Political factors that might affect Goodman Fielder in entering Japanese market include government regulations and policies. Goodman fielder should ensure that they understand all rules and regulations put in place by the Japanese government regarding businesses (Stern 59). For instance, Japanese government has set various policies to safeguard their domestic production and these may adversely affect Goodman fielder’s venture into the market.
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There are tariff rate quotas which restrict foreign trade in a huge way. For example, they set volume limits for foreign companies willing to export goods such as wheat flour to Japan. This may affect Goodman Fielder because they may be forced to pay high rates for large volumes (OECD 35). The company may be unable to meet customer demands due to this tariff rate quota as it may be expensive to export huge volumes to Japan within a given period.
The Japanese government creates international trade barriers by allowing state enterprises to import huge volumes without being subjected to those rates. This gives them an advantage over other players in the market hence making foreign trade difficult. For instance, the MAFF which is a food department in Japan has rights to import wheat hence making it hard for foreign players to venture into the market. This creates an unfair competition where some players in the market enjoy special rates hence putting down their operational costs. For instance, Goodman Fielder may find it difficult to realize their set margin profits. This is because they may be forced to adjust their prices to unexpected levels in order to sell in the competitive Japanese market.
The government has also given special rights to the agriculture and livestock industry corporation to import dairy products. This department poses great threats to Goodman fielder’s venture into the market because they import dairy products and set market prices (Ashkenazi and Jacob 76). Therefore, it is difficult for Goodman Fielder to market its dairy products in Japan with volume limits and unfair competition from government trading enterprises.
There are border policies set by the Japanese government to protect their processing industries hence hindering foreign companies from venturing into the market. For example, Goodman Fielder may be forced to pay high tariffs to export dairy and wheat products to japan. In fact, these policies have made imports to Japan very expensive hence favoring domestic production. In addition, Japanese government imports dairy and wheat products from various states hence making it hard for other companies to venture into their market (Mulgan 64).
Goodman fielder should consider various social factors such as lactose intolerance among people of Japan. Since Japan did not rely on milk in its historical past, many people among its population may be allergic to lactose in dairy products. This means that the target market would lack enough potential to benefit the company. However, there have been changes in eating habits among the population in Japan. Due to westernization, people in Japan eat more of western breakfast and lunch as opposed to their traditional diets. This means that there is an increase in consumption of milk, bread and meat.
These changes increased demand for breads and dairy products. In fact, these changes have created opportunities for companies such as the Goodman Fielder (OECD 35). In order to cater for the rising demand for bread and dairy products, Goodman fielder may consider venturing into the Japanese market to sell their products. Despite barriers on venturing into Japanese market, the population is large hence creating high demand for diary and wheat products. The company should consider all these aspects before making the final decision to venture into the Japanese market.
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Ashkenazi, Michael and Jacob Jeanne. Food Culture in Japan, New Zealand: Greenwood Publishing Group, 2003. Print.
Mulgan, Aurelia. The Politics of Agriculture in Japan, New York: Routledge, 2000. Print.
OECD. Evaluation of Agricultural Policy Reforms in Japan, London: OECD Publishing, 2009. Print.
Stern, Robert M. Issues and Options for U.S.-Japan Trade Policies, Michigan: University of Michigan Press, 2002. Print.