REPORT

INTRODUCTION

Liz Earle is a skincare company located in the South West of England selling

products with carefully selected natural ingredients. We provide a business

plan with the objective to enter the Japanese market and sell Liz Earle’s

skincare company’s products there, concentrating on establishing local

relationships and networks in order to gain enough knowledge and experience

to ultimately create a joint venture in Japan.

WHY JAPAN?

Strong economy: Being the third largest economy in the world with high

GDP per capita represents a market with high disposable income to

spend on luxury goods such as skincare products. (Globaledge 2011)

International relations: Being a member of the ASEAN Plus Three gives

Japan the opportunity to have close trade connections to ASEAN

members which have a combined

population of 601 million.

Lucrative skincare market: The cosmetics

market in Japan is the second largest in the

world. Of the cosmetics market, the largest

part (roughly 43%) is dedicated to skincare

because in Japan the quality of skin is highly

valued. (Euromonitor International 2011)

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The anti aging market is an especially thriving market. Japan’s aging

population is forecasted to grow in years to

come.

The natural cosmetics market is also

becoming increasingly popular in Japan, and

Liz Earle, being a botanic-based beauty

company, definitely has the potential of

flourishing in the Japanese market.

CULTURAL ANALYSIS

As Japanese behaviour and culture is distinctly different to that of the English,

and in order for Liz Earle to be successful abroad, Japanese culture must be

thoroughly understood.

According to Hofstede’s (Luthans and Doh, 2012: p. 116-117) cultural

dimensions, Japan scores very high in:

Uncertainty Avoidance - Japanese people don’t like taking risk and as a

consequence, prefer to build a long-term relationship before doing

business.

Power Distance - Hierarchy is very important. Therefore it is

fundamental to address people with proper titles in order to establish

their social or organisational position.

Masculinity- The role of men and women are very traditional and

conservative.

Collectivism - Organisation’s needs come before individual needs and

loyalty to the company is highly valued.

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Hall’s theory in reference to communication and verbal style, describes Japan

as a high context culture, which is completely opposite to that of the UK.

(Luthans and Doh, 2012:1 p. 195-199) In doing business with the Japanese you

must be able to read between the lines and understand the subtlety of the

situation.

Japan’s verbal style is:

Indirect - Messages are delivered in an implicit manner. Therefore

arriving late is one of the rudest behaviours you can show in a business

situation. Hiring an interpreter is viewed as a sign of genuine interest in

the transaction.

Succinct - Silence is considered a virtue; so there is no need to panic if

things are quiet during a business meeting as this demonstrates a

reflection taking place.

Affective - The Japanese are focused on the process instead of the goal

and have a very receiver focused language. It’s the receiver’s job to

decode what the speaker has said and to interpret what the message

means from the context, paying attention to the way in which the

information is presented, and to what is left out or not said.

Contextual – There is a strong focus on the role relationships of parties.

Specific words are used to indicate role and hierarchical position in a

conversation.

CRITICAL CONSIDERATIONS

Although cultural theory and its application to Japanese business has been

established, it is important to recognize that all the cultural notions we obtain

from Hofstede and Hall’s studies are just starting points for the company to

begin to understand different customs.

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Managing and building a business in a different country is without doubt more

complex and following and applying these general theories is at times not a

true reflection of the cultural situation. Great effort will be required from the

company in order to deeply and clearly understand the new culture and this

process can only be completed through a concrete business experience in that

particular country. We must consider as well, that the cultural studies of Hall

and Hofstede are not very up-to-date and that cultural values are changing

over time due to globalisation. (Luthans and Doh, 2012: p. 125)

RECCOMMENDATIONS

In the short term, we advise to export skincare products through local Japanese

distributors. During this time, relationships with suppliers, manufacturers,

distributors as well as customers will be established, to ensure a successful

joint venture in the long term. The first year can be thought as an almost trial

run, to identify opportunities and risks to ensure that when the joint venture is

finally set up, Liz Earle is very experienced and knowledgeable in Japan’s

skincare industry.

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References:

Industry overview. 2011.Beauty and personal Care in Japan. Euromonitor International [online].[Accessed on 25 October 2011]. Available from: www.portal.euromonitor.com/Portal/Pages/Analysis/AnalysisPage.aspx

Category Briefing. 2011. Skin Care in Japan. Euromonitor International [online]. [Accessed on 25 October 2011]. Available from: www.portal.euromonitor.com/Portal/Pages/Analysis/AnalysisPage.aspx

Lloyd, T. 2004. Blueprint for a cosmetics empire. [online]. [Accessed on 27 October 2011]. Available from: http://www.japaninc.com/article.php?articleID=1390

G&S International Japan. Cosmetics: Japan market report. [online]. [Accessed on 1 November 2011]. Available from: http://www.slideshare.net/JapanRetailNews/cosmetics-market-japan-2008

Luthans, F. and J.P. Doh. 2012. Interational Management culture, strategy and behavior. New York : McGraw-Hill

Earle, L. [Accessed on29 October 2011]. Available from: http://uk.lizearle.com/skincareJapan: Economy [online]. [Accessed on 1 November 2011]. Available from: http://globaledge.msu.edu/Countries/Japan/economy

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