nus lecture "japanese businesses in singapore"
TRANSCRIPT
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Japanese Businesses in Singapore
“Growing Together”
02 April 2014
Michiaki Lee
Today’s Agenda
1. Introduction
2. Japan Economy Snapshot
3. Rising Sun & “Lost Decades”
4. Japanese Businesses in Singapore
5. Current Challenges of Japanese Corporations
6. Emerging Entrepreneurial Business from Japan
7. Wrap Up - Growing Together
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1. Introduction
Introduction – Who am I ?
Korean origin
Born and educated in Japan
Worked for US and Japanese companies
Moved to Singapore in 2011
Corporate Education / Leadership Development
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Question 1
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2. Japan Economy Snapshot
Global Macro Economy
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Japan is the 3rd largest country in GDP
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Question 2
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3. Rising Sun & “Lost Decades”
Japanese Economy – Past Trend
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Xxx
Xxx
Lost Decades Bubble Rising Sun
Nikkei Stock Index (JPY)
Fact - Students’ Voice
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Most Respectable Japanese Company
N=74
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Rising Sun ~ “Bubble” Economy(Before 1990)
Fact - Students’ Voice
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Strengths of Japanese Companies
N=72
Rising Sun ~ “Bubble” Economy(Before 1990)
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Short Movie
Rising Sun ~ “Bubble” Economy(Before 1990)
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Success Factors
Growing Demands
– Population Increase / Wage Increase
People
– Highly Educated Workers / Team Work / Hard Work
– Diligence
Efficient Process
– High Security (Safest Country)
– Life-Time-Employment System
Highest Quality Products and Services
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Global Companies Leaned from Japanese Method
5S
– Sorting (Seiri)
– Setting in Order (Seiton)
– Shining (Seiso)
– Standardize (Seiketsu)
– Sustain (Shitsuke)
Kaizen
– "improvement" or "change for the best"
Rising Sun ~ “Bubble” Economy(Before 1990)
Many Countries Learned from Japan
Management Style in 1970-80’s
Japanese “Legacy” Management Style
– Life Time Employment
– Seniority
– Hard Work / Long Work
– Well Organized Structure
– Patience
– High Context Culture / Mono Culture
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Those Worked !
Japanese Economy – Past Trend
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Xxx
Xxx
Lost Decades Bubble Rising Sun
Nikkei Stock Index (JPY)
Bubble Collapse
What was Happening?
Speculative money
Real estate values were extremely over-valued
Large amount of loans
Large number of defaults
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After the “Bubble” Economy (After 1990)
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“Lost Decades”
Over Valued Assets (too much investment)
Over Capacity / Financial Deficit
Decreasing & Aging Population
Lower White-Color Productivity
Global Competition
Deflation, Minus GDP Growth,
Unemployment
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Question 3
Paradigm Change During the “Lost Decades”
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Limited Japan Domestic Market Growth
Rapidly Growing Asian Markets
New Technology
Advanced Information and Communication Technology
Globalization
Low Cost Labors Outside
China and other Emerging Countries
Customer-Centric World
Consumers are more “Savvy”
“Hard” to “Soft”
“Product” to “Services”
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Question 4
Fact - Students’ Voice
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Weaknesses of Japanese Companies
N=75
Rising Sun Again
“Abenomics” (December 2012 ~)
Quantitative Financial Easing
– Pushing up prices
Fiscal policies to stimulate demand
– investment in public works and renovation of infrastructure
Deregulations and creation of sustainable growth
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During 2013, Nikkei Stock Index
went up by 56%
Will it be Sustainable?
How Japan Should Change
To Retrieve Competitiveness…..
Focus on specific industries / functions
Deregulation (Accepting more foreign business)
More global adaptability
– Accept more foreign talents
– Language
– Diversity
Enhancing Productivity
Encourage Entrepreneurial Businesses
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Now, Many Things to be Learned from
Singapore Pracitice
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4. Japanese Businesses
in Singapore
Globalization of Japanese Companies
Overseas Revenue Share is Increasing
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Japan Bank for International Cooperation N=625
Globalization of Japanese Companies
# of Japanese Companies in Singapore
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Ministry of Economy, Trade and Industry
Strategic Focus on Singapore
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Examples of “Singapore Shift”
• Transferred metal resource trading HQ from Japan to Singapore
• Moved the headquarters of its procurement and logistics
operations from Osaka to Singapore
• Developed “SONY University” in Singapore
Variety of Industries
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Especially Consumer Goods & Services
Do you want to work for Japanese
Companies?
Why?
Why not?
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Ranka) Yes, very much 15%
b) Yes, some extent 27%
c) Neutral 44%
d) Not very much 13%
e) Not at all 1%
Percentage
Students’ Voice - Positive
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N=41
Students’ Voice - Negative
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N=40
Students’ Voice – Job Hunting Criteria
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N=66 (Multiple)
Students in Japan - Job Hunting Criteria
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DISCO (Multiple)
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5. Current Challenge of
Japanese Corporations
10 Issues of Japanese Companies in Asia
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1. Wage increase (71%)
2. Competitors’ market shares are growing (53%)
3. Skills and mindsets of employees (53%)
4. Quality of employees (47%)
5. Quality control (45%)
6. Difficulty of procurement (43%)
7. Difficulty in hiring future leaders (42%)
8. Price competition (40%)
9. Increasing material costs (40%)
10. No more room for cost cutting(40%)
JETRO Survey of Japanese-Affiliated Companies in Asia and Oceania
Attributes of Japanese Corporations
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Attributes Evaluation How to Solve?
Product Quality ◎
Innovative Ideas ○
Process Efficiency ◎
Work Attitude ◎
Costs × More Productivity
Diversity × Accept Foreign Talents
Speed & Flexibility × Stronger Leadership
International Adaptability × More Cultural Exposure
People Development is the Key
3 Challenges in Growing Asian Market
1. Large Diversity
• How to understand local market?
• How to unify in one team?
2. High-Speed Growth
• How to quickly execute ideas?
• How to catch up consumer demands quickly?
3. Ambiguous & Unpredictable World
• How to create new values?
• How to recover or learn from failures?
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How to answer all those questions?
HR Issues – Gaps and Challenges
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Attributes Japanese Co.
Customs
International
Employees
Expectation
Salary Slow Mid-Fast
Promotion Moderate Fast
Career Path Generalist Specialist
Job Scope Ambiguous More Clear
Appraisal Ambiguous More Clear
Workload High Mid-Low
Job Security High Mid-Low
Individualism Low Mid-High
How to respond to these gaps?
Best Practice 1: DAIFUKU Mechatronics
Promote locals to key
managements
Higher salary and bonus
than those of Japan HQ
Big empowerment
Freedom to try
Freedom to make decision
Direct communication
Internal promotion & education
MD as a strong supporter
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Best Practice 2: Mitsubishi Electric Asia
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Involve local GM to board meeting
as an Mgmt. Advisor
Hire and fire
Ownership – Everyone has cards
Rapid promotion – No seniority
Empowerment – Non-Japanese
make key decisions
Competitive Package
Team building – Frequent Japan Travel
To Bridge Gaps
Companies have to…
Know the different values
Think Globally & Adopt locally
Learn each other
Empower to key people
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Those are “Must” for success in Asia
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6. Emerging Entrepreneurial
Business from Japan
Emerging Japanese Businesses - Cases
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UNIQLO (Fast Retailing)
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Overview
Fashion Retailer (6.2% of Japanese Market)
Revenue USD11.4 Billion (27% outside Japan)
2,449 Outlets
Source: Website, 1USD=100JPY
UNIQLO – Success Factors
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Strong Commitment to Globalize
Rapid Decision Making / Strong Execution
Local Talent Management
Risk Taking – “Willingness to Fail” to Learn
Learn from Other Players
UNIQLO – Success Factors
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Overview
Internet Commerce Platform
“Online Shopping Mall”
Revenue USD5.2 Billion
90 Million Users
(93% of Internet Users in Japan)
41,996 Merchants
Portfolio Bank, Security Broker, Travel Agent,
Payment, Baseball Team
Source: Website, 1USD=100JPY
- Success Factors
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Technology
M&A, Diversification
Speed
Consumer Reach
Commit to Globalize (No more Japanese company)
Win + Win + Win
(Rakuten + Consumers + Merchants)
QB House
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Overview
10-minute Hair Cut
16 Million Customers
542 Outlets (79 outside of Japan)
Source: Website
QB House - Success Factors
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Low Price
Speed – Providing “Time Values” to Customers
Location - Convenience
Simple - Eliminating Processes
“Blue Ocean Strategy”
Take Away Points
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Strong Entrepreneurship
Opportunity Finding
“Willingness to Fail” to Succeed - Flexibility
Customer Centric
Clear Value Proposition
Creating Win-Win Situation
Global View
Breaking Language & Cultural Barrier
Speed
10% Idea, 90% Execution
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7. Wrap Up
Questions
Michiaki Lee 李 道明
Email:
Feel free to contact for any Japanese business related matters Feel free to connect
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