07.04.2020 in Environment

Business Environmental Factors in Japan

Expanding operations into a new country is a risky engagement since it entails a company breaking out of the norm and into an environment that is full of new factors that are out of control for the business. Therefore, before taking any action into a new competitive market, a thorough market analysis is crucial in shedding light on the needed realignments. It is through the market analysis that a company can identify the strengths and weaknesses of a market thus coming up with the needed adjustments that will empower its operations. A market analysis helps to conduct a feasibility test of the market in the line of evaluating the profitability of engaging in a new market. When a firm is expanding its operation in a new country, it also needs to identify regulations guiding the industry of operation. In fact, this is crucial in understanding the demands at play to ensure that the firm at hand can operate under the stipulated regulations in a competitive manner. The combination of all external factors to a company are the ones referred to as environmental factors. In the same line of thought, this analysis aims at shedding light on the business environmental factors present in Japan in an attempt of availing critical information on how best the U.S. consumer product company can operate in the country competitively.

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Green Laws

Japan is fully committed to reducing the greenhouse gas (GHG) emission. This was affirmed by The Ministry of Environment (MOE) with the announcement of long-term strategies for reducing GHG effects through strategic changes in social and economic. Moreover, through the Fourth Basic Environment Plan approved in 2012, the goal of the Japanese government was to reduce the greenhouse gasses by 80% by the year 2050. The government has come up with policies that encourage both the corporations and public to use eco-friendly methods of production and way of life. In promoting this form of approach to production and way of life, Japan has enacted the green market where the goal is to establish a new carbon market. Moreover, there is the use of carbon pricing in the form of carbon taxes to discourage firms from using methods that cause enormous pollution to the environment. The government also has the mandate to influence the nature of innovation that can be allowed in Japan based on its impact on the environment. Therefore, there is a need to ensure that a due diligence approach is utilized before commencing the operations in Japan so that mandatory demands are met. This will not only caution the business from preventable charges but also help the company minimize unnecessary conflict with the country’s authority.



Japan has invested a lot in sustainable development, particularly, in the field of energy. The country has invested heavily in carbon-free hydrogen. The country’s intention is to invest in ‘energy carriers’ like ammonia and methylcyclohexane. Moreover, the principal intention of the country is to enhance its production of hydrogen where the cabinet is fully committed to finding cheaper methods of electrolyzing water. In 2015, the national plan for production of hydrogen was rolled in the whole country. It is also the intention of the government to ensure by the end of this year that cell-driven garbage collection in the line of improving the country aim of upholding a sustainable way of line.

Moreover, in order to help the country to forge ahead in attaining a sustainable development, in this year, The United Nations (UN) Information Centre of Japan has come up with catch phrases of sustainable development goals in Japanese-language shown in icons. The aim is to popularize the sustainable movement around Japan. These are clear demonstrations of how Japan is committed to adopting a model of development that enhances a sustainable way of life in all aspects. Consequently, there is a need to ensure that expansion into Japan meets the expected threshold of being in line with the country’s ambition of enhancing a sustainable way of life.


The level of technology in Japan is among the best in the world. If there is one front that Japan has been able to be at par with the western nations, it is technological advancement. Through technological advancement, Japan has been able to come up with a high-speed transport system that enables a quick movement of the people. Moreover, Japan has also been able to come up with a reliable source of energy in the economy for both private and commercial sectors. The country is in the process of intensifying their source of energy with huge investments being made to tap the wind energy. The researchers have also found out a technology of generating electricity using Ammonia fired gas turbines.

Much of the investments are geared towards ensuring that the country has enough energy for all usage but above all eco-friendly source of powering its economy. Moreover, due to the country’s economy being technological based, the country has made crucial gains in ensuring that its technological readiness index is higher, making its economy ready to exploit opportunities in communication and information technology. Thus, it is clear that Japan has the needed level of technology to support any form of business.


Japan has one of the most qualified skilled labor around the world, a phenomenon that can be traced to the Japanese form of education. Innovation is highly encouraged in school with many students being involved in groundbreaking innovations. For example, Aihara Prefectural High School students and a group of small companies conducted the research that demonstrated the effects of tatami mats in green roofing as a mean of cooling in summer and warming in winter. Similarly, the students in Kyoto Municipal Fushimi Industrial High School created a Micro Hydro Power System that is now being used worldwide. Lastly, in 2015, LIXIL in close collaboration with Tohoku University innovated a toilet lighting system that works even during the emergency where some areas are cut from the power supply. These are just but a few examples illustrating how the Japanese education has been useful in developing skilled labor making it easier for any business to access employees that are empowered enough to engage in relevant tasks. This means that a company coming to Japan will be able to get skilled and innovative native employees.


Human relations and societal order are very crucial for smooth operations of a company. It is through the existence of public order that it becomes possible for a business venture to exploit the available human and non-human resources without unnecessary interruptions. In the context of Japan, the discipline among people is high with the country experiencing stability for a long time, making it a good environment for doing business. In Japan, bribery cases are very low and such behavior is illegal. In 2015, Japan was ranked at position 18 out of 167, concerning Transparency International’s Corruption Perception Index.

Moreover, Japan still performs dismally when it comes to anti-corruption laws, a phenomenon that has left Japan experiencing business gifts being exchanged a lot compare to the western nations. Moreover, the country is better known for respecting human rights and press freedom, a clear indication of the high level of civility in the country. Besides, Japan is well known to meet a vast majority of international standards regarding both personal and political rights. However, the company performs dismally when it comes to gender equality, where females are highly disadvantaged. There is also elements of racial discrimination and frequent evidence of hate speech. Over and above, Japan offers a relatively stable and predictable environment for business.


Japan presents a good business environment since it has enough skilled innovative workforce not to mention the high level of technology. Moreover, Japan is keen on encouraging a sustainable way of life, and, thus, there is a need for a company to familiarize itself with the authority’s ‘green’ demands to make sure that the business venture does not start on a wrong foot. Japan also has an education system that works in close collaboration with the society and companies in the line of ensuring that students gain at school needed knowledge in solving challenges that are facing its society.

Therefore, a company that wants to expand its operation in Japan can be assured that through hiring natives, it will be in a position to quickly settle in the market due to the great death of insights that is availed by the native employees. Furthermore, with the reliable source of energy, low level of corruption, high level of technology, clear guidelines of green laws and availability of skilled labor, Japan presents an opportunity that if well exploited can lead to a business venture experiencing financial growth in a sustainable manner.


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