Jason Badgley

Peien Liu

Nina Motamedi

Ann Pham

Agenda

• Haneda Airport and Industry Landscape

• Competitive Advantages

• Opportunities

• Recommendations

• Risks

• Retail in Japan

Japan Airport Terminal Company

Haneda: Premium Domestic and Int’l Airport

• Top 5 Best Airports in the World

• Proximity to Tokyo: 30 Mins

• Int’l Terminal built in 2010

JATCO

• Focus on Premium Retailing: leased and direct vendors

• Government Regulations: Flight Slot Restrictions

• Focus on Technology: Cyberdyne

• Developing Revenue Streams Externally: Duty Free Shop in Ginza and Wedding Venue

SWOT

STRENGTHS• High Customer satisfaction

• Strategic Partnerships: BIC Camera, Cyberdyne

• Focuses on Hospitality and High Customer Satisfaction

WEAKNESSES• Connecting flights

• Ease of connecting terminals

• Standardization of Policies

• Marketing

OPPORTUNITIES• Huge Air Travel Market, Duty Free shopping

• Weak Yen, High Tax & Relaxation of Visa Rules

• 2020: Tokyo Summer Olympics

• Increase of US/NY flights Autumn 2016

• Expansion of Haneda arrival & Departure Slots

• Strengthening Japanese Tourism

• Transfer of more airport terminals to private sector spaces

THREATS• Time slot restrictions

• Allocation of flights & Airline Feuds

• Profit loss due to capital expenditure

• Volatility of Tourism Industry

Industry Environment

Diversified, global players: Heathrow, Hong Kong Int’l, Dubai

• Global players leveraged economies of scale and scope from centralized R&D, sales and marketing, and low-cost component manufacturing and distribution facilities worldwide, to lower their manufacturing costs and improve operating margins

• Airport as a primary retail operation, drop in prices for airline operations to increase passenger numbers

Smaller regional players: Kansai, Osaka, Chubu

• Serves domestic flights only with quick turn around time for passengers

• Lower airline operation rates for airlines

Opportunities

•Internationalization

• Fluid connection between domestic and Int’l terminal

• English as a standard language at all vendors

• Expand Marketing Campaign

•Enhanced Revenue Streams

• International cargo handling operator

• Customer Loyalty Program

Opportunities Continued

• Future Business Development

• Acquiring Regional airports in Japan

• Expand retail operations to China, Bangkok, Thailand, and Myanmar

• Organizational Change and Human Resources

• Reevaluate labor force for important vs. pivotal talent

• Standardize training and leased vendors

Recommendations

Ongoing Projects & Improvements

• Cyberdyne Robotics

• Shop Expansion

• Arcade

• Salon

• Gym

• Grocery Store

• Operational Improvements

• Multi-Lingual/Visual Menus

• Standardize vendor lease policies

Proposed Projects

• Loyalty Program

• Big Data

• Frequent Shoppers

• Advertising in Airline or Travel Magazines

• Celebrity Endorsements/Movies

• Partnerships with Olympics/Sponsors

• Replication of Business Model to other Airports

Desired Outcome:

• “Omotenashi” Hospitality Principle

• Increase Customer Satisfaction

• Repeat Customers

• Operational Efficiency

• Ease of use and access

• Mega Mall – One stop shop

• Strengthen HR & Organizational Capabilities

Risks

Potential Risk Description Risk Management Plan

Changes in

economic

conditions

The weakening Yen may drive visitors to Japan, but it may discourage frequent local shoppers

from shopping.

Ensure the consumer mix is internationalized to hedge against such

risk. Also increased duty free stores can offset consumption tax

hikes as it can incentivize consumers to shop at Haneda.

Restriction of Time

slots

Changes in political parties and policies makes Haneda susceptible to huge risk on their business Maintain ongoing communication with Japanese government and

invest in lobbying measures if necessary to advocate for Haneda

Unmet target

profits

High capital expenditure and unforeseen circumstances such as lawsuits, fines and natural

disasters can deplete projected profit margins.

Have disaster recovery plan in place and extra funding in budget,

estimated by historical averages

Airline Feuds &

Strikes

As airline allocation is determined by JATCO, forces outside of Haneda’s control, they are

susceptible to backlash from disputes over pricing and preferences with Narita

Court back up airlines to have back up customers in case one airline

withdraws business.

Fluctuation in

Tourism

Tourism is a highly volatile industry and can drop rapidly due to global environments. Airlines

respond to this with leased aircrafts whereas airports have fixed operating costs

Increase airport appeal as a retail destination beyond passenger

travel. Allocate marketing dollars to aid in advertising for Japan

tourism specifically through Haneda over Narita.

Retail in Japan

Department Stores

*Complex Infrastructure*Segmentation by Brand*Food Offerings in Basement

Convenience Stores

Convenience Stores

***

Supermarkets

*Serves a larger demographic vs. US targeted towards lower income

*Large Rice Ball Selection

*Prices slightly higher than US

*Busy

*Busy

•xx*

Fast Food Chains

*Frequented during one’s daily commute or return home

*Large ready made food section

*Higher prices than US, particularly for American itemsFast Food Chains

Supermarketstion by Extinction

Termination by Integration

*Cultural Arbitrage

*Catered to local taste ie: Tuna Muffin, Tomago Burger

*Slightly lower prices than US

*McDelivery

Questions