Opening A Chick-Fil-A Restaurant In Japan?
Government Regulations on Businesses
According to the CIA World Facts, Japan has the third largest economy in the world. However, it is ranked 114th place for convenience of opening up a sustaining a business in Japan, due to several aspects, some important ones are government regulations such as licensing, contracts law, business taxes, registration, trade finance, environmental policies, which all lawfully limit what the business can do.
For Chick-Fil A to be able to open up a new restaurant in Tokyo, there are several lengthy procedures to obtain a business permits, register the property if purchased or constructed by Chick-Fil A. In order to register the property, a certificate of the seller’s seal impression is required, an application at the Legal Affairs Bureau and payment of real property acquisitions tax, and payment of stamp duty at a post office (TMF Group). Before the business can start, the company is required to communicate with the Ward office, the Legal Affairs Bureau of the Ministry of Justice, the District Tax Office, the local tax office, the Labor Standards Inspection Office, the Japan Pension Service and the Public Employment Security Office before other procedures can be considered, having to go through all these layers of governmental offices can be a lengthy and costly process, taking a toll on the available budget and delaying revenues (TMF Group).
According to the World Bank and International Finance Corporation, it takes up to 193 days to obtain construction permits, and the process consist of 14 procedures that must be followed, involving several governmental departments and local authorities. Getting utilities such as electricity also has a special process, in which having to arrange installation appointment and submitting an application to the Tokyo Electric Power Company, and the process can take about 105 days (TMF Group).
Government regulations on investment and financing, makes it harder for the business to get investors to invest in, because the laws in favor of the investor, making sure the investor is secured by conducting several intensive analysis of the business financial state and trends in the long term, which for a starter business that has a low budget and recognition can be preventing the investors from investing in (Investopedia).
According to the World Bank and IFC rank Japan 123rd in the world for their corporate tax system that requires the business up 330 hours a year in management time, with 14 payments required every year. Corporate tax rates are up to 30%, with other local and environmental taxes(World Fact Book).
Contracting other service companies can also be a lengthy and costly process, in which it takes 360 days and costs 32.2% of the claim. The business has to go through 30, dealing with court proceedings (TMF Group).
Environmental policies are also limiting factors to the business. According to a 2010 report, the OECD Noted that Japan has created a series of aggressive policies (Smith). The OECD said particular progress was made with respect to air emissions, water usage and municipal waste generation (OECD).
Climate Changes
Potential disasters such as Earthquakes, high temperatures, rapid decrease in temperatures, heavy rain, and Tsunamis can create a serious threat to the business. Depending on the geographic location, we can determine what the probabilities of those potential disasters are and how we can cope with it, having the resources at hand. These disasters are not only a threat to the restaurant building, but it can be a threat to the sources of supplies such as the food, water, electricity, etc. Japan is mostly dependent on imports when it comes to food supplies, producing below 40% domestically (Our World). The climate effects play a role in limiting the country’s agricultural ability, which increases the cost of the food imported. Chick-Fil A is specialized in the food industry and its profit margin depends on the difference between the cost of purchasing the food supply and selling the final product. High cost of inventory can drive profits down, making it difficult to offer good quality at reasonable prices.
Crimes
Even though crimes are rare in Japan, but the rate is rising according to ABC News sources. With the level of technology and advancement that Japan has reached, criminals have also become more advanced and effective, such as the creation of the criminal organization or gang, syndicate, or mob. We need to identify the types of crimes occur on daily bases, and find out what protection does the government gives us, what insurances should we have, and how can we protect the business from criminal attack and hackers.
Competition
There are a lot of food businesses in Tokyo, so it won’t be easy to survive for very long without being recognized as part of the competition. Food service restaurants are around the city, offering all kinds of foods from international to local. According BBC News sources, there are about 160,000 restaurants (BBC News). This can create a serious threat to our process of attracting customers to buy and investors to invest in the business. So, we need to use short-term strategies to gain popularity as soon as possible, adjusting price and quality to the needs of the customers and build relationships to keep create loyal buyers. Some of the most popular and competitive restaurants in Tokyo are Mos Burger, Matsuya, Yoshioya, Nakau, and Sukiya, specializing in fast food services (Exploring Tokyo).
According to the SWOT analysis, we have more strengths than weaknesses, which is good news, but however, we need to balance our focus on both strengths and weaknesses in order to achieve success in the business. In order to balance our focus, we have utilize our human capital and today’s technology. Since one of our major weaknesses is popularity in Tokyo, Japan, it will affect our rate of sales directly, which is also the source of profit that we will use to run the business. There are several strategies to cope with such a problem, such as sampling, in which we can utilize our human capital to go around the city and give out samples of our menu, it will be an expensive process, but it’s an investment that help us collect potential buyers and create controversy that will attract attention from others. Today’s technology allows us to advertise with a snap of a finger, whether through internets services, cell phone applications, digital screens outside buildings, or even the traditional poster signs on the side of the streets of Tokyo. The goal that we would like Chick-fil-A to achieve in two years is being recognized and known by at least half of the city of Tokyo. The advantage of being recognized and known among the people, is that it will increase the rate at which the business is growing, which in terms our sales and profit.
References
"World Fact Book: Japan." Central Intelligence Agency. Ed. Staff. United States, n.d. Web. 2015.
"Japan." TMF Group. Ed. Staff. N.p., n.d. Web. 1 Dec. 2015.
"What Are Key Government Regulations That Affect Investing in the Banking Sector?" Investopedia.
Ed. Staff. Investopedia, LLC, n.d. Web. 3 Dec. 2015.
"Japan." World Bank. Ed. Staff. The World Bank Group, 2014. Web. 2 Dec. 2015.
Hibiki, Akira, and Toshi Arimura. "ENVIRONMENTAL POLICIES AND FIRM-LEVEL
MANAGEMENT PRACTICES IN JAPAN."ENVIRONMENTAL POLICIES AND FIRM-LEVEL MANAGEMENT PRACTICES IN JAPAN (2011): 1-56. OECD. Organisation for Economic Co-operation and Development. Web. 2 Dec. 2015. .
Smith, Brett. "Japan: Environmental Issues, Policies and Clean Technology." AZO Cleantech.
AZoNetwork, n.d. Web. 1 Dec. 2015.
Barrett, Brenden. "Japan to Suffer Huge Climate Costs." Our World. United Nations University, 30
June 2009. Web. 2 Dec. 2015.
Charlton, Jan. "Japanese Crime Rate Rising." ABC News. N.p., 8 June 2015. Web. 2 Dec. 2015.
"Tokyo 'world's Best Place to Eat'" BBC News. Ed. Staff. N.p., 17 Nov. 2009. Web. 2 Dec. 2015.
"Fast Food in Tokyo." Exploring Tokyo. Ed. Staff. Exploring Tokyo, n.d. Web.
References
"World Fact Book: Japan." Central Intelligence Agency. Ed. Staff. United States, n.d. Web. 2015.
"Japan." TMF Group. Ed. Staff. N.p., n.d. Web. 1 Dec. 2015.
"What Are Key Government Regulations That Affect Investing in the Banking Sector?" Investopedia.
Ed. Staff. Investopedia, LLC, n.d. Web. 3 Dec. 2015.
"Japan." World Bank. Ed. Staff. The World Bank Group, 2014. Web. 2 Dec. 2015.
Hibiki, Akira, and Toshi Arimura. "ENVIRONMENTAL POLICIES AND FIRM-LEVEL
MANAGEMENT PRACTICES IN JAPAN."ENVIRONMENTAL POLICIES AND FIRM-LEVEL MANAGEMENT PRACTICES IN JAPAN (2011): 1-56. OECD. Organisation for Economic Co-operation and Development. Web. 2 Dec. 2015. .
Smith, Brett. "Japan: Environmental Issues, Policies and Clean Technology." AZO Cleantech.
AZoNetwork, n.d. Web. 1 Dec. 2015.
Barrett, Brenden. "Japan to Suffer Huge Climate Costs." Our World. United Nations University, 30
June 2009. Web. 2 Dec. 2015.
Charlton, Jan. "Japanese Crime Rate Rising." ABC News. N.p., 8 June 2015. Web. 2 Dec. 2015.
"Tokyo 'world's Best Place to Eat'" BBC News. Ed. Staff. N.p., 17 Nov. 2009. Web. 2 Dec. 2015.
"Fast Food in Tokyo." Exploring Tokyo. Ed. Staff. Exploring Tokyo, n.d. Web. 3 Dec. 2015.
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