Global Business Strategy: Specsavers' Market Entry into Japan

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Business Organizations and Environments in a Global Context
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Table of Contents
Introduction......................................................................................................................................3
Background Information on Specsavers..........................................................................................4
Background Information on the Business Environment in Japan...................................................4
Analysis of the Business Scenario...................................................................................................4
Conclusion and Recommendation.................................................................................................10
References......................................................................................................................................11
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Introduction
Globalization has impacted the whole world, resulting in a growing competition wherein
organizations are marching on with an ever increasing pace to create their mark in their
neighboring countries. Exploring and utilizing opportunities in context of Foreign Direct
Investment or FDI requires proper research and analysis as is focused by the present report that
highlights the Specsavers as the chosen organization and its exploration in Japan, as the chosen
nation in this case. Calculating and understanding the various possible factors that can impact or
obstruct the growth of an organization such as Specsavers to gain the desired result is an
essential part of this report that can help in providing a deeper understanding of the study in
hand.
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Background Information on Specsavers
Founded in the year 1983, Specsavers has gained a name in their field for over 30 years. Offering
their expert services and products across various countries, the organization has shown a
considerable contribution in the world economy. In addition to this, the organization has also
helped the economies of the nations that has come under its list by offering employment to over
30,000 individuals with almost 2000 stores and support offices (Specsavers.co.uk, 2019). A
hierarchical structure has added to the benefits of the organization in working as a team, where
the directors are responsible for their own units and employees. The organization has reflected its
growth with an overall revenue of approximately £2.6 billion globally in the year 2017. Mary
and Doug Perkins as the founders of this organization have been able to attain their goals and
objectives with the help of a joint venture partnership model. This has allowed all its partners
across the map to join hands in providing the best, both in terms of quality and cost.
Background Information on the Business Environment in Japan
Comprising of over 6,800 islands, Japan has worked its way up as a third largest nation in terms
of economic growth in the current global market. As a nation, Japan has embraced its
neighbouring countries in the recent years rather than continuing with an isolationist policy. This
has helped the nation to enhance its financial performance and contribution to the global
economy. Post World War ll, the country has surrendered their traditional financial systems to
private organizations that has enabled the nation to enhance their attempts to re-industrialize in
order to match the pace of the world (Cuervo-Cazurra, 2016). The complex political and legal
structure of the nation following a monarchy may seem confusing, although the nation allows
foreign organizations to enter and sustain in its markets due to the rules and regulations constant
for all of the nation, regardless of its leader.
Analysis of the Business Scenario
PESTLE Analysis
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An organization like Specsavers requires extensive analysis of all the factors related to the macro
environment of a nation that is Japan in this case, in order to structure expansion strategies and
plans within the nation. This can be attained with the help of a PESTLE analysis that highlights
various factors starting from political, legal and economical to technological, social and
environmental (Kennedy, 2016).
Political factors
Intervention of the political parties and government in an economy is focused in this section,
wherein various laws and policies are highlighted that can affect the business performance of an
organization such as the Specsavers. The Election of the Prime Minister for the nation follows a
voting system for a party that is conducted throughout, amongst the people of the nation
(Jasiulewicz-Kaczmarek et al., 2017). The current territorial disputes of Japan with Russia, along
with China, South Korea and Taiwan over the islands and its natural resources is a matter of
concern to the present political parties in the nation. As a member of United Nations, G8 and
ASEAN, the country is trying to gain control over the present situation with the help of a
permanent membership in Security Council.
Economic factors
Growth rates in terms of economy can be portrayed in this section that can help an organization
like Specsavers to understand its present and future scopes of operating in a nation such as Japan.
This can be understood better with the help of an example such as the exchange rates, that can
have a huge impact on the export and import system. Known as the third largest nation in terms
of global economy, Japan as a country emphasizes more on the education system. Understanding
the educational needs of the students and preparing them to function in the world is the main
focus of the nation (Grublješič and Jaklič, 2015). The country also has shown considerable
improvement in its unemployment rates due to individuals sticking to their roles and
responsibilities upon being hired as an employee. This has helped the nation calculate an
accurate employment condition and speed up the development of the nation as a whole.
Social factors
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Social factors can be stated as an equally crucial section that can affect an organizational
function within a nation. Cultural aspects and population growth rate can be used as examples in
order to understand this better (Schotter et al., 2017). Career attitudes can also serve as a scale in
calculating labour cost of an organization such as Specsavers. Japan can be stated as a nation
following a patriarchal system, where the women of the country are to work until attaining an
age of 30 on an average, upon which they are expected to be married off, leaving the workplace.
The nation is open to various religions, making it a nation encouraging diversity.
Technological factors
A technological factor is another aspect of huge importance that can cause an effect on an
organizational operation within a nation. Technological advancement in a country like Japan can
help in understanding the production level of a company like Specsavers. This can also help in
calculating increase and decrease in costs involved in business (Knoke, 2018). Japan as a nation
has gained incredible hold in the field of technology, utilising the current relation of the people
with their mobile devices. Sending and receiving information anywhere and everywhere is
hardly a concern for the people of Japan. In addition, the nation has also introduced automation
systems in various fields such as organizations related to healthcare, hospitality and transport.
This has improved both the living conditions for the natives along with business prospects for the
organizations like Specsavers, trying to establish themselves within the nation.
Environmental factors
Environmental factors play a pivotal role in an organization's functioning within a nation, as this
section provides an idea about the geographical and climatic conditions of a nation. This helps in
gaining proper knowledge in the context of placement of an organization (Prasad and Warrier,
2016). As a nation comprising of islands, Japan is surrounded by water and mountains that has
impacted the lives of the natives to a great extent with the probabilities of earthquakes and
Tsunamis. This has caused its population to concentrate mostly within and around the borders of
Tokyo. This can affect the operations of an organization such as Specsavers functioning within
the nation equally.
Legal factors
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Legal factors of a country affecting business organizations can be stated as various acts and laws
like consumer law, health and safety law, etc. Product demands and operational costs of an
organization such as Specsavers largely depends on this factor. Japan is particular in this area
wherein, the employment contract flashes various points like employee law, hours of working
and laws related to minimum wage. This has to be strictly followed by organizations in order to
be able to sustain the markets of the nation.
Porter’s Five Forces
The above discussed external factors impacting the functioning of an organization can be
followed by the micro environmental factors. These factors are the internal elements that can
cause an organization to improve its operations. This can be explained better with the help of
Porter’s Five Forces. Developed by Michael Porter, this tool analysis various probabilities that
can help an organization construct a business that can sustain in the current competition (Takata,
2016). Consisting of five factors, as suggested by its name, this tool focuses beyond the normal
elements like the competitors existing in the market contributing to the strategic decision making
in context of an organizational operation.
Competitive Rivalry
This can be considered as the first and most crucial factor that can determine the strength of an
organization. The existing competition in the related industry can decide the future scope of an
organization (Vitasek, 2016). This can be understood better with the help of Specsavers as the
chosen organization in this case that can lose its strength based on the current competitors in the
field of optical retailers. In order to operate successfully within the market of Japan a thorough
study based on the same is required, where the organizations can understand its present position
and make its decisions like product cost as per the prevailing situations. The example of
Factory900, as an organization operating in the optical retail sector in Japan, can be considered
as a competitive rival of Specsavers in this case.
Supplier Power
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An organization's potential within a market can also be determined based on the suppliers
existing in the field (Barney, 2015). The number of suppliers functioning within the market
decides the strength of an organization like Specsavers that can utilize various possible options,
taking a lead in deciding its prices for the raw materials unlike an organization depending on the
mercy of limited number of suppliers taking a toll on the production cost of an organization.
Buyer Power
This can be an essential part in the process of determining the strength of the organization in
relation to the targeted market (Medcof and Lee, 2017). A large base of customers for instance
can provide an organization like Specsavers a stronger ground in the competitive market. This
will be decided based on the ability of the customers to switch from the products of an
organization to another that may lead to driving the prices down in comparison to the
competitors.
Threat of Substitutes
Any organization such as Specsavers functioning in a market is bothered throughout due to the
threat of availability of substitutes that can easily replace the products of the company (Benson,
2018). This is something that can be taken under consideration while operating within any nation
like Japan in this case. Understanding and studying the market and the possible options of
substitute can help in gaining products that can hardly be replaced by any other available
substitutes present in the market.
Threat of New Entry
This is the last and final factor in this tool that can affect the position of Specsavers as an
organization expanding its business in a nation like Japan. This section highlights the threat of
emerging business organizations entering a particular market (Burns and Dewhurst, 2016). This
can be calculated with the help of the nation’s rules and barriers in terms of establishing and
operating a business. An intact market, offering few entry routes to business organization can be
taken as a better solution as compared to a market that hardly requires an effort. This might allow
a large number of competitors to enter the market, raising the risk of sustenance for an
organization such as Specsavers.
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Analysis
Based on the detailed discussion on the various factors that can affect the operation of an
organization such as Specsavers, the macro environmental factors play a crucial character in
determining the position of the chosen organization, Specsavers in this case and its sustenance
within the market of Japan. The political stability being the first and foremost factor can have a
great influence throughout the nation, let alone an organization like Specsavers as a chosen
organization expanding its business in the business market of Japan. The probability of surviving
this factor can be increased with the help of proper understanding of the current political
conditions of the nation that can help in implementing suitable and innovative techniques to
survive the market. The economical and technological factors of the nation are also of great
importance, where the organization can get an advantage of the current technological
advancement of the nation. Considering the economical conditions of the country, Japan has
been seen as a nation holding a position within top five economies in the world.
Coming to the social factor that can be stated as an equally important element in the study above,
can be implemented by the organization in order to understand the product and price preferences
of the nation along with labor costs and availability within the nation. The environmental factor
can also help in the process of understanding the organization’s potential to survive in the
market. This can be used as an advantage in selecting proper markets of establishing the business
organization, based on the geography of the nation along with the concentration of the
population. Lastly, the legal factor impacting an organization’s probability of existence in the
market can be utilized in order to understand the expectations of the natives of Japan in context
of employment with an organization such as Specsavers.
In addition, all the five factors of Porter’s share equal potential to impact the business operations.
Starting with competitive rivals where other existing organizations can take a toll the business of
the chosen organization, to the threats of new entrants plays an equally important part in the
same. Power of buyers and suppliers along with the ever-growing threat for substitutes can also
be taken as an important element that can affect and decide the future scope of the company.
Based on the above study, the chosen organization can help smoothen its operations in Japan
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with proper calculations of the strengths and weaknesses and come up with innovative strategies
that can contribute to the development of the organization as a whole.
Conclusion and Recommendation
The present scenario that has focused upon Specsavers as the chosen organization exploring its
opportunities with Japan as the chosen country in terms of Foreign Direct Investment can be
summarized to have a positive outcome. Based on the detailed study and analysis of the various
factors discussed above, the chosen organization can be seen to have a fairly advantageous scope
in the nation. External as well as internal environmental factors can be utilized to provide a
strong base to the organization in order to operate on the grounds of Japan. In addition, the
factors seeming to oppose the growth of the organization can also be taken into consideration,
that can be summed up with innovative methods and strategies to survive and thrive in the
market.
One such strategy that can be implemented in this case can be the use of artificial intelligence in
eye-testing. This can also help in reducing the time taken in conducting and gaining results for
the same. Apart from that, the organization can also utilize the nation’s technological
advancements in introducing chatbots as digital receptionists that can enhance the operational
quality of the organization along with helping in reduction of labor costs. This can further help
the organization to reduce its production costs that can help in increased profit generation
regardless of reasonable prices that can attract a larger base of customers.
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References
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Strategy: Theory and Practice, p.283.
Benson, L., 2018. Analysis of CyberOptics Corporation.
Burns, P. and Dewhurst, J. eds., 2016. Small business and entrepreneurship. Macmillan
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Grublješič, T. and Jaklič, J., 2015. Business intelligence acceptance: The prominence of
organizational factors. Information Systems Management, 32(4), pp.299-315.
Jasiulewicz-Kaczmarek, M., Saniuk, A. and Nowicki, T., 2017. The maintenance management in
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Specsavers.co.uk. 2019. Welcome to Specsavers Opticians | Specsavers UK. [online] Available
at: https://www.specsavers.co.uk/ [Accessed 3 Apr. 2019].
Takata, H., 2016. Effects of industry forces, market orientation, and marketing capabilities on
business performance: An empirical analysis of Japanese manufacturers from 2009 to 2011.
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