There are several benefits associated with introducing the new product in Japan. Some of the factors that favor the introduction of the product in Japan include the population distribution in Japan. The population in Japan is variable. Many people also live in the plain areas that make the delivery of the product much easier. The population in Japan comprises a majority of the youthful population. The youthful population provides a good market for the product. Despite these benefits and reasons, some factors pose significant threats in introducing the product in Japan. One of the hindrances is the culture in Japan. The people in Japan embrace a nationalist culture in which they favor products that are locally manufactured.
Many business organizations that carry out operations at the international level face significant challenges in maintaining focus and direction. The decision to take a company's operations to an international level will pose new risks associated with increased operations while increasing limitations for business success. There is a need to focus on essential core values and study the new location's culture to increase the chances of the business to thrive at the international level (Free Management Books, 2021). The company should ensure that the organization's operations and culture are aligned with the culture of the new population. The EPG business model will play an essential role in guarding against backdrops resulting from international business engagement.
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Deploying the EPG model will ensure that the company's efforts are well mobilized towards achieving the long-term and the short-term goals of the company. Failure to deploy the EPG model poses risks of business failure and lack of direction. The EPG business model encompasses; ethnocentrism, polycentrism and egocentrism. This strategy should be favored over the global strategy: high integration and low responsiveness strategy. Under this approach, companies exhibit a higher level of centralization.
Deploying the ethnocentrism business model will imply that the company traditions and thinking and general decision-making in Japan's new location will be based on the business values, culture, and traditions in the united states. This approach will be simple to deploy since the company is well aware of American values and culture. However, the company faces the risk of irrelevancy in decision-making. Application of the American system of culture and tradition might not be effective. The polycentrism approach encompasses developing strategies and business decisions in a foreign country by applying the people's knowledge and skills in the host countries. In this approach, the company invests more trust into the staff in the host countries. This approach helps to increase business diversity.
One of the benefits associated with this model's use is high worker satisfaction as the employees in the foreign countries feel trusted and valued. The companies that deploy this approach make high sales since the company stays in touch with the people's values and culture. However, there is a risk of work duplication, which increases the general costs of operation. The third approach is geocentrism. Under this approach, organizations take a world view approach in making decisions and strategies that guide the business operations. Under this approach, a company values the culture, values, and traditions of people in the host country and considers them in developing business strategy and essential business decisions (Free Management Books, 2021). The companies that use this model avoid creating divisions with the nationality. Under this approach, a company would consider becoming a cohesive unit.
Adoption of an effective international business strategy will be essential for the company. As globalization advances globally, many small and medium-sized companies have taken their operations at the international levels. There are four strategies related to global integration and local responsiveness. They include; multidomestic strategy, global strategy, transnational strategy, and international strategy. These four strategies lie either under local responsiveness or global integration. The most effective international business strategy for the company is multidomestic: low integration and high responsiveness.
Adopting this model will ensure that the company meets the requirements and demands of the local market by aligning, tailoring, and customizing its products, services, and products with the local market. Under this strategy, the company will have minimal global integration pressure. Under this strategy, the company subsidiary in Japan will benefit from autonomy and independence from the headquarters in the United States (B2U - Business-to-you.com, 2021). The strategy will enable the company to increase its competitive advantage by offering low opportunity costs in producing goods.
Determining the company's product's costs in the new markets will go beyond the calculation of incurred costs during the production process. Product pricing will be considered as one of the critical aspects of marketing strategy. The company can deploy two pricing strategies in increasing brand visibility in the new market. The first strategy is price penetration. In this pricing strategy, the company will set the price low to entice customers to purchase. This pricing strategy will enable the company to capture a huge market share while creating brand loyalty. The second pricing strategy that can be deployed to increase brand visibility in the new market is price skimming. This pricing strategy involves setting a high initial price of a product and lowering the price as the market evolves.
There will be various activities deployed in developing a product promotion plan for the new product. Some of the activities include running social media contests, writing blogs on the new product, hosting events, and using special introductory offers (Kienzler & Kowalkowski, 2017). The people attracted to these events will receive the product at a low price to create customer loyalty.
The decision to expand the market of the company’s product to a new market in Japan poses several advantages and several risks. On the one hand, the company faces the risk of increased operations, limiting the chances of business success. The culture in the host country could not favor the consumption of the new product. On the other hand, there are benefits such as increased sales, revenue, and profits. The company needs to invest in effective product marketing and development of an effective international business strategy to guide the company's operations and mobilize the efforts of all the employees towards achieving the organization's mission and vision.
References
Free Management Books. (2021). The EPG Model . Retrieved 14 April 2021, from http://www.free-management-ebooks.com/news/the-epg-model/ .
B2U . B2U - Business-to-you.com. (2021). International Business Strategy EXPLAINED with EXAMPLES | Retrieved 14 April 2021, from https://www.business-to-you.com/international-business-strategy/ .
Kienzler, M., & Kowalkowski, C. (2017). Pricing strategy: A review of 22 years of marketing research. Journal of Business Research , 78 , 101-110.
