Target PPT by Brandon Mingo

Corporate Expansion Japan & United Arab Emirates (UAE) Brandon Mingo International Marketing Summer 2012

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An archipelago in the Pacific, Japan is separated from the east coast of Asia by the Sea of Japan. It is approximately the size of Montana. Tokyo hosts over 35 million people in the metro area (Japan). Yen (Japan). First World nation with highly advanced economy, 3rd largest in the world (Japan).

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The United Arab Emirates, in the eastern part of the Arabian Peninsula, extends along part of the Gulf of Oman and the southern coast of the Persian Gulf. (UAE). UAE Dirham (UAE). The UAE has an open economy with a high per capita income and a sizable annual trade surplus. Successful efforts at economic diversification have reduced the portion of GDP based on oil output to 25% (UAE).

Demographics of Labor Force: • Over 69 million, 69.8% in service sector and 26.2% in industry sector (Background). • Hardworking, educated, advanced, technologically savvy, honest (Isenberg).

• 4.11 million, high proportion of foreign-born employees. • Agriculture: 7% • Industry: 15% • Services: 78% • Large expatriate workforce (CIA).

Online Marketplace: â&#x20AC;˘

One of the most technologically advanced nations, economies, and populations in the world, Japan has all the high-tech means to offer new business ventures. Just recently, in order to ensure stability, the Bank of Japan injected more than $325 billion in yen into the economy. Estimates of the direct costs of the damage-rebuilding homes and factories-range from $235 billion to $310 billion. In August 2011, the government revised downward its fiscal year inflation-adjusted GDP forecast to 0.5%. Government plans called for massive spending, as high as $295 billion, on reconstruction efforts in disaster-affected areas to stimulate economic growth (Background).

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Over the past decade, the United Arab Emirates has made a name for itself as a place of excellence for telecommunications and IT. With the most modern facilities and infrastructure, such as the Dubai Media City, the country is the perfect place to advance your operations (Benefits).

Political: • • •

Japan is a parliamentary government with a constitutional monarch. No political corruption. Extensive political involvement has occurred in terms of economy due to recent natural disasters affecting the nation (Central).

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The UAE is federation with specified powers delegated to the UAE federal government and other powers reserved to member emirate. No government corruption, yet there are disputes in neighboring nations over boundaries (Central).

Economic: • • • • • •

In $USD: Exchange Rate: 78 yen GDP: 5.4 trillion GNP: 4.5 trillion Per Capita:$34,600 Japan has a lower per capita dollar amount than that of the US and UAE yet their economic stance in dollar amount is stronger than the UAE and comparable to many trillion dollar economies (Economy).

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In $USD: Exchange Rate: 3.6 dirham GDP: 360.25 billion GNP: 380.51 billion PPP: $48,900 A lower rating in economic amounts compared to Japan and the US. In terms of the country’s population in numbers, their per capita is on par with many Western Nations (Economy).

Trade Barriers/Regulations: •

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“On average, the applied tariff rate in Japan is one of the lowest in the world. In addition, import duties on many agricultural items continue to decrease, and tariffs in many major sectors, such as autos and auto parts, software, computers, and industrial machinery are zero. “While tariffs are generally low, Japan does have non-tariff barriers that impede or delay the importation of foreign products into Japan (Trade).

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“In April 2004, the UAE signed a Trade and Investment Framework Agreement with Washington and in November 2004 agreed to undertake negotiations toward a Free Trade Agreement with the US, however, those talks have not moved forward. The country's Free Trade Zones offering 100% foreign ownership and zero taxes - are helping to attract foreign investors. This has attracted much attention from Target for ease of distribution of consumer goods to the stores (Central).”

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Included in the report is the Incoterms that will be in place for transactions between Target and Japan/UAE. To keep balanced trade relationship, Target would like to divide the costs of trade with the buyer/seller partnership. Target will discuss all of the terms listed in the 2010 chart in order to cover all basis in international trading. Based on this scenario, the best mode of transport for both countries would be by sea, this will be more cost effective in terms of price and volume able to ship at one time. Both parties are responsible for certain charges and actions in this shipment. Through this research, Target has decided that Tokyo, Japan would be the best placement for a new City Target location. This is due to their strong economy, high per capita income and also the Incoterms discussed. Table outlining these decisions is proposed next (IBT).

Customs: â&#x20AC;˘ According to the press release from Ministry of Finance or (MOF) in Japan, U.S. Customs and Border Protection (CBP) and Japan Customs and Tariff Bureau in MOF signed the mutual recognition agreement in AEO (Authorized Economic Operator) program. This occurred in the fiscal year, 2009 (Global).

â&#x20AC;˘ In April 2004, the UAE signed a Trade and Investment Framework Agreement with Washington and in November 2004 agreed to undertake negotiations toward a Free Trade Agreement with the US, however, those talks have not moved forward. The country's Free Trade Zones - offering 100% foreign ownership and zero taxes - are helping to attract foreign investors. This includes the US and customs in trade(CIA).

Child Labor: •

Japanese Law provides that children shall not be exploited. It also provides provisions to protect child workers. The Labor Standards Law states that, “employers from employing children until the March 31 immediately following the child becoming fifteen years old. March 31 is the end of a school year. Children are obliged to go to school usually until that time. Children thirteen years old or older, however, may be employed if the labor is light and not injurious to their health and welfare, and if the employer obtains permission from the local Labor Standards Administration office. Children under thirteen years old can be employed only in motion picture production and theatrical performance enterprises, upon permission of the Labor Standards Administration office. An employer cannot employ a person under eighteen years old for extended-hour or night-time work (Children’s).”

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The government was committed to children's rights and welfare, and expended resources on the welfare of citizen children; however, noncitizen children received fewer benefits (United). As required by U.A.E. law and the International Labor Organization Minimum Age Convention ratified by the U.A.E., no person younger than 15 years old will be employed to provide services in connection with NYU Abu Dhabi (Statement).

Compensation/Benefits/Working Hours: • • • •

“Wages must be paid in cash and in full directly to the workers “These wages must be paid at least once-amonth at no definite date. This does not apply to bonuses or extra wages.” Unlike many other countries in Asia, Japan has its own universal healthcare system, which is comprehensive and relatively cheap. “Employers shall not have employees work more than 8 hours a day, also no more than 40 hours per week (Japan Labor).”

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Because United Arab Emirates does not have a minimum wage, there is no mandatory minimum rate of pay for workers in United Arab Emirates. Pay rates must be agreed upon directly with the employer through collective bargaining or other means of negotiating a fair living wage (Minimum). State and workplace benefits for local employees rival those offered in most western countries. This is especially true in the city of Dubai. State benefits include a pension, built-in death and disability cover, and healthcare. (Paterson). The standard workday is eight hours per day, and the standard workweek is six days per week; however, these standards were not strictly enforced (United).

Corporate Social Responsibility (CSR): • • • • • •

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Business Link listed these benefits to Target as well: A good reputation makes it easier to recruit employees. Employees may stay longer, reducing the costs and disruption of recruitment and retraining. Employees are better motivated and more productive. CSR helps ensure you comply with regulatory requirements. Activities such as involvement with the local community are ideal opportunities to generate positive press coverage. Good relationships with local authorities make doing business easier. See the page in this guide on how to work with the local community. Understanding the wider impact of your business can help you develop new products and services. CSR can make you more competitive and reduces the risk of sudden damage to your reputation (and sales). Investors recognize this and are more willing to finance you.

Business Ethics: • •

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In terms of Business Ethics, there are advantages in conducting these behaviors. According to Chron Small Business: “Business ethics offer companies a competitive advantage. Consumers learn to trust ethical brands and remain loyal to them, even during difficult periods. In 1982, Johnson & Johnson spent over $100 million dollars recalling Tylenol, its best-selling product, after someone tampered with bottles of the painkiller. The company followed its credo, a set of ethical organizational values, and the result was a boost in consumer confidence, despite the contamination scare. Society benefits from business ethics because ethical companies recognize their social responsibilities (Advantages).” Johnson & Johnson products are also offered in Target stores, their ethical standing along with ours will provide comfort in consumers knowing they can trust Target and our vendor’s decisions and actions.

Ideal Opportunity For Expansion: â&#x20AC;˘ In conclusion, Target will move forward in opening a City Target ÂŽ store location in the Ginza Shopping District of Tokyo, Japan. The information above has provided the sufficient reason in completing the expansion. Target is excited to move forward in this process.

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"Background Note: Japan." U.S. Department of State. U.S. Department of State, n.d. Web. 31 July 2012. http://www.state.gov/r/pa/ei/bgn/4142.htm "Benefits of Doing Business in the UAE | Cross Cultural Training." Benefits of Doing Business in the UAE | Cross Cultural Training. N.p., n.d. Web. 31 July 2012. <http://blog.communicaid.com/crosscultural-training/benefits-of-doing-business-in-the-uae/>. "Central Intelligence Agency." CIA. N.p., n.d. Web. 31 July 2012. <https://www.cia.gov/library/publications/the-world-factbook/geos/ae.html>. "Japan." Infoplease. Infoplease, n.d. Web. 31 July 2012. <http://www.infoplease.com/ipa/A0107666.html>. "Japanese Economy." Japanese Economy. N.p., n.d. Web. 31 July 2012. <http://www.japanguide.com/e/e644.html>. Isenberg, Daniel. "Entering the Japanese Market." IVCJ, Jan. 2004. Web. 31 July 2012. <http://www.docstoc.com/docs/1082533/Advantages-and-Disadvantages-of-doing-Business-inJapan>. "Our Stores." Target : Company :. Target Corporation, 2012. Web. 31 July 2012. <http://sites.target.com/site/en/company/page.jsp?contentId=WCMP04-031761>. "Real Insight into Japanese Consumer Markets." JapanConsuming. N.p., n.d. Web. 31 July 2012. <http://www.japanconsuming.com/>. "UAE." Infoplease. Infoplease, n.d. Web. 31 July 2012. <http://www.infoplease.com/ipa/A0108074.html>.

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"Background Note: Japan." U.S. Department of State. U.S. Department of State, n.d. Web. 03 Aug. 2012. <http://www.state.gov/r/pa/ei/bgn/4142.htm>. "Children's Rights: Japan." Children's Rights: Japan. N.p., n.d. Web. 03 Aug. 2012. <http://www.loc.gov/law/help/child-rights/japan.php>. "Global Trade Compliance." US-Japan Agreed Mutual AEO Program. N.p., n.d. Web. 03 Aug. 2012. <http://japantradecompliance.blogspot.com/2009/06/us-japan-agreed-mutual-aeo-program.html>. "Introduction." UAE Trade Office in Washington D.C. N.p., n.d. Web. 03 Aug. 2012. <http://www.uaetradeusa.org/index.php?page=uae-us-relations>. "Japan Labor Standards Law." Japan.- Labor Standards Law. N.p., n.d. Web. 03 Aug. 2012. <http://www.ilo.org/dyn/natlex/docs/WEBTEXT/27776/64846/E95JPN01.htm>. "Japan." Office of the United States Trade Representative. N.p., n.d. Web. 03 Aug. 2012. <http://www.ustr.gov/countries-regions/japan-korea-apec/japan/>. "Japanese Holidays." Japanese Holidays. N.p., n.d. Web. 03 Aug. 2012. <http://www.japanguide.com/e/e2062.html>. "Minimum-Wage.org - World Minimum Wage Rates 2012." World Minimum Wage Rates 2012. N.p., n.d. Web. 03 Aug. 2012. <http://www.minimum-wage.org/minwage/international/>. Paterson, Jennifer. Employee Benefits. Sift Unity, 02 Aug. 2010. Web. 3 Aug. 2012. <http://www.employeebenefits.co.uk/item/11122/pg_dtl_art_news/292/pg_ftr_art>. "Statement of Labour Values." NYU Abu Dhabi University & College in UAE, New York University. N.p., n.d. Web. 03 Aug. 2012. <http://nyuad.nyu.edu/about/labour.values.html>. "United Arab Emirates." U.S. Department of State. U.S. Department of State, n.d. Web. 03 Aug. 2012. <http://www.state.gov/j/drl/rls/hrrpt/2005/61701.htm>. Washington, Tom. "Benefits in Japan." Employee Benefits. Sift Unity, 05 May 2009. Web. 3 Aug. 2012. <http://www.employeebenefits.co.uk/item/8810/pg_dtl_art_news/292/pg_ftr_art>.

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"Central Intelligence Agency." CIA. N.p., n.d. Web. 15 Aug. 2012. <https://www.cia.gov/library/publications/the-world-factbook/geos/ae.html>. "Central Intelligence Agency." CIA. N.p., n.d. Web. 15 Aug. 2012. <https://www.cia.gov/library/publications/the-world-factbook/geos/ja.html>. "Economy Watch - Follow The Money." The World Economy - US, Japan, UAE. N.p., n.d. Web. 15 Aug. 2012. <http://www.economywatch.com/world_economy/>. "Trade Regulations and Standards of Japan." GlobalTrade.net. N.p., n.d. Web. 15 Aug. 2012. <http://www.globaltrade.net/f/business/text/Japan/Legal-andCompliance-Trade-Regulations-and-Standards-of-Japan.html>. http://www.i-b-t.net/incoterms.html (Incoterms Information & Chart) "Advantages & Disadvantages of Business Ethics." Small Business. Chron, n.d. Web. 15 Aug. 2012. <http://smallbusiness.chron.com/advantages-disadvantagesbusiness-ethics-10414.html>. “Business Ethics: Sample Policies." Inc.com. N.p., n.d. Web. 15 Aug. 2012. <http://www.inc.com/articles/2000/10/14404.html>. "The Business Benefits of Corporate Social Responsibility." Corporate Social Responsibility. Business Link, n.d. Web. 15 Aug. 2012. <http://www.businesslink.gov.uk/bdotg/action/detail?itemId=1075408491>.

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