment which is potential in nature (Ahmadjian, 2016).
The entire report will be discussing the overview of the country Japan wherein the
major investigation of the different kinds of risks which are associated with the economy of
Japan. Furthermore, there will be a discussion of the different opportunities for Morrison to
enter into Japan market. Furthermore, the last part will be dealing with proper discussing the
overall balance of the different opportunities over the different risks along with providing
recommendations of the strategy related to the market entry strategy and techniques for the
respective company in Japan.

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Overview of Japan
Japan is one of the island countries which is situated in East Asia located in the
Pacific Ocean which is 350 kilometers from China. Japan is one of the stratovolcanic
archipelago which consists of more than 6850 islands and the entire country is subdivided
into more than 48 prefectures within eight regions. The population of more than 129 million
in Japan is the tenth largest aspect and Japanese makes more than 98%of the total population
of Japan as well (Alden & Nariswari, 2017). The capital of Japan is Tokyo wherein there are
more than 13.8 million individuals staying and the entire country is benefitted from the
highly skilled kind of workforce and this is one of the most highly educated countries in the
entire world as well.
Figure 2: Flag of Japan
(Source: Bartlett & Beamish, 2018)

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Figure 3: Map of Japan
(Source: Burt, Johansson & Dawson, 2015)
The color of the flag of Japan helps in representing that the rectangular white banner
bearing the crimson-red disc at the center wherein the flag is officially known as Nisshōki
(Burt, Johansson & Dawson, 2015). The sun plays a major role in the mythology of Japan as
this has been seen and analyzed that the emperor of Japan is the direct descendant of the
goddess sun in the Shinto religion. The following report will be discussing the detailed
analysis of the country Japan along with the analysis of the attractiveness of Japan in order to
allow the British retailer to enter into the respective market as well.
Analysis of Political, Economic, Ethical and Cultural Risks
Political Risks
In Japan, this can be noticed and identified that the emperor who is the head of the
entire state has minimal kind of power in making the different kinds of decisions. After the
Second World War, this has been noticed that the United States and Great Britain has
directed political change to a constitutional monarchy with the parliamentary government in
1947 (Cavusgil & Knight, 2015).
However, on the other hand, the political condition is stable in the economy of Japan
wherein this can be seen that the entire political freedom is classed as 1 from 1 to 7. On the
other hand, this has been noticed that Japan is politically contentious and this can hugely
impact on trade along with the foreign direct investment as well (CNBC., 2018).
Furthermore, this has been noticed that there is a huge risk of the different wars in
Japan in comparison to China and this kind of tension can affect the overall credit rating in
the financial and stock market in a negative manner as well (Coe & Wrigley, 2017).

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Additionally, this has been noticed that there is lack of the protection of the different policies
in Japan wherein internet is the major aspect wherein there is huge corruption and this affects
the overall political stability in a negative manner.
Economic Risks
After the Second World War, this was being seen that the economy of Japan has
ruined which has played a vital role in introducing the different kinds of economic risks in the
entire economy of Japan. There are huge issues related to poverty and this has been identified
from the survey that the total population which is below the poverty line is 13.5% which has
been caused due to the unemployment in the country (Deresky, 2017). The unemployment
rate is 5.7% which can affect the overall stability and growth of the different companies in a
negative manner. Contributing to them, the lifetime employment custom along with seniority
order wage system is collapsing which can affect the international business in a negative
manner (Tradingeconomics.com., 2018).
Figure 4: GDP of Japan
(Source: Deresky, 2017)

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The different international retailers such as Morrison, Woolworths, and Walmart
cannot expand their business operations in a successful manner in Japan as the working
condition is unstable in nature which will be reducing the overall market share of the
company in a negative manner as well (Gaur & Delios, 2015). From the graph, this can be
analyzed that the GDP of Japan is lower in nature in comparison to Singapore and the other
countries which have resulted in huge unemployment in the community of Japan as well.
This has been noticed that the different females in Japan are not at all work-oriented in nature
which resulted in the low rate of gross domestic product and the working conditions are not
up to the mark as well (Hennart & Slangen, 2015).
Cultural Risks
As per the socio-cultural aspects, this can be seen that there are few formal
restrictions such as on foreign direct investment. Furthermore, this has been noticed that
Japan is at high risk of the different natural disasters such as earthquakes and tsunamis which
can affect the overall effectiveness of expansion of the international business in Japan
(Hennart & Slangen, 2015). There can be the inclusion of the language barriers which can
affect the overall efficiency of the expansion of Morrison in Japan as in England and in
Japan, there will be differences in culture along with the tastes of the customers which can
prove to be a dangerous aspect of the organization in becoming more inefficient in nature
(Hitt, Li & Xu, 2016).
Moreover, in Japan, this has been noticed that the employees in the organization do
not work for the organizations, rather than they work for themselves to be praised from their
superiors who will be beneficial for their morale (Holzapfel & Schneider, 2015). However,
this kind of approach is reducing in the Japanese community and there has been an increase

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in the commercialization along with materialism which can affect the overall culture of Japan
in a negative manner.
Ethical Risks
Lastly, there are ethical risks which are being involved in the business environment of
Japan which can cause huge differences for the growth of the firm and the expansion of the
same in the Japan market (Hoppner & Griffith, 2015). There are different kinds of
environmental rules and regulations which are being maintained in Japan and this can be
difficult for expansion. Moreover, this has been noticed that Japanese strictly follow their
cultural norms and they are deeply rooted in the history and culture which is not present in
British culture.
Moreover, this has been noticed that there is a huge difference in greeting one another
as in British there is no such culture of different offerings as this is present in Japan
(Johanson & Mattsson, 2015). Due to the respective aspect of offerings, there is an inclusion
of corruption and there are differences in the work-related aspects which can affect the
expansion program of Morrison in Japan. Furthermore, while entering into the Japanese
market wherein there are few business ethics which are considered to be illegal in British
culture can be one of the major issues which will be affecting the overall aspects of
international growth of Morrison(Lasserre, 2017).

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Figure 5: Corruption in Japan
(Source: Johanson & Mattsson, 2015)
Therefore, from the above this can be concluded that there are few risks which are
being involved in the international expansion program of Morrison in the Japanese market
with the analyzing of the root causes of the different risks which are being involved in the
political along with social structure of the Japanese economy wherein Morrison will be
expanding their business.

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Figure 6: Root Cause
(Source: Madanoglu, Alon & Shoham, 2017)
From the diagram, this can be analyzed that there are different kinds of political along
with ethical restrictions in Japan which is required to be solved with proper entry mode
strategies which will prove to be beneficial in order to become more strategic in their
approach in order to become more effective while entering the Japanese market.
Identification and evaluation of business opportunities
There are different kinds of business growth opportunities which can be gained by
Morrison in expanding their business operations in Japan. It has been surveyed and known
that Japan is one of the most fast-growing developed countries in comparison to Singapore