With only 15% of the total land mass available for commercial and residential purposes, japan heavily relies on imports from other nations making it the fifth largest importer in the world. Consequently, the country is a member to many international business organizations, a move intuited by the country to increase and bilateral investment and trade. Globally, the country’s real GDP growth in constant prices was at 3.938% in 2011, making it the fastest growing country among the G7 countries.

Geographically, japan is an island of nations located in East Asia with the capital in Tokyo. The country has the tenth largest population in the world standing at 126 million people. The country demonstrates high levels of technological advancement with Tokyo receiving credit for being an industrial city. Japan is home to Toyota and Nissan; the world is leading manufacturers of personal vehicles.

Political environment

The country is a monarchy by default, with the emperor, a ceremonial figure, regarded as the head of state. The prime minister held chief powers in the country and assisted in administration by elected members of the diet. Politics plays a crucial environment on beef exports to japan. Most of the company’s dealing with importing beef products have political affiliation. In 2014, both governments entered into a bilateral trade agreement in which japan agreed to reduce the tariffs on Australian beef imports to allow more movement of beef imports from Australia to japan. The agreement meant to provide preferential access of Australian beef imports into the country owing to the complimentary business relationship between the two countries.

Legal environment

Following the outbreak of the bovine Spongiform encephalopathy disease that affects livestock, Japan banned the importation of beef products from Canada, USA, France, Ireland and Netherlands. Fortunately, enough the ban was in favour of Australia. The animal quarantine services of japan did not classify Australian beef exports as carriers of the virus. The animal quarantine services body has set up shops in Australia for the purpose of issuance of an inspection certificate to ease the whole importation process.

Social environment

The japan government tries to ensure that the country is self-sustaining in the production of foodstuffs; however, most of the modern japan nourishment is imported. The high volume of imports of foodstuffs to the country is mostly due to the growing demand of agricultural land for domestic and commercial purposes. The government was reluctant to open its market previously to meat products from abroad but pressured from consumers on the part of japan and producers from Australia, the united states and Canada opened the barriers making beef products from these countries readily available. The beef imports have to be modified to suit japan diets, which are highly regarded by the Japanese people. The influx of the beef importation into japan has helped to ensure greater vertical segmentation of the beef market in japan, especially for beef exports from Australia, whereby both cheaper cuts and beef products are available to consumers with different incomes and tastes.

Technological environment

Shipment of beef products from Australia to japan is usually in frozen or chilled form, a move meant to preserve quality and freshness of the product. Transportation in chilled from is more expensive than in the frozen state. Chilled beef products require specially designed haulers to enable the products maintain the temperatures while, on the other hand, frozen beef don’t require much so long as the beef remains at temperatures ten to twenty degrees below freezing point. The beef products in from Australia have praise for having a longer shell life of up to 90 days upon shipment compared to other nations

Environment

Australia

The Australian economy in particular reflects a combination of cooperative monetary policies with relatively manageable financial environments since 2012. The region also expects to reap from inter-global demand externalities, reflecting a growing demand for Asia pacific products. Consistent with this gradual growth coupled with the absence of economic shocks, inflation will stabilize from 2012 onwards. Coupled with the vast endowments of natural resources the country prides itself in having a vibrant service industry. In addition, the country is the dominant exporter of natural resources, foodstuffs, and energy. The government has instituted fundamental business principles to boost investments. Some of the policies range from integration of free and open trade together with the culmination of the Doha round. Whose objective geared towards achieving reforms of the international trading mechanism by introducing reductions in trade barriers and revision of existing trade rules, for the introduction of multilateral trade dealings and the inclusion of agriculture and services.

The Australian meat and livestock of Australia records show that beef imports to japan during September of 2014 declined at a rate of 17% annually, a move expiated by Japanese exporters who chose to avoid triggering of the tariff inclining safeguard systems. Consequently, the beef imports tariff to the country remained at 38.5% for the final quarter of the japans fiscal year of 2013. At the same time, prices at wall street stayed firm than predicted, despite the prevailing conditions favoring the importation of beef from cattle 3-4 years or younger since February. The statistics reveal that net import value of Americas frozen plate and brisket declined to 366 yen/kg representing an ease of 11%. On the other hand, beef imports into the country were at 401,116 tonnes gaining 3% from the previous year. The US and Australia took the lion share of the market at 35% and 53% respectively. (Trading Economics, 2014).

Environment

Australia is the world’s fifth largest producer of beef due to the comparative advantage it enjoys in terms of forage resources against other countries. Coupled with low opportunity costs and a small domestic market, the country makes relies heavily on exporting beef products abroad.

Market environment

Following the ban on Asian imports from the united USA, this helped boost and redirected exports to the japan segment of the beef market. The Australian industry responded positively to this transition by boosting production and producing more beef products at high quality. Peak beef prices reached in 2005-2006 periods after the end of the global credit crisis and recession

Consumer and social environment

The taste and preference of consumers vary greatly. The food market experienced subtle shifts that had important effects for the beef industry. Consumer confidence is high in the Australian case given the return to economic growth, and people increased expenditure on segments negatively affected by the previous economic recession. Beef restaurants and retail outlets reported an influx of customers buying more beef cuts than ever before. The population exhibited a conscious for healthy beef products.

Political imperatives

The Australian system was once a heavily protectionist society, but with the culmination of the global crisis. The government opened up the borders to more exports and imports. The country is highly ranked in term of trade openness and scores highly in this sector. Following the signing of the Doha round, the government agreed to increase the volume of exports to other countries. The Australia-Japan trade agreement signed in 2014 agreed to let japan export more vehicles t Australia at decreased tariffs in exchange for Japan decreasing it import duty on Australian beef exports from 38.4% to a lower figure.

Discussions

From the findings of the study, it is evident that the trade relationship between Australia and Japan has continued to grow; this has fostered the growth of the beef export and import industry between the two nations to levels that are advantageous to both countries. The paper focused in analyzing the business environment in the context of legal, political, technological, social, and environmental focusing on the defects they had on the performance of the beef export-import industry between the two nations. The findings show that, business has been on an inclining trend following the long cordial relationship between the two nations. The rising demand for Australian beef products by the Asian country has helped in the growth of the sector.

The findings demonstrate that during the last quarter of the past decade, the social-economic environment has continued to shape the beef industry in a number of ways. For example, the culture of the Japanese people is a high preserve and exporters from the Australian segment have been forced to tailor make their imports suit Japanese’s cultural aspects.

Politically, the beef industry is a game of strategy and chance. The strategy laid down by the Australian government to open up the economy and liberalize the markets was a smart move aimed at enticing other nations like japan to follow suit. Upon the realization of this target, Australia moved forward to consolidate itself as a market leader in the importation of beef and beef products to japan.

Following the signing of the Australia-japan trade agreement (JAEPA) on the April of 2014, the Australia beef industry is set to achieve significant milestones in the history. Studies suggest that JAEPA will boost beef sales from Australia to the tune of $5.5 billion over the next two decades. At the same time, some studies suggest that tariffs on chilled beef will decline from 38.5% to 23.4% over the coming fifteen years. As expected, this represents a positive transition to the long establishment of a trading relationship between Australia and japan providing Australia a preferential trading advantage over the other nations. Consequently, the deal will ultimately benefit the Japanese consumers who stand to gain from the alleviation of the A$590 million annually on import tariffs for Australian beef prices. Not only will the deal enhance the affordability of Australia’s beef for Japan’s consumers but in essence, it will also help boost the demand for Australia beef products.

The global beef industry depends on the interplay between supply of the product and demand. Japan being one of the largest importers in the world, plays a crucial role in keeping the industry over the edge. With the signing of the Australia-Japan trade agreement in 2014, the import channels have opened up streamlining the importation of beef products to japan. Coupled with this, the import ban slapped on beef imports from Canada, Ireland, and the Netherlands gives Australia, an upper hand in establishing itself as the global exporter of the beef products. Basing on the above discussions, the study recommends the following to various stakeholders in the beef industry on how to increase efficiency and productivity of the industry.

Recommendations

The business market, just like everything else, changes with time. The business may start realizing the accomplishment of its business goals, and plans for new ventures may be underway. For the business, expansion of the business would not only mean that the business would realize additional returns, it would also translate to having an edge over other competitors in the highly competitive environment. However, the company faces a dilemma: Expanding new country markets in Australia, or entering hot growth export market to Japan. The first option would be a safe bet as it would be a low risk though it may take longer before it starts gaining massive returns. The second option would mean entering a foreign domain, where it may not have experience in, but getting it right would mean that it would incur huge returns.

Competition would be low as not many companies would be willing to invest in foreign economies. New companies mainly target the realization of profit and returns in their objectives, and would be more interested in amassing profits within the shortest time possible (Prahalad & Ramaswamy, 2013). Investing into a foreign economy is a long term investment, as it would take time for the company to establish itself and gain a regular clientele base. Lack of stiff competition would help the company to establish itself and to set up operation centers. Its objective would be marketing and public relations, and this would pay off in the long-run when other competing firms arrive as the company would already have a strong foundation and public trust.

The company would benefit more through expansion of its existing products into emerging economies. Since it is proficient in the daily activities of running company information through having many years experiences (Blank, 2013). For instance, the company may be efficient in the production and distribution process, together with the rules and regulations of running such a company. As such, it will not spend time analyzing the processes required from the production to the sales process. The company also saves on costs associated with learning the activities of running the operations of the company. The firm can also send experienced employees to the new branches so that they can assist the expansion in its foundation stage. The new branches as a result gain from the wealth of experienced gained from working in the same company for a long time. Since the challenges faced will not be unique, the experienced employees will be able to oversee all operations and provide effective solutions to challenges.

Conclusion

The study sought to establish the prospects available in the beef industry with a focus on the Australia to japan beef exports. Various environments affecting the performance of the business stood on the bench for cross-examination. The political, social, technical, environmental and legal environments were all part of the mix. The study adopted a conceptual framework to analyze the prospects available in investing in the industry, and the conceptual framework revolved around how the various environments influenced the performance and the survival of the business. The analysis also used a cross-dimensional model of time that showed the trends in the industry on the part of the exports, competition and imports across the globe. Data collected and presented was mainly from areas concerning the export and import business between the two countries. The study gathered data from the meat and livestock department of Australia (MLA) regarding the volume and value of exports to Japan and tried to analyze the trends in the industry over the last ten years. The study also chose to seek statistical data on the economic state of the two nations from the trade economic website

Insufficient funds, limited time and access to data to conduct a full market analysis were the main impediments to the study. The market segment is large yet limited research is available regarding the industry, making it hard to draw valid conclusions about the viability of the business in the long- run. The research had either to rely on government reported data or data from the World Bank and the IMF. Most of the websites hosting the statistical data were selling their data or were scam websites. The websites purported to contain information relating the study, which, in the real sense was invalid and irrelevant to the study. Finally, the study was unable to carry out an effective study of the competitiveness of the industry after the ban on the importation of beef products from USA to Japan.

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