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BUS581 Five Guys Burgers

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Sunny Xu

on 4 March 2013

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Transcript of BUS581 Five Guys Burgers

Milena Flament Why and http://www.fiveguys.com/ International Business Feasibility Study Bus 581 Japan? Justification of Japan An Effective Market A huge need of western fast food Barriers can be overtaken easily Three Alternative Strategies Germany Japan Australia Germany - Europe & population: 28,629,000 Japan - Asia & Population: 127,568,000 Australia - Oceania & Population: 2,270,000 Overview of Japan Geography -

North-eastern Asia
377,873 square kilometers
Four major islands: Hokkaido, Honshu, Shikoku and Kyushu
Neighbors: China, North Korea, South Korea, & Russia Population -
The world's tenth-largest population: over 127million
Composed of 98.5% ethnic Japanese, with smaller population of foreigners
Most resident in Tokyo Metropolitan Area. Income -
The third largest national economy in the world after the United States and the China
Per capita GDP was at $34,739 Language -

Only one official language: Japanese
compulsory education requirement: English Religion -

Full religion freedom
Buddhism or Shinto: 84%-96% Education -
Implementing compulsory education: age 6-15
Attending University : 75% high school graduates Thorough analysis of Japan --"Land of the Rising Sun" Japan History Transform it from a feudal society to an industrialize nation After WWII, adopted a democratic constitution Economy System "a capitalistic nation" The stable economy system
A democratic ideal:
- the spirit of compromise and consensus
Group-oriented Japanese:
- apportion wealth and nurture growth Political System Conducts a framework of a parliamentary representative democratic monarchy
Encompasses the multi-party system
Government - an important role in the foreign investment Social System Group-oriented compared the west
Middle Class: A remarkable 90% or more of Japanese people
Group - structured hierarchically
Rank within the group and responsibilities based on position Legal Issues Examples:
the conditions and activities for parts involved in:
- the financial industry
- supervision of financial authorities
- maintain of fairness in the foreigner
- investment market, and
- protection of the consumer Cultural Practices
- Hofstede’s model of cultural dimensions If we explore Japanese culture through the lens of the five-dimension model, we can get a good overview of the deep drivers of Japanese culture relative to the success of our corporation in Japan. Power Distance Individualism vs Collectivism Uncertainty Avoidance Long-term vs Short-term Orientation Masculinity vs Femininity Japan vs US Marketing Practices & Opportunities Japan:
PDI score: 54
A formal & hierarchical society
Egalitarian relationship : United States
PDI score: 40
Equal rights in all aspects
Informal, direct and participative U.S. : Japan:
A collectivism society
A strong sense of shame for losing face
A strong loyalty : United States
A individualism culture
self-independent and display initiative
Decisions based on employees’ capacity and contributions Japan:
UAI Score: 92
Prepare for future
Much time & effort putting into planning :United States
UAI Score 46
Easily accept new ideas & innovation
Allow the freedom of expression Japan:
A masculinity society
competitiveness, assertiveness, materialism, ambition and power
workaholism :United States
Considered as a masculine culture with MFI Score 62
talk freely about their achievement and contribution
“Winner takes all” Japan:
A long-term orientation
Companies focus on R&D
Employees are durability :United States
A short-term orientation
Companies rewarded by short-term basis
Employees strive for quick results With a rapidly developing pace of globalization in the modern society, Japan has been enormously successful at competition in global market. Therefore, we can learn a lot of valuable lessons from studying the historical marketing practices in Japan, and then seek more market opportunities in Japan that available to our Five Guys Burgers developing successfully. Marketing Practices 1.Imitation and integration
2.Buyer is the God
3.Do not have “Marketers” It is useful to understand how the Japanese market their products, especially since companies like Toyota are critical in the competition. Market Opportunities As one of the largest economies in the world, Japan is a large, lucrative and trend-setting import market. The country is a significant energy importer and the world’s largest net importer of food. Home to 71 Fortune 500 corporations, Japan has manufacturing, exporting and trading companies that are at the heart of supply and value chains that reach across Asia and around the world. 1. Government Support
2. Fast Food Industry Growth Japan

Professor: Greig S. Locker, PhD

Group Members:
Vianey Diaz
Weinan Xu (Sunny)
Sida Zhang (Sida) Bus 581 JAPAN Five Guys Burgers Fun Facts Five Guys Burgers is fast food restaurant chain focused on hamburgers, hot dogs, and French fries.
1000 locations by 2012 and over 1500 locations under development.
a 32.8% sales increase from 2010 to 2011
annual sales of 625 million with over 1000 stores nationwide
Five Guys identity is their peanuts.
High Quality Raw Materials to produce the fresh meals
Best Customer Service
NO MARKETING….. “Actions speak louder than words”
Priority is to invest an employee and customer service Motives of Foreign Expansion Enhance domestic competiveness and sales & profit Find a market that correlates with Five Guys Philosophy The right market population Five Guys Burgers Expansion Analysis of Three Alternatives The Quantitative-Degree Judgment Index Method is a scientific method that it try to statistical indicators, utilize the given formula and model to conclude the results of analysis. It can show an index to measure the degree of factors. The statistical data used in the model are from the Bureau of statistics in Japan , Germany, Australia, World Bank and IMF. In this case, the degree is showed following: Human Resources Analysis "Hiring, Training, Retention, Advancement, & Compensation" Compensation Package Career Development Japan Practices Training Recruitment Process Five Guys Burgers -- HR Analysis Foreign Investment In Japan JETRO- Japan External Trade Organization

A non-profit Japanese government related organization that promotes trade and investment opportunities for business and companies in the United States and Japan

Services they provide:
- Tours with Japanese Businesses

- Meeting with key Japanese Individuals

- Promotion rates in taxes, rent, R & D and more Financial Analysis - Japan Banking The Bank of Japan is the central bank of Japan
It is a juridical person established based on the Bank of Japan Act, and is not a government agency or private corporation. The Missions of Bank of Japan : Eleven major banks: Banking Issuance and management of banknotes, implementation of monetary policy
Providing settlement services and ensuring the stability of the financial system
Treasury and government securities-related operations
International activities
Compilation of data, economic analyses and research activities Mizuho Bank
Resona Bank
Saitama Bank
The Bank of Tokyo-Mitsubishi UFJ
Sumitomo Mitsui Banking Corporation
Mitsubishi UFJ Trust and Banking Corporation
Mizuho Trust and Banking Company
Sumitomo Mitsui Trust Bank
Mizuho Corporate Bank
Shinsei Bank
Aozora Bank Currency Gross Domestic Product of Japan Exchange rate of USD to JPY Upside Risks: Downside risks: The exchange rate of yen is affected by : Trillion Real long-term yield falls in the US and companies become active, thus growth beats expectation, pushing Japan’s exports and output higher.
European fiscal concerns recede in response to strong policy responses. Yen depreciates significantly alongside further monetary loosening and market intervention. Deflationary expectation wanes in Japan as global inflationary expectation heighten alongside increased government spending to support reconstruction efforts. Economic concerns result in extreme caution about an inventory build-up, so significant adjustments are made.
Yen rises sharply for whatever reason
US companies remain defensive and restructure, leading the US economy into a downturn.European debt crisis worsens.
Crude oil prices surge due to geopolitical issues in the Middle East.
Monetary and fiscal tightening measures are taken globally, due to concerns about inflation and fiscal deficits.
Fiscal tightening (including a consumption tax hike) due to excessive concerns about Japan’s fiscal deficits. Ministry of Finance
Bank of Japan, overnight interest rate
Japanese Government Bond
Economic and Fiscal Policy Agency
Major economic data, for instance GDP, the Nikkei 255 index, and other monetary exchange rate. Accounting Practices ASBJ (Accounting Standards Board of Japan)
FASB (Financial Accounting Standards Board ) Some of the major accounting gaps:

Operating Income
Research and Development Expense
Fixed Assets
Lease Business Income Tax In Japan, in view of the corporate income tax rate (corporation tax) mainly includes the legal person of the assessable income to the collection of national tax (about 30%) and local tax. And local tax includes that even if no assessable income, the companies also have to pay to the standard capitation tax based on the size of the company. So, contained the actual local tax, the business income tax rate is about 42%. In addition, the corporate tax that the tax amount divided by net profit before the actual burden rate, in most cases, is more than the actual rate. In the local tax, even if the legal person not have assessable income, also must pay capitation tax based on legal residents’ tax and external standard tax based on the size of corporation. That is to say, even if the legal person income is deficit, the company also has the obligations to pay taxes. The reason is that the legal person, as the resident of this area, benefits from the local government in the public service facilities, so must pay the local tax. Paying business income tax has to make a tax declaration. In terms of national tax, the companies have to make a tax declaration to tax bureau where companies belong. And in terms of local tax, companies have to make declarations to local prefecture and district. If the branches and shops located in different prefectures and districts, the branches and shops have to make declarations separately. Foreign Trade Policies Japan import is very strict at food quarantine and epidemic prevention system, from agriculture products to animal products. The non-tariff is the mainly measures on agriculture trade protection. It includes the import of which is prohibited or restricted by legislation to set up the import licensing system, quantitative restrictions, price limit and anti-dumping measure. The Organizational Structure: Agenda Cultural practices - Hofstede's Model
Marketing Practices & Opportunities
Human Resources Analysis
Financial Analysis
The Organizational Structure Agenda Overview of the company -Five Guys
Motives of foreign expansion
Three alternative strategies
Justification of the chosen country
Overview of the country - Japan
Thorough analysis of Japan
Full transcript