Keiretsu system as a barrier to foreign companies’ entering the Japanese market
Many business people attempting to penetrate the Japanese market have often failed. They attribute their failure to the distinctiveness of the Japanese business culture. Regularly blamed is the Keiretsu system, which prohibits foreign companies from operating in their country. The production and circulation of the Keiretsu, has become one of the core points that have encouraged trade disagreements between Japan and its key trade partners, particularly the United States and Europe. Business negotiators in the United States and the European Union have stated that the keiretsu system prohibits the entrance of foreign goods and businesses into the Japanese market.
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The keiretsu take up a leading position in the Japanese market, standard competitive requirements do not prevail within its markets. This is because keiretsu lead to exploitative deeds and entry-restraining procedures. The lack of correctly imposed competition regulations can hinder market entrée. Japan’s producers and component contractors are connected in permanent bonds which makes an entrance by new companies impossible. The elaborate systems of cross-shareholdings that link the partners of the keiretsu family are also viewed to form a resistant barrier against foreign controls. The US has considered the keiretsu system as the main obstacle responsible for Japan’s decline in manufacturing imports for domestic use and her bulky and continual trade surplus.
Influence of cultural ties, old colonial ties, and shared languages on international global business
As a result of international migration, different communities can live in other countries. These communities form ethnic areas that function as networks of global business. For example, in Los Angeles associates of the Chinese community do business with China, business enhanced by shared language and ethnic ties. Cultural and ethnic links become a significant network of international trade. Studies have also revealed that exports are high in nations that are ethnically closer because they have similar preferences. Face to face communication is essential for business relationships because essential information is passed on. A shared language can ease this transmission. This communication builds trust that helps in the exploitation of business prospects in the face of contract execution challenges.
Colonial ties between nations and sharing a common language have shown to increase international trade. A common language encourages global businesses both directly and through translation. The main European languages are more efficient than other languages in enhancing global business. Also, a shared language and colonial ties are crucial for differentiated commodities than for goods sold on planned exchanges in corresponding global buyers and sellers. Colonial and ethnic ties produce more contacts between nations therefore enabling information movement and therefore commerce. Also, shared language influences the ease with which other connections can be made. This can help the search for new business prospects; through direct search or business mediators.
Why do some industries become global while others remain local or regional?
There are various reasons why industries remain local or regional. First, the market is limited to a small region and there are only a few local industries to race with. As a result, foreign industries might not be fascinated by entering. Second, the expenses involved in transportation prohibit the industry from becoming global. For instance, steel making tends to remain regional though there are large economies of scale involved. Third, ethnic-sensitive and location-specific firms such as insurance and restaurant are regional. Moreover, the government may guard specific firms such as educational, defense-connected to stay local.
Industries become international because the net competitive benefits of a global approach become important. This may result from exogenous environmental changes, like changes in government policy or a nation’s infrastructure. In other companies, tactical advancements by companies can open the possibility for globalization. Those who succeed in globalizing their industries are usually first movers; the first industry to recognize the prospects for a global plan and move to execute one.
As both global trade and investment multiply fast, global competition increase and many local industries become global. Local industries are not essentially invulnerable from global competition. Global industries may regulate commodities is usually disjointed industries. For instance, McDonald’s transformed from being local to being international by regulating goods and services and emerged an international industry.
Does a college or university having any international programs make it an international organization?
Hawaii Pacific University, has international programs however, this does not make the institution an international organization. This is because an international organization is a formal, continuous structure formed by a treaty between partners, from no less than two sovereign nations to follow the mutual concern of the membership. Also, it involves many institutions. On the other hand, a university is an institution of higher learning and research and it does not have to involve more than two sovereign states nor involve other institutions.
International organizations work in a sort of political market place where the bond between communities, groups, trade, nations are considered. Their key functions in the international market are many. They are responsible for jostling in trade with other groups and nations. Various questions are raised concerning international organizations: Do they have an impact on international trade? Do they influence the operation of the business? The functions of international organizations will affect international relations. In contrast, a university is a single entity whose activities may not influence the global market.