CEO Message

Together with the times . . .

With the Internet being used more and more and the consequent increased global competition, it is no longer uncommon for companies of all sizes to deal with suppliers and customers in other countries.

Not so long ago, when people wanted to buy or sell anything overseas, due to the so-called language barrier, legal paperwork, and uncertainty about the differences in the business practices and cultures, it was common for people to either opt to only do business in their own country or, if they did decide to deal with a foreign company, to do so via a large trading company. Also, in Japan, there was a lot less price competition in many industries due to the (bubble) economy being so good.

That era, however, has come to an end.

In 1991, I left the UK on a journey which would bring me to Japan.

At that time, there were almost no individuals or companies with either email or websites. The number of people who owned mobile phones was also very low with only 150,000 mobile phone contracts in Japan in 1991 (1.1% of the population). By 2015, the number of mobile phone contracts had increased to 16 million (107. 1% of the population).

30 years ago, it would seem that there was considerable resistance to travelling overseas. Other than business trips, almost all the overseas travel was accounted for by couples on their honeymoons. Things have changed to the extent that it is now less expensive to go on an overseas holiday tour package than to go to a traditional hot spring resort (onsen) in Japan for a couple of nights. While it is true that more people are traveling overseas than before, the number of Japanese nationals who ventured overseas has only increased by 50% over the last 30 years (10.6 million in 1991 to 16.2 million in 2015).

When seen from overseas 30 years ago, prices in Japan were very high, and Japan was considered an expensive destination. Compared to the UK at that time, both the salaries and prices in general were very high. During the last 30 years, the prices in other countries have gradually and consistently increased, but the prices in Japan have remained very similar since the collapse of the bubble economy (1991−1993). In fact, the prices of many commodities and services in Japan have decreased during the same period. When comparing the economies (prices) of the UK and Japan in 1991 and now, it can be said that the situation has been completely reversed. The prices in countries such as the UK have increased while those in Japan have decreased or remained about the same. This has had an effect on the number of foreigners who visit Japan, which was 5.6 times higher in 2015 than in 1997 (3.5 million in 1991 and 19.72 million in 2015).

30 years ago, it was very rare to see a foreigner in Fukuyama City (population at the time was approximately 370,000), and even rarer to speak with a foreigner unless it was in an English classroom. It was the norm to assume that foreigners didn’t speak Japanese and that Japanese people didn’t speak English, at least not very well. Even in major cities like Tokyo, there were very few foreigners who could speak Japanese. Now, from factory workers to caregivers, there are many foreigners working in and contributing to society in Japan. When in supermarkets and convenience stores, it is no longer uncommon to see foreigners as either customers or staff.

30 years ago, when I arrived in Japan, it was extremely expensive to make a telephone call from Japan to another country. Now, by using services such as Skype or FaceTime, it is free.

In all these ways, the society in Japan (as with that in many other nations) is becoming more and more international.

It is not just that the imports of low-cost foodstuffs, raw materials, electronic components, and daily items, etc. from China and other Asian countries are increasing, but they are being used in our everyday lives as a matter of course. Also, it is now both simple and common to purchase luxury items from the USA, Europe, Australia and other countries around the globe. While Japanese-made cars are still the majority in Japan, it is no longer uncommon for people to own foreign-made cars. These are just more examples of how Japan is increasingly becoming a global society.

Considering this background, it is now essential for the Japanese corporations which support the economy and society in Japan to recognize, understand and accept this globalization, and adapt as part of it. While many corporations do recognize the need to adapt, they unfortunately find it very hard to do so. Companies that realize they are having difficulties adapting are able to rethink and restructure in order to try new ways to evolve with the changing times. However, a majority of companies implement measures without realizing that they are wasting resources with strategies that are either outdated or simply not suitable to their industry or the current global economy. In many cases, in addition to wasting time and money, these measures can have the reverse effect to that for which they had hoped.

Hyman International checks to see if their clients’ strategies are suitable for the current business environment, and assists them to efficiently evolve in and adapt to the global society in order to improve their position in their industry.

March 2015