The External Marketing Environment in the Global Marketplace

 

U Drive Transport

Memo

To:	JennaHarris
From:	General Manager
cc:	Karl
Date:	August 25, 2018
Re:	U Drive Transport Moving To Tokyo

After some preliminary research, I have found many positive opportunities for expansion into Tokyo, Japan for U Drive Transport. While there are also possible threats that would have to be measured, making our first global step via Japan appears to be a viable option. Below is a quick synopsis of both the opportunities and threats for all six areas of the external environment in Tokyo.

Socially, car sharing is a strong market with high growth potential, especially for electric cars, as the current market seems to lean more toward the use of higher efficiency gas powered cars. The eco-friendly benefit of electric cars could very well jumpstart this new venture, as the effects of our carbon footprints are under intense scrutiny in today’s society. However, Park 24 (a large car sharing company that is quickly gaining ground), along with other enterprises, has a deep stronghold on the current market in Tokyo, (Nikkei, 2014) and it may be hard to break into this market as an American newcomer.  Also, there is the risk that some may not appreciate electric cars, as they have the reputation of decreased performance and power.

Demographically consumers are younger generations, well educated, and have higher incomes than their counterparts here in the U.S. The Japanese are adopters of the latest digital gadgets, and right now the big trend is to reduce carbon footprints (Lamb, 2014). There is a high volume of potential customers-Tokyo is literally packed with people, but with little space for personal cars. And there are future growth opportunities in expanding out from Tokyo. The threat may be how the Japanese respond to buying/using our American product, and whether they will prefer their Japanese counterpart because of loyalty. Also, while many Japanese can, and do, speak English, we would need to enter our business dealings abroad with bi-or multilingual employees for best results.

In regards to economic factors, Japanese consumers have better access to higher education, leading to higher disposable income (higher per capita income). Theirs is a stable and growing economy, and Japan is one of the world’s leading countries in several areas: technology, innovation, etc (State.gov 2014). However, Japan is also one of the top 3 most expensive cities, with one of the highest cost of living in the world (Lamb, 2014).

Technologically Japan is one of the most advanced countries in the world. One benefit is U Drive Transport would have major opportunities for free or low cost advertising via social media, youtube, etc. Also, “developing new technology internally is key to creating and maintaining a long-term competitive advantage, external technology is also important… by acquiring the technology, the firm may be able to operate more efficiently or create a better product. Second, a new technology may render existing products obsolete” (Lamb, 2014). However, without diligence, the possibility of being replaced by a technologically better Japanese electric car-sharing enterprise is real.

Politically we have a strong alliance with Japan, and likelihood of good partnership or shared business with a Japanese investor, or even just with realtors for location(s), is high. Japan has a strong democracy and very large economy. “The U.S.-Japan bilateral economic relationship--based on enormous flows of trade, investment, and finance--is strong, mature, and increasingly interdependent. It also is firmly rooted in the shared interest and responsibility of the United States and Japan to promote global growth, open markets, and a vital world trading system” (State.gov 2014). In regards to political or legal threats, further detailed research will be needed. If Japan is where we want to start, we need to verify all regulations, rules, business customs and laws, before approaching/making contact with any possible business associates.

In regards to competitive factors, car sharing is a strongly growing market in Tokyo, as well as its surrounding areas. There seems to be more of an open market for electric cars vs. gas cars, which could give U Drive an advantage with its slightly different, and more eco-friendly, business plan. The biggest threat to U Drive Transport’s success is Park 24 already has a strong hold in Tokyo, and is branching out to other areas with its own car sharing enterprise (Nikkei, 2014). There are also other car-sharing ventures in play in Tokyo, though they are far less reaching that Park 24 at this point.

From these preliminary findings, I believe it is worth the time and effort to further research expansion into the global market with our company, and Tokyo may be a great starting point. Please contact me with the best time for us to schedule a more in depth review of my findings at my extension, 4722, or via email.

U Drive Transport External Environmental Analysis

World Region: East Asia and Pacific Islands   Country: Japan

Major City Center: Tokyo

Social External Environmental Factors

Opportunities: strongly growing market, high growth opportunity if accepted into the culture; electric cars will be a large plus as they are much more eco-friendly-current companies seem to offer compact gas efficient cars

Threats: Park 24, along with other enterprises, has a deep stronghold on current market (Nikkei, 2014)-may be hard to break into this market as an American newcomer, some may not appreciate electric cars as they have the reputation of decreased performance and power.

Demographic External Environmental Factors

Opportunities: younger, better educated with higher incomes than counterparts in US; early adopters of latest digital gadgets and new big draw is to reduce carbon footprint (electric cars). High volume of potential customers-Tokyo is literally packed with people. Future growth opportunities in expanding out from Tokyo.

Threats: consumers may prefer to utilize Japanese brand/company over American. Otherwise aren’t much different from in US, other than competitive market. *language barrier*

Economic External Environmental Factors

Opportunities: consumers have better access to higher education, leading to higher disposable income (higher per capita income). Stable and growing economy, one of the world’s leading countries in several areas (technology, innovation, etc)

Threats: one of the top 3 most expensive cities (cost of living) in the world (Lamb, 2014)

Technological External Environmental Factors

Opportunities: highly techno-savvy country- major opportunities for marketing for free or low cost via social media, youtube, etc. “Developing new technology internally is key to creating and maintaining a long-term competitive advantage, external technology is also important… by acquiring the technology, the firm may be able to operate more efficiently or create a better product. Second, a new technology may render existing products obsolete” (Lamb, 2014).

Threats: without diligence, possibility of being outbid, or replaced by a technologically better Japanese electric carsharing market is real

Political and Legal External Environmental Factors

Opportunities: strong alliance with Japan, likelihood of good partnership or shared business with Japanese investor, or even just with realtors for location(s), is high. Japan has strong democracy and very large economy. “The U.S.-Japan bilateral economic relationship--based on enormous flows of trade, investment, and finance--is strong, mature, and increasingly interdependent. It also is firmly rooted in the shared interest and responsibility of the United States and Japan to promote global growth, open markets, and a vital world trading system.” (State.gov 2014).

Threats: further detailed research will be needed, if Japan is where we want to start, to verify all regulations and rules, as well as business customs and laws, before approaching/making contact with investors, or buyers, or even realtors and possibly business associates.

Competitive External Environmental Factors

Opportunities: strongly growing market in Tokyo, as well as its surrounding areas. There seems to be more of an open market for electric cars vs. gas cars, which could give U Drive an advantage with its slightly different, and more eco-friendly business plan.

Threats: Park 24 already has a strong hold in Tokyo and is already stretching out to other areas with its own car sharing enterprise. There are also other car sharing ventures in play in Tokyo, though they are far less reaching that Park 24 at this point.

References

Lamb, C. W., Hair, J. F., & McDaniel, C. (2014). MKTG7. Mason, OH: Cengage.

Nikkei Asian Review. “Park 24 aims to become master of Japan's growing car-sharing market”.   March 9, 2014. Retrieved from http://asia.nikkei.com/Business/Companies/Park-24-aims-   to-become-master-of-Japan-s-growing-car-sharing-market

State.gov. U.S. Relations With Japan: Bureau of East Asian and Pacific Affairs. January 31,                     2014. Retrieved from http://www.state.gov/r/pa/ei/bgn/4142.htm