THE INTERNATIONAL JOINT SEMINAR
AND
VISIT TO FP CORPORATION
Tokyo, Japan 31 January – 4 February 2017
Indonesia and Japan
Arranged by
Sut Mutiah
120820160033
Master of Management Program Faculty of Economics and Business
University of Padjadjaran
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PESTEL ANALYSIS
A PESTEL analysis is a way to identify all the macro (external) factors that can affect business. The macro factor is consisting of Political, Economic, Social, Technological, Environmental and Legal. PESTLE's analysis of Japan is as follows:
POLITIC FACTOR
Japan as a constitutional monarchy is in the power of the elected Prime Minister and Member of Parliament. The Japanese people are the major holders of the sovereignty. Japan was the first country to introduce and implement a policy of dumping politics. The political dumping policy is the policy by which the Government determines that domestic sales are expensive than abroad. Political dumping aims to (1) dominate the world market share, (2) achieve marketing targets, and (3) spend inventories, increase market share, and increase sales and profit.
Japan also set a rule of 8% tax for every item buys in Japan. Daiso, Harajuku Street, Asakusa Temple, and many more, implement tax policy, but for any store they also have a different decision to satisfy their customer by giving free tax if the customer buying for more than 1000 Yen.
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ECONOMICAL FACTORS
The beginning of the peak of the Japanese economy expanded in the start of the cabinet PM Ikeda. PM Ikeda emphasizes tolerance and patience. However, PM Ikeda overrides the issue of the Japanese law reform. It is because at that time the applicable Japanese law is still the provisions of Japanese law according to American regulations. The main policy of PM Ikeda in the economic field is to increase people's income, reform, and the increase of domestic production. The Japanese government in its economic policy, opening up improvements in engineering, investment, and currency including international currency exchange. Japan as a group of industrialized countries and is a member of the OECD international economic body. For the early politicians, Japan's economic progress was a big boost, but the growing Japanese economy of the democratic-liberal party continued to decline. This is because the democratic-liberal parties are guided by conservative ideals that uphold the customs and habits of the ancestors. As a result of the rapidly changing economy, the culture of the rural and urban society is changing, so that the customs of the ancestors faded. Farmers and villagers moved to the city to find work and a better life than in the village. On the other hand, the socialist party has benefited greatly through the development of large numbers of corporate workers, especially in big cities.
Since the Meiji period (1868-1912), Japan began to embrace the free market economy and adopted the capitalism of British and US models. The western education system is applied in Japan, and thousands of Japanese are sent to the United States and Europe to study. More than 3,000 Europeans and Americans were brought in as faculty in Japan. At the beginning of the Meiji period, the government built railroads, highways, and initiated land tenure reforms. The government builds factories and shipyards for sale to private with low prices. Some of the companies established in the Meiji period developed into zaibatsu, and some of them are still operating today. Japan is one of the most developed industrialized countries in the world. The economic system adopted by Japan is a free market and industrial market system. The Japanese economy is supported by the good relations between Japan and other countries that ultimately assist Japan in its foreign trade.
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who visit Japan during the period of 2016 as many as 270,000. This number increased 32 percent from last year's visit.
The characteristics of the Japanese economy include the close cooperation between firms operating in refineries, supplies, distribution, and banks (this cooperation group is called keiretsu), wage negotiations between private companies and trade unions (shunto), good relations With government bureaucracy, and lifelong career guarantees (shushin koyo) for nearly a third of the city's workforce, as well as employment contracts for workers.
THE SPENDING POWER OF THE JAPANESE CONSUMER
Spending power of the Japanese consumer is high. Japanese very appreciate for high quality product that comes from many countries in their country such as from USA, China, and Taiwan. Japanese is selective person and brand person. When the author went to Japan, the author saw that Japanese people have good lifestyle. Many stores in Japan sell diverse and high quality product that comes from many countries.
SOCIAL FACTORS
Japanese employees work long hours and hectic. Education in Japan is very advanced and produces skilled and critical graduates.
TECHNOLOGICAL FACTORS
The company in Japan running their activities very well with sophisticated technology. Japan is very meticulous and mature in making decisions. Japan strongly supports the research and development of technology. Almost company in Japan makes the burden of the company is really through good planning, allocated and used appropriately, and evaluated continuously.
The technology development make Japan always update and innovate lunching their product in local and global market. It gives good impact for Japan Gross National Income.
LEGAL FACTORS
One way to supervise the quality of goods, The Japanese government imposes the rules refers to the national interest. Therefore those goods exported to Japan must follow regulation rules, among others:
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ü The Consumer Product Safety Law which regulates the procedure to import and sell consumption goods in Japan
ü Measurement Law which regulates product packaging system with label description of contents, name, and address importer
ü Quarantine Law which regulates the quarantine system of import goods
ü Law For Promotion Of Sorted And Recycling Containers And Packaging which regulates recycle packaging system
ü Industrial Standardization Law which regulates the standard system of industry product quality
All these regulations are challenges and barriers for Indonesian businessmen in particular small and medium entrepreneurs to enter the Japanese market
ENVIRONMENT FACTORS
Japanese practice healthy habit. They are very cleanly. Their healthy habit influences their decision for buying product. Japan also has a strong culture. The author saw all the road in Japan are clean. The air is fresh. Developed country (Japan) and developing country (Indonesia) have differences in many aspects. But Indonesia can learn much from Japan and adopt their practical policy to increase their capabilities of managing country. Here are the recommendations:
1. For business owner in Indonesia
§ The business owner must be concerned with the impact of their business operation. The pollution from plant, the product packaging must environmentally.
§ The business owner must have a high quality standard for their product.
§ The business owner in Indonesia could export their product to increase the revenue by entrance global market and deliver the value for more customers outside.
§ The company must build and design research and development department. 2. For Government in Indonesia
§ The local government and the government in Indonesia must be concerned with excellent service for society.
§ Safety and comfortable public transportation must be a priority to reduce the traffic jam.
§ The education quality must be increase by provide many books and journal free online. So, everybody easy to access the knowledge. The education system must be redesign.
§ The policy maker must evaluate the implementation of the policy continuously. § The policy must working/implement well.
§ The state and local budget must prioritize the social needs.
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CROSS CULTURAL ANALYSIS
Marketing Analysis
Before entrance the new market, business must analyze cross cultural customer to determine to what extent the consumers of two or more nations are similar or different.
The differences between Indonesian and Japanese Customer
One of the successful tips to penetrate the Japanese market is through the understanding of market structure, distribution system, and behavior of Japanese society. The Japanese market is one market that is difficult to penetrate by outside marketers. The Japanese have a habit of buying cheap goods for everyday purposes. While wanting to buy durable products to improve the status, they bid the selling price. The Japanese have unique characteristics. Japanese consumers are very concerned about the quality of the product including for small things, such as clothes in addition to views of models, materials, sizes, colors, ways of washing, the quality of the stitching will also be noticed. Price is the decisive factor. Japanese consumers are very concerned about fashion and always
looking for something new. About Indonesians people, there are 10 Indonesia consumer characters unique. The first character is Indonesian consumers who have a short memory. They are more focused consumers with short-term product products. They are bored and forgetful consumers. The second character is the Indonesian consumer who has no planning. The third character is Indonesian consumers who tend to group and like to gather. The fourth Characters are consumers who are not adaptive to new technologies. The fifth Characters are consumers who are interested in context but not content. The sixth character is Indonesian consumers who like overseas products. The seventh character is consumers who are increasingly concerned with religious issues. The eighth character is a consumer who likes to show off and prestige. The ninth characters are Indonesian consumers who are heavily influenced by subcultures. Indonesia consumers will increase in terms of similarities than the differences the tribe and geography. The tenth character, the Indonesian consumers who do not care about the environment.
Based on the observation, the author gives recommendation: 1. For business owner in Indonesia
§ The business owner must do research and / or study about Indonesia consumer needs and wants. Many products which sell in Indonesia are not durable compare with other countries.
§ The business owner must creative 2. For Government in Indonesia
§ Local and state government can make a program and activity to campaign local product
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Cultural Analysis
Use of gesture/gestures to give respect and compassion Ø Ojigi
One interesting topic to discuss is how to use body language to express respect. Japan and Indonesia have different ways of expressing gratitude, apology, etc. Ojigi In Japanese culture ojigi is a way of honoring by bowing, for example when giving thanks, apology, giving a diploma at graduation, etc. There are two types of ojigi: ritsurei and zarei. Ritsurei is ojigi performed while standing. When doojigi, for men usually while pressing the butt to keep the balance, while women usually put both hands in front of the body. While zarei is ojigi which is done while sitting. Based on the intensity, ojigi is divided into 3: saikeirei, keirei, eshaku. The longer and deeper the body is bent indicating the intensity of feeling to be conveyed. Saikeirei is the highest level, the body is bent about 45 degrees or more. Keirei about 30-45 degrees, while eshaku about 15-30 degrees. Saikeirei is very rarely done in everyday life because it is used when expressing a deep apology or to perform a prayer. To be warmer, ojigi done repeatedly. For example when you want to convey a deep feeling of forgiveness. As for Indonesian culture, it is not known ojigi.
Ø Handshake.
The handshake tradition is done both in Indonesia and in Japan symbolizing hospitality and warmth. But in Indonesia sometimes handshake is done by wrapping both hands. If done by two different people, there are times when their hands are not touching. The location of the hand after the handshake is done, also different. There are some people who then put a hand on the chest, there is also placed on the forehead, as the expression that it is not only outwardly, but also from the mind. Kiss hand Tradition kissing hand is commonly done as a form of respect from a child to parents, from a layman to a community / religious leader, from a disciple to his teacher. It is not clear where this tradition originated. But there are allegations derived from the influence of Arab culture. In old Europe, the tradition of kissing hands is also known, but as a man's respect for a woman of equal dignity or higher. In Roman Catholicism kissing hands is a tradition also carried out from a people to its leader (Pope, Cardinal). Japan doesn't recognize culture kiss hand. Kiss on the cheek Kissing cheeks is usually done in Indonesia when two friends or relatives meet or as an expression of a child's love for his parents and vice versa. This tradition is not found in Japan. Ø Sungkem
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COMPANY VISIT ANALYSIS
About Company
Company Name FP Corporation
Founded July 1962
Paid in Capital 13,150 million yen
Number of Employees
Employees: 807
FPCO Group Employees: 4,513 employees
Main business
- Manufacture disposable bottle and food containers which made of polystyrene and other resin compounds
- Marketing disposable bottle and food containers polystyrene and other resin compounds
- Marketing other product which related with packaging materials
FPCO Philosophy Creating superior products at competitive prices and delivering them to our clients when they needed
FPCO Group's medium-to-long term company strategy
Maximization of value of the company
Headquarter and branch office FPCO headquarter located in Fukuyama and Tokyo FPCO branch located in Osaka
Sales Office FPCO has 10 sales office where located in: 1. Sapporo
2. Sendai 3. Nagoya 4. Shizuo 5. Nigata 6. Hokuriku 7. Hiroshima 8. Shikoku, and 9. Fukuoka
Number of Shares Issued 44.284.212
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that food packaging is made of paper. But for food sellers in Indonesia has not been able to implement it. In Japan, for the matter, FP Corporation (FPCO) has been thinking about the concept of food container products (eco tray).
An environmentally friendly is a commitment of the company towards their products. The company is 54 years old which was established on July 24, 1962. In manufacturing, operations management is very important. Operations management emphasizes on the quality of the desired product in order to meet customer needs. FPCO transforms inputs into outputs by recycling process. Inputs used by its processes using garbage (used bottle and used tray) as materials, besides energy, information, management, technology, and labor. Used trays and transparent containers produced by FP Corporation are collected at 8,400 locations, such as supermarkets. FPCO converting waste materials such used bottle and used tray into the eco tray.
FPCO implements a supply chain management (SCM) system to its core business that connects development, capabilities, purchasing power, production capacity, warehousing, power distribution, recycling, and information networks. The strength of technology, discipline, and commitment make FPCO maintain the existence and the company long life.
Concerned for the environment makes FPCO recycles garbage since September 1990. FPCO designed and recycled styrofoam container waste by involving consumers, supermarkets and distributors to collaborate and work together. Recycling methods involves many parties, such as consumers, supermarkets, and packaging distributors. It’s helpful to governments to push the cost of transporting government waste trucks.
Each party independently and committed collect and give garbage for FPCO officer. After the garbage is obtained, FPCO officers will sort the styrofoam garbage based on the color: white, transparent, and patterned. The recycling process will be carried out by color to become a styrofoam sheet. Furthermore, officers coat the styrofoam sheet with a plastic film made of polystyrene into a food container.
FPCO is not only concerned about the environment by doing the waste cycle, but also against the disability. As of March 2014 FPCO employs 372 disabilities or about 16% of the total employee to sort recycling waste and construct transparent containers. It proves that the disabilities can be productive and work well in accordance with FPCO directives and desires. FP Corporation provides employment opportunities for disabled individuals.
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container and packaging 3R-reuses, reduce, recycle in April 2007, and Gold Prize at Eco Mark Awards 2010 on waste recycling method conducted by FPCO in February 2011.
Because of the easy to recycle, environmental benefits of Styrofoam food tray are consisting of: 1. Tray use negligible amounts of petroleum as a raw material (helping to conserve resources) 2. Tray account for a tiny percentage of garbage
3. Trays contain no CFCs
4. Trays can be recycled using very little energy
Eco tray is their valuable products that ready to deliver to the consumer. Food containers (eco tray) provide low-profile support that helps supermarkets, convenience stores and other retailers to offer safe, secure food to consumers. The quality standards are maintained too. Every FPCO food container has the FPCO Mark stamped on the back. This mark guarantees peace of mind of users of FPCO containers which have food, vital for sustaining health, inside.
Swink et all state that Operations managers must look beyond the “four walls” of the firm and take an integrated supply chain perspective of operations. Capacity and process activity must be designed well to manage operation.
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Last month of fiscal yearMarch 2012
March 2013
March 2014
March 2015
March 2016
March 2017 (forecast)
Net sales (Millions of yen) 155,681 158,192 161,121 164,918 170,292 176,000
Product sales 113,090 115,085 118,406 122,237 126,289 131,000
Merchandise sales 42,591 43,106 42,714 42,681 44,003 45,000
FPCO implement inventory management very well:
1. The company eliminates the risk of delayed the goods / materials needed by the company. Therefore, the company has made hauling schedule for getting bottled and food tray waste from customer, supermarkets and others.
2. The company eliminates the risk of waste materials by selecting the good bottle and food tray waste from the bad ones.
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materials in a clean and ready to use. The fifth order is the rinsing and drying machine. The machine will rinse the raw material and then dry it. After the raw material is drained, raw materials are destroyed again to be the smallest part. Raw material that becomes small and dry is called dry chips. The sixth sequence is a freezer and a dry chip converter into a pellet, Pellet is the product of the machine used to produce an eco tray.
The purpose of planning a good layout / layout: • Maximize the utilization of plant equipment • Minimize labor requirements
• Ensuring the flow of materials and products smoothly • Minimize barriers to health
• Minimize the effort of carrying materials
• Shorten the processing time of the production process FPCO in deciding the layout strategy seems to have noticed;
• Maximum utilization strategy of the room or place, machinery and equipment, and workers. • Knowledge and Development of information flow, raw materials, and sources of labor. • Flexibility of machinery and equipment
4. Company Achieve optimal machine usage. The machines used by the company are machines maintained / cared for with adequate maintenance costs. The machine used is a sophisticated machine and optimally utilized, there is no machine idle. Machine is a tool that helps the company to maximize and effective in providing services to subscribers with the best, by giving guarantee availability of finished goods. The company has a high commitment to retain customers and meet customer needs.
The optimal use of machinery by the Company is capable of delivering adequate production output. All tools are well utilized and no one is unemployed. Optimal use of the machine can also increase sales results because the machine works very well in processing customer demand.
Organizational Culture “Kaizen”
Japanese society has a strong character, good management of all things not only done in the company, but also in the household. Japan is excellent in its management character who has the philosophy of "cost-savings and" hi-quality. Kaizen Culture in Japan is very ingrained. Kaizen can be interpreted as a continuous improvement. This improvement is not only in the business environment and government but also in Society.
The core of Kaizen is the realization that management must maximize the company value by manufacturing and deliver a superior product if the company wants to exist, earn the profit, and grow. The purpose of Kaizen is for accomplishing quality, processes, systems, procedures, equipment costs, and scheduling to fulfill customer satisfaction. In applying the value, FPCO applies the method:
1. changing the way to empower employees to be more productive, more efficient and safe 2. Repair the equipment
3. Improve the procedure
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The key success of Japan Kaizen -> every employee of all levels must improve their skills and develop their talents continuously, which can improve job satisfaction.
One of the most important and controversial Kaizen philosophies is that the process of improvement is cultivated primarily in order to efficiencies and economies. Kaizen focuses on the elimination of improvident, unnecessary processes, and prevent fails by design the quality of results from the beginning of the process. The application of the principles of simplification of work in process improvement is an illustration of the application of Kaizen philosophy. Application of the principles of simplification of work in process improvement is a description of the application of Kaizen philosophy (Hardjosoedarmo:2004)
There are four steps in the simplification principle, which the sequence needs to be followed: Ø Step One: Remove all unnecessary steps which not giving value added
Ø Step Two: Conduct an analysis, combining, consolidating and implementing the steps of the process into the outcome
Ø Step Three: Changing the processes to rearrange the sequence. Ø Step Four: Add resources or make the replacement step in the process. Based on the observation, the author gives recommendation:
1. For business owner in Indonesia
§ The business owner in Indonesia must have a good skill and knowledge of managing operation. Without skill and knowledge about managing operation, it’s difficult to achieve efficiency and effectiveness. The business owner must push the cost production with many ways besides by retire their employee.
§ The perspective of local focus must be changed as global focus. § The business owner in Indonesia can implement Kaizen continuously 2. For government in Indonesia
§ The local and state government must evaluate their expense in their operating activities.
§ The local and state government must design waste management and build some incineration plant
§ The local and state government must design operational facilities layout § The local and state government must implement Kaizen continuously
References:
http://www.japan-guide.com/e/e2206.html
https://www.gov.mb.ca/agriculture/market-prices-and-statistics/trade-statistics/pubs/japan_consumer_report_en.pdf
https://www.yudairawan.com/analisa-pestle/
http://atlas.media.mit.edu/en/profile/country/jpn/
http://www.kansaigaidai.ac.jp/asp/pdf/current_students/01_student_handbook/Drug_Laws_In_Japan.pdf
https://en.wikipedia.org/wiki/Economy_of_Japan#Law_and_government
