Globetrotter Seminar #2 Japan

2/12/2008

日本

Promotion VideoPromotion Video

Topics• Economics• Japanese Language & Culture• Organizational Behavior• Sustainable Enterprise• Marketing• Travel & Food

EconomicsOverview of Japan, Including History,

Business, Politics

Geography

Sapporo - Boston

●Korea

Okinawa - Miami

●

China

Tokyo - Chapel HillOsaka 　

●

●

From CH, NC - 14 hours by airTime Zone - 14 hours ahead

PacificOcean

Climate

Northern

Middle

Southern

Demographics• Population - 128 million (ranked No. 10)• Race / Ethnicity - Japanese 98%• Life expectancy - Male 79 yrs, Female 86 yrs (Ranked No.1)• Declining birth rate - Aging society : 20% of people are 65 yrs old or more - Population growth : Negative• Big cities - Tokyo area: 32 million,　　　　　 - Osaka area: 12 million,

PoliticsPrime Minister

The 13th minister in 20 yrs

Problems… - Budget deficit (worst in developed countries) - Reform of government pension Plan etc.

Few regulations for imports, exports and capital transfer

Economy

Japan

USA

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%100%

1.2%

1.2%

22.7%

17.4%

6.5%

4.9%

18.8%

19.6%

27.7%

32.0%

23.0%

24.9%

GDP composition

Agriculture Manufacturing Construction Wholesale, retailFinance, real estate Other service

- Low growth rate - Extremely low interest rate

GDP

$ 13,202 bil. ($44K per capita)

$ 4,366 bil.($35K per capita)

5,000

10,000

15,000

20,000

25,000Nikkei 225

S&P500

2000 2004 2008

2500

2000

1500

1000

500

NIKKEI225 vs. S&P500

SUMMARY OUTPUTRegression Statistics

Multiple R 0.595R Square 0.353Adjusted R Square 0.347Standard Error 2630.313Observations 98

t-stats =72.24P-value =0.0000

Stock Market

Leading CompaniesCompany Industry Profit Market Cap.

Toyota Motor Co. Automobile $ 16.1 bil. $ 208 bil.

Mitsubishi UFJ Financial Co. Bank $ 8.9 bil. $ 107 bil.

Nippon Telegraph and Telecom Co. Telecom $ 4.6 bil. $79 bil.

NTT DoCoMo Inc. Telecom $ 4.8 bil. $76bil.

Nintendo Co., Ltd. Electronics $1.7 bil. $75bil.

Sumitomo Mitsui Financial Group Bank $ 4.4 bil. $63bil.

Canon Inc. Electronics $ 4.6 bil. $61 bil.

Honda Motor Co., Ltd. Automobile $ 5.9 bil. $61 bil.

Matsushita Electric Industrial Co. Electronics $ 2.2 bil. $58 bil.

Takeda Pharmaceutical Company, Ltd.

Pharma $ 3.4 bil. $57 bil.

Long-term Relationship•Between Company and Employee

- Lifetime employment

•Between Companies (Keiretsu)

Mitsubishi UFJ Bank Mitsubi

shi Estate

Mitsubishi

Electronics

Mitsubishi Co.(Tradin

g)

Mitsubishi

Heavy Industr

y

Mitsubishi

Chemical

Toyota Motor Co.Aisin seiki Co. Transmission

Denso Co.Electrical Components

Toyota Industry Co.Forklift truck

Toyota Tsusho Co.Trading

Zaibatsu-oriented(Mitsubishi group)

Large manufacturer (Toyota Group)

Japanese Language and Culture

What is behind the Japanese people?

Strange People?Why Japanese people are…• Shy?• Hard working/dedicated?

Why Japanese people do NOT…

• Think out of the box?• Speak out in meetings?

Small and Closed Community• Island surrounded by seas• SAKOKU ( 鎖国 )

– disconnected from overseas (1633-1853)• SHIMAGUNI-KONJO

( 島国根性 )– Not much experience

under diverse environments historically and geographically

Small and Closed Community• HONNE-TATEMAE ( 本音 - 建前 )

– Honest feelings and official position• WA ( 和 )

– sense of harmony and togetherness• NEMAWASHI ( 根回し )

– Technique to reconcile interests while maintaining WA

Hierarchical Society• Feudal society (till 19th century)

– Samurai– Vertical Society– Strict orders and strong relationships

• ON( 恩 ) / GIRI( 義理 )– Seniors care for Juniors– Juniors respect Seniors

• KENSON ( 謙遜 ) – WA and social hierarchy

• Ethics– Small and vertical society

Internationalization• Importing Western Cultures• Exporting Japanese Cultures• Constantly changing

Organizational BehaviorA day in the Life of a Salaryman

Business Etiquette

8:00AM Commuting Rush Rate of congestion--- Unknown, but very high!

http://jp.youtube.com/watch?v=a6rYUvSFWro

9:00AM: Morning Meeting• Start with morning meeting• Contents: Boss’ speech, short exercise,

and confirmation of the day’s goals

• Three different angles of bowing used Normal For Customers Apology

Angles of Greeting

• Exchange business cards at start of meeting• Pass first to the higher-ranked person • Treat business cards carefully (display on

table) until leaving

Business Card Exchange

• Visitors sit further away from door• Most senior member sits furthest from door• Boss sits in the middle

Meeting Room Cafe

Entrance

　　　 Seating Position

8:30PM: After Work• Usually, Japanese can’t leave office on time• Often, boss asks subordinates for a drink (at

Japanese pub)• Most of topics are business• Only the last train can stop this drinking party

0:45AM(Next day):

Capsule Inns• Cheap alternative to taking a taxi • 4000 Yen (~$37) includes “room,”

common bath, bathroom, locker• Clothes and toiletries sold

• Very important opportunity to find sweetheart(s) for Japanese workers

• Men and women sit alternately

After work 1: 　　　　　　　　

　 Goukon (Matchmaking Party)

• Eat and drink under trees• Company as community• New hires save spots all day

After work 2:

Cherry Blossoms Viewing

Sustainable Enterprise

Environmentally FriendlyPractices in Japan

Mottainai ( 勿体ない）

• Unique concept, no direct translation• Respect for nature and man-made objects • Concepts of 3R (Reduce, Reuse, Recycle)

and Repair • Concept practiced since ancient times• Part of everyday life• Spread by Wangari Maathai

(Nobel Peace Prize Winner, 2004)

Reducing Waste in Daily Life

• Handkerchiefs– Used to wipe hands, sweat, as accessory

• Energy efficient hand dryers– Dries hands quickly

Reuse and Reduce: Refillable Shampoo

• 80% of families purchase shampoo refills• Body wash, hand soap, softener, detergent,

bleach are also refillable

1990 2000 20050%

100%

0.4%

% of shampoo buying families

50.2%

79.3%

Percent of families buying refillable shampoo

Reducing Energy Usage• Cool biz: office AC set at 82.4F

– Uchiwa, Sensu (hand-held fan)• Warm biz: office heater set at 68F• Kotatsu (electronic heater)

Composting Trash• 40 pounds of food waste produced every year

by average Japanese household (vs.195 pounds in the US)

• Subsidy given by cities for families to purchase composting machine

After 24 hrsMicrobes change garbage into compost

http://www.alighterfootprintfilm.com/statistics.html

Disposal of Cooking Oil• Products available to solidify used oil• Some recycle it as bio-fuel• If directly dumped in sink:

Extreme increase of BOD(Biochemical Oxygen Demand)

Kill fishes in rivers, oceans

Sorting Trash in Typical CityApartment:• Sort out trash in up to 18 different bins• Throw out any day of the week• Pay community fee for trash pick upHomes:• Around 4 separate pick ups• Purchase trash bags specified by district• Place in specified area before 8AM• Community duty and peer pressure

How would you throw this out?

1. Water bottle

Answer: Separate into 3 groups

1) Caps-recycle with plastic

2) Label-recycle with plastic

3) Bottle- flatten and recycle

Typical Trash CollectionPlastic: bags, cups, trays. Once per week

“Rinse the bottles and be creative in reducing the size of containers.”

Cans, glass, plastic bottles. Once per week

“Flatten out the bottles. Remove the labels and caps from bottles and recycle.”

Newspaper, magazines, milk cartons. Twice per month

“Tie the paper according to type and place in transparent trash bag.”

Food waste, battery, broken glass. Twice per week

“Label the contents of bag”

How would you throw this out?2. Half-full coffee in paper cup, in café

Answer:1) Throw out the remaining liquid in container2) Place paper cup in bin for paper recyclables

Quiz : Which improves gas mileage most?

A. Stop idling (10 min/month)

D. Remove unnecessary stuffs (30 kg)

C. Proper tire pressure

B. Stop aggressive acceleration/deceleration (10 times/day > 0 times/day)

Research at Toyota: Eco-driving

Eco-driving35 mpg

30 mpg(Baseline)

Mileage

Remove 30kg

30.08

Tire Pressure

30.38

Mild driving

31.20

Idling stop

32.33

All

34.31

Marketing

Product: • Japanese product

• Integration of new functions• High quality• Excellent services

Product example: Super Toilet

• Adoption rate: 60% of Japanese household• Features

– Automatic open/flush/close– Heated seat– Shower & dryer (no paper)– Sound– Deodorization

• Testimony

Product example2: Services• Respect customers• Customers have been king for a long time• You can “really” expect for 0 Yen at McDonald• Side Effect: demanding customers

Promotion:• Comparative Advertising

Historically, not accepted and hated

But

• Free ad pocket tissues– Personal loan company– Dating site– Contact lenses– Cell phone– ...and more

Promotion:

Place: Convenience Store• Everywhere in cities• Sell many kinds of goods/services

– Cooked food, Magazines, Beer, etc.– 2500 SKU in 110 ㎡ (1200 sft)– 70% of products replaced/year– Parcel delivery, entertainment ticket– Tax, gas, electricity payment, ATM

• Super efficient inventory control– State-of-the-art inventory management– Frequent delivery: 2-3 times a day

It’s not just 24 hours operation

Travel & Food

Travel

Tokyo• Business and political center of Japan

Many companies’ headquarters• One of the biggest cities in the world

12M population in city of Tokyo, 32M in metropolitan area• Something for everyone

Shopping, dining, sports, entertainment….• Extensive public transportation

Tokyo: Railway Network

Tokyo: example

Nighttown

Business district

Fashion center

CybertownOld town

Shinkansen (“Bullet train”)• The world’s first bullet train

(since 1964)

• Extremely reliable– Speed: 170 mile/hour (max)– Frequency: 13 train/hour (peak)– Fatal accident: never– Average delay: 6 seconds!!

Kyoto• In west part of Japan• Historic city (former capital for 1200 years)• Listed as World Heritage Site• One of the most popular travel destinations

Kyoto: example

“Onsen”: Hot Spring• Onsen is

– Japanese favorite resort– scattered around countryside thanks to volcanoes– located indoor and outdoor– believed to be healthy

• Experience Onsen– Exercise (optional)– Bathe in Onsen until you feel bored– Enjoy Beer/Food– Sleep in traditional lodge

Food

Japanese Food• Essence

– Quality of ingredient• Value true taste of ingredient

– Very little spices used• Offer raw ingredient

– Seasonality of food• most available = best in quality e.g. crab in winter, salmon in fall

– Presentation

Japanese food: Example

End

Other

What we missed today• Sports• Language• Technology