NATIONAL ECONOMICS UNIVERSITY

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SCHOOL OF ADVANCED EDUCATION PROGRAMS

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COURESE: INTERNATIONAL MARKETING

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Topic: Fentimans plan to launch their botanically brewed soft

nn n n n n n n n

n drinks ninto nthe nJapanese nmarket

Student: Lê Hà Nhi
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ID Student: 11183799
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 Contents
1. nJapanese nmacro nmarket nanalysis n(PESTLE nmodel)......................................1

1.1. nPolitical nenvironment.....................................................................................1

1.2. nEconomic nenvironment..................................................................................1

1.3. nSocial nenvironment........................................................................................2

1.4. nTechnological nenvironment...........................................................................2

1.5. nEnvironmental nfactors...................................................................................3

1.6. nLegal nenvironment.........................................................................................3

2. nJapanese nsoft ndrinks nmarket............................................................................3

3. nFentimans ncompetitive nadvantage nrelative nto ncompetitors nin nthe nJapanese

n soft ndrinks nmarket nusing nPorter’s n(1985) nValue nChain...................................5

3.1. nInbound nlogistic.............................................................................................5

3.2. nOperations......................................................................................................5

3.3. nOutbound nlogistics.........................................................................................6

3.4. nMarketing nand nSales......................................................................................6

3.5. nService............................................................................................................7

3.6. nInfrastructure..................................................................................................7

3.7. nHuman nResource nManagement.....................................................................8

3.8. nTechnology nDevelopment.............................................................................8

3.9. nProcurement...................................................................................................9
4. nThe nfit nof nthe nJapanese nmarket nopportunity nwith nFentimans’ nmission
n and ncapabilities nand nany nfurther nresearch nrequired nprior nto nlaunch...........9
1. nJapanese nmacro nmarket nanalysis n(PESTLE nmodel)
1.1. nPolitical nenvironment n
Japan nis na nconstitutional nmonarchy nwith nthe nemperor nbeing nthe nhead nof nstate.
nJapanese nmonarch nhas nvery nlimited nsay nconcerning nthe npolitical naffairs nof nthe
ncountry. nHowever, nthe npeople nand nthe nconstitution nof nthe ncountry nregard nthe
nemperor nas n“the nsymbol nof nthe nState nand nof nthe nunity nof npeople”.
Tokyo nis nthe ncapital nof nJapan. nJapan nhas na npost-war npacifist nconstitution. nBBC
n(2020): n“It nplays na nconsiderable nrole nin ninternational ncommunity nand nis na nmajor
naid ndonor”. nWhile nthe ninternal npolitical nenvironment nis nstable, nJapan nhas nsome
nvery npowerful nneighbours nwith na nlong nhistory nof ndiplomatic nchallenges. n
Japan nhas nbeen nputting na nlot nof nefforts nto nbuild nand nmaintain nrelationship nwith
nother nworld npowers nsuch nas nUK, nFrance, nAustralia,.... nHowever, nan neffort nto
namend nJapan’s npost-war npacifist nconstitution nhas nraised nconcerns. nIt nis
npolitically ncontentious nand nmay nimpact non ntrade nand nforeign ndirect ninvestment.

1.2. nEconomic nenvironment

Japan nis nthe n3rd n nlargest neconomy nin nthe nworld nwith na ntotal nGDP nof naround n$4.9
ntrillion. nIt nis nalso nthe n2nd n nlargest neconomy nin nAsia. nIt nis na nmember nof nthe nG7,
nG20, nAPEC, nand nASEAN. nIt nhas na nmixed neconomic nsystem, nalbeit nthe
ngovernment n closely n works n with n industries. n Motor n vehicles, n electronic
nequipment, nmachine ntools, nsteel, nships, nchemicals, ntextiles, nand nprocessed nfoods
nare nsome nof nthe nmajor nindustries nin nJapan. nJapanese ncompanies nneed nto npay
ncorporate ntax non nthe nincome nthey ngenerate nin nJapan nand nabroad. nOn nthe nother
nhand, nforeign ncompanies noperating nin nJapan npay ntax nonly non nthe nincome nthey
ngenerate nwithin nJapan. n

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1.3. nSocial nenvironment
According nWorldometer, n2021: n“Japan nis nranked nas nthe n10th nmost npopulated
ncountry nin nthe nworld. nIts ncurrent npopulation nis n126.2 nmillion”. n
Japan nfaces na nnumber nof nsocial nchallenges. nAgeing npopulation nand nsinking nbirth
nrate nare ntwo nof nthe nbiggest nchallenges. nMany nsources nforecast nthat: n“Japanese
npopulation nis nlikely nto nfall nbelow n100 nmillion nin n2048 nand nabout n87 nmillion nby
n2060. nThis nwill nseverely nimpact non nJapan nand nit nwill nlose nout nto nregional
npowers”. nTherefore, nmany nJapanese npoliticians nare nnow nhighlighting nan
n‘integrated’ nimmigration npolicy nto ndraw nvital nforeign nworkers nto nJapan nto
nreduce nthe nskill-gaps ncreated nby nshrinking nbirth nrate nand nageing npopulation.
Many npeople nin nJapan nprefer nJapanese ncompanies nto nforeign nones. nThis nmakes
ntrading ndifficult nfor nforeign ncompanies. nIndeed, nthis nis none nof nthe nmain nreasons
nas nto nwhy nmany nforeign ncompanies nfailed nin nJapan. nTherefore, nit nis nextremely
nimportant nfor nforeign ncompanies nto ncarry nout na ndetailed nenvironmental nscanning
nbefore nentering ninto nJapan.

1.4. nTechnological nenvironment

Japan nis none nof nthe nmost ntechnologically nadvanced ncountries nin nworld. nIt nhas
nbeen npushing ntechnological ninnovation nand ncreativity nin nsuch na nway nthat nmany
ncountries nwill nstruggle nto nemulate. nThe nJapanese nare nwell-known nas nextremely
ncreative nin nsearching nout nand nlearning nto nuse nmodern ntechnologies. nJapan’s
ninnovation nalso ncan nbe nfound nin na nvariety nof nfields. nThe ncontactless npayment
nsystem nhas nbeen nin nJapan nfor na nlong ntime nand nJapan nhas nalso ndone
ntremendously nwell nin nareas nsuch nas nspace nresearch nand ndevelopment, nchemicals,
noptics, nrail ntransport, nand nsemi-conductors. nThese ndevelopments noffer ngreat
nopportunities nfor nboth nJapanese nand nforeign nindividuals nand ncompanies.

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1.5. nEnvironmental nfactors
Japan nis na nrelatively nclean nand nenvironmentally nresponsible nnation. nHowever, nit
nfaces nsome nenvironmental nchallenges ntoday. nTrash nproduced nby nthe nmodern
nsociety, nindustrial nactivities, nand nagriculture ncontribute nto nthe nproduction nof na
ngreat ndeal nof nwaste. nJapan nis nindeed nunder npressure nto nminimize nwaste nand
ncontrol nenvironmental npollution.
Japan nis none nof nthe ncountries, nmost naffected nby ncalamities nand nnatural ndisasters.
nTsunamis, nfloods, nearthquakes, nmudslides, ncyclones, nand nvolcanic neruptions nhit
nJapan nfrom ntime-to-time. nThese ndisasters ncost nJapan nbillions nof ndollars nfor
nreforms nand nrebuilding. nIn nfact, nJapan nis na nless npopular ntourist ndestination
nbecause nof nnatural ndisasters, nhigh-cost, nand nlanguage nbarriers.

1.6. nLegal nenvironment

People ncan nwork nin nJapan nas nemployees, ndispatched nworkers, nindependent
ncontractors, nand ndirectors. nAll nemployees nenjoy nemployment nrights nand nbenefits
nsuch nas nmaximum nwork nhours, nwork nbreaks, nholidays, nand nmaternity nleave.
nCompanies nneed nto nregister nemployees nfor nmandatory npension ninsurance, nhealth
ninsurance, nunemployment ninsurance, nand nworkers’ naccident ncompensation
ninsurance. nAll nof nthese napply nto nemployment nrelationships nregardless nof nthe
ncitizenship nof nemployees.

2. nJapanese nsoft ndrinks nmarket n

By nconfirming nits nprevious ntrends, nthe nJapanese nsoft ndrinks nmarket nappears nto
nbe nin ngood nhealth: n“Expansion nis ncontinuing nas nwell nas nongoing ncompetivity
nand nmarket nopportunities. nThe ndynamicity nof nthis nsector nis nalso ndue nto nthe
ngrowth nof nper ncapita nconsumption nand nthe nrelease nof nnew nsoft ndrinks nthat nbetter
nrespond nto nthe nnecessities nof nthe nJapanese nconsumers.”
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The nJapanese nbeverage nindustry nis nwidely nknown nfor nthe nrange nof nproduct
nofferings nin nthe nmarket: n“There nare nmany ncompanies nselling nsoft ndrinks nin
ndifferent nflavors nand nsizes. nThe nuniqueness nof nsoft ndrinks navailable nin nthe
nmarket nis nquite na nreflection nof nthe nJapanese nculture”. nAt nany none ntime, nmore
nthan n5,000 ntypes nof nnonalcoholic nbeverages nfrom nabout n700 ncompanies nare
navailable, nthe nJapan nSoft nDrink nAssociation nsays. nEach nyear, nnearly n1,000 nnew
nbeverages nappear non nJapan’s ncrowded nstore nshelves. nOnly n10 npercent nsurvive na
nyear nor nmore, nwhile nthe nrest nfizzle nout. nAt n22 ngallons nper nperson nper nyear,
nJapanese nsoft-drink nconsumption nstill nis nonly nabout none-third nof nthe nU.S. nlevel,
nbut nit nis nrising.
According nto nthe nreport nof nJapan nSoft nDrink nAssociation: n“The nmarket nsize nof
nbeverages nexcept nalcoholic ndrinks nin nJapan nis n51 nbillion ndollars”. nThe nonly
nbeverage nthat nwas nable nto nbeat nsoft ndrinks nin nterms nof nmarket nshare nis ntea
ndrinks. nThis nis nstill na nsuccessful nfeat nconsidering nthat ntea nhas nbeen nan nessential
npart nof nJapanese nculture neven nfrom ncenturies nago, nwhile ncarbonated ndrinks nare
nnewly nintroduced nfrom nthe nWestern nmarket njust ntwo ncenturies nago.
There nare nseveral nsoft ndrinks nmanufacturers nin nJapan. nThe nleading nis nCoca-Cola,
nwho nhappens nto nbe nthe nnumber none nsoft ndrinks nbrand nglobally. nHowever, nthe
nother ntop nplayers nin nthe nmarket nare nall nproudly nJapanese. nThese ncompanies nare
nSuntory, nKirin, nIto nEn nand nAsahi. nThe nfact nthat nthey nhave nso nmany nleading
nmanufacturers nof nsoft ndrinks nwho nsell nin nand nout nof nJapan nis na ntestament nto
nhow nmuch nthe nJapanese nenjoy ntheir nsoft ndrinks.
The nreason nwhy nsoft ndrink nmanufacturers nare nsuccessful nin nJapan nsimply nboils
ndown nto ntaste npreference. nMajority nof nthe nJapanese npopulation nfind ncarbonated
ndrinks nthat noriginate nfrom nthe nWest. nThis ndoes nnot nonly napply nto nsoft ndrinks,
nbut nalso nto nother nforms nof nbeverages nsuch nas njuices.

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3. nFentimans ncompetitive nadvantage nrelative nto ncompetitors nin nthe nJapanese
n soft ndrinks nmarket nusing nPorter’s n(1985) nValue nChain
3.1. nInbound nlogistic
The ninbound nlogistics nfor nFentimans nrefers nto nusing nnatural ningredients nwith
nsourcing nthe nglobe nin nAmericas, nEurope, nand nAsia. nTo nensure nquality nand
ntraceability, nFentimans ntake nownership nof nthe ndrink nmaking nprocess nfrom nstart
nto nfinish, nwith nthe nsimple nethaos. nOnce nthe nnatural nbotanicals nhave nbeen
nsourced nand nprepared, nthe nmulti-stage nbotanical nbrewing nprocess nbegins.

3.2. nOperations
Highly nexperienced nflavor nteam nof nFentimans nwill ncraft na nperfectly nbalanced
nflavor. nThe nteam nare ncharged nwith ncreating nthe ndepth nof ntaste, nmouth-feel nand
ntexture npeople nexpect nfrom na nFentinmans ndrink. nThomas nFentiman's nbotanical
nbrewing nis na ntechnique nusing na ncombination nof ninfusion, nblending nand
nfermentation nof nnatural ningredients. nThis napproach nhas nnot nchanged nmuch nin
nover n100 nyears nas nthe nknowledge nand nexpertise nhave nbeen npassed non nfrom
ngeneration nto ngeneration nof nthe nFentiman nfamily.
Processes nof nproduce nbotanical nbrewing nstart nby ninfusing nbotanical ningredients
nin nsimmering nwater, nto nextract nthe nnatural nflavors. nIt’s nthe nsame nwith nobtaining
nflavor nfrom nan narray nof nbotanical ningredients; nthe nflavor ncreation nprocess nresults
nin na nconcentrated nand nbalanced nbotanical nliquid, nwhich nis nthen nready nto nbe
nfermented. nFermentation ntakes nplace nfor n7 ndays; nallowing nrich nand ncomplex
nflavors nto nslowly ndevelop nas nthe nyeast, nsugar nand nnatural npear njuice ncome nto
nlife. nTo ncomplement nand nenhance nthe nfermented nbotanical nliquid, nnatural
nflavors nand nessential noils nare nextracted ninhouse nfrom nexpertly nsourced
ningredients; nthen nmixed nwith nthe nfermented nbotanical nliquid. nThis nresults nin nthe

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nindulgent, ndistinctive nand ncomplex nflavors. nWater nand nnatural nbeet nsugar nare
nadded nbefore ncarbonation nadds nsparkle nto nthe nliquid.

3.3. nOutbound nlogistics

In n1905, nThomas nbegan nusing nthe nrecipe nand nproducing nbotanically nbrewed
nginger nbeer nwhich nhe ndelivered ndoor-to-door nusing na nhorse nand ncart nfor
ntransport. nBut nthe nworld nhas nchanged na nlot nover n100 nyears nsince nThomas
nFentiman nfounded nthe nbusiness. nFentimans nhave nhad nto nadapt nto nmeet nthe
ndemands nof nan never nchanging nworld. nChanges nin nthe nway npeople nshop nhas
nmeant nour ndoor-to-door ndeliveries nhave nmade nway nfor nselling nonline nand nin
nshops, nbars nand nrestaurants. nFentimans ncan nanalyse nand noptimize nthe noutbond
nlogistics nto nexplore ncompetitive nadvantage nsources nand nachieve nits nbusiness
ngrowth nobjectives.

3.4. nMarketing nand nSales

At nthis nstage, nFentimans nwill nhighlight nthe nbenefits nand ndifferentiation npoints nof
noffered nproducts nto npersuade nthe ncustomers nthat nits noffering nis nbetter nthan
ncompetitors. nIn norder nto ncompete nin nan nextremely ncompetitive nmarket, nthe
ncompany nhas nbranched nout nof ntraditional nsoft ndrinks ninto nthe nhighly nlucrative
nmixers nmarket. nThe ncompany nis non ntarget nto nhit n£50m nin nrevenue nby n2020 nand
nhas ngrown nfrom na nsmall nfamily nbusiness nto na nglobally nrecognized nbrand. n
Some nexamples nof nFentimans’s nmarketing nand nsales nactivities: n“The nbrand
nstages na nbotanical npop-up nbar ntour nacross nfood, ndrink, nregional, nand nmusic
nfestivals nthroughout nthe nUK nin nthe nsummer nmonths. nTheir nplan nis nto nchannel na
nvery nBritish nfeel nwith na nsummer ngarden nparty ntheme. nGuests ncan nrelax nin ndeck
nchairs nunder nhuge numbrellas nto nshield nthe nsun. nThey nalso nchannel nmemorable
nmoments nand nunderstand nthe nvalue nof nthe ninfluencer. nThe nrise nof nsocial
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ninfluencers nhas npresented nthem nwith nan nopportunity nand nthey nhave nrealized nthe
npower nof nInstagram. nThe ncompany naims nto ncreate n‘instagrammable’ nmoments
nfor nconsumers nand nin nMay n2019 nthey ntook ntheir npink nLandrover nto nLondon’s
nCovent nGarden nand ncreated na nstunning nfloral ninstallation. nIt nwas nso ninsta-genic
nthat nit nreceived nmore nthan n1000 npieces nof nfree ntagged ncontent nin njust none nweek
nwith nan nestimated nreach nof nover n10 nmillion npeople.”

3.5. nService
The npre-sale nand npost-sale nservices noffered nby nthe nFentimans nwill nplay nan
nimportant nrole nin ndeveloping ncustomer nloyalty. nThe nmodern ncustomers nconsider
npost-sale nservices nas nimportant nas nmarketing nand npromotional nactivities.
Fentimans nprides nitself non nonly nusing nnatural ningredients nand nproduce ntheir nown
nunusual nflavors nsuch nas: ndandelion nand nburdock, nwild nEnglish nelderflower,
nmandarin nand nSeville norange njigger, ncherry ncola, ncuriosity ncola, ntraditional
nginger nbeer, nlimeflower, nrose nlemonade, nsparkling nlime nand njasmine. nThe
ncompany nalso nboasts na nmechanical nbrewing nprocess nwhich nis nunique nand nthis
nhas nhelps nthem nstand nout nfrom nthe nmyriad nof ncopycats. nThey nare nthe nonly
nbotanical nbrewers nin nthe nUK nand nbelieve nthat nthe nunique nway nthey nmake ntheir
ndrinks ngives na nvery ndifferent nflavor nwith na ndistinctive nmouth nfeel. nAll nflavors
nare nmanufactured nin-house nwhich ngives nthem ncontrol nover ntheir nIP. nFrom
nSeptember n2019, nFentimans nis nlaunching na nrange nof nnew nlight nsoft ndrinks. nThis
nrange nincludes na nlower-calorie nversion nof nthe nbrand’s nrose nlemonade, nsparkling
nelderflower nand nsparkling nraspberry nflavours.

3.6. nInfrastructure
The nfirm ninfrastructure ndenotes na nrange nof nactivities, nsuch nas nquality
nmanagement, nlegal nmatters nhandling, naccounting, nfinancing, nplanning nand
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nstrategic n management. n Effective n infrastructure n management n can n allow
nFentimans nto noptimize nthe nvalue nof nthe nwhole nvalue nchain. nFentimans ncan
ncontrol nthe ninfrastructure nactivities nto nstrengthen nthe ncompetitive npositioning nin
nthe nmarket.
3.7. nHuman nResource nManagement
As nFentimans’s nis na nsmall nand nmedium nsized nenterprise, nlimited nhuman nneeds nto
nbe nallocated neffectively nin norder nto nmaximize nprofits nand nfuture ncash nflow.
nFentimans ncan nanalyze nhuman nresource nmanagement nby nevaluating ndifferent
nHR naspects, nincluding nrecruiting, nselecting, ntraining, nrewarding, nperformance
nmanagement nand nother npersonnel nmanagement nactivities. nThe neffective nHR
nmanagement ncan nallow nFentimans nto nreduce ncompetitive npressure nbased non
nmotivation, ncommitment nand nskills nof nits nworkforce. nThe ncompany ncan nalso
nachieve nthis ncost nminimization nobjectives nby nanalyzing nhiring nand ntraining ncosts
nwith ntheir nrelative nreturn. nThe nheavy ndependence nof nFentimans non nemployees’
ntalent nwill nincrease nthe nimportance nof nthis nvalue nchain nsupport nactivity.

3.8. nTechnology nDevelopment

Fentimans nuses na ntraditional nprocess nand nfine ningredients. nThe nbusiness nis
nowned nby nthe ngreat ngrandson nof nfounder nThomas nFentiman nand nalthough nthe
nprocesses nhave nbeen nupdated, nthe nsuperior nquality nand ntaste nof nthe ndrinks nhas
nnot nchanged. nBotanical nbrewing nuses na ncombination nof ninfusion, nskilful
nblending nand nfermentation nof nnatural ningredients nwhich nprovides ndepth nof
nflavor nand na nthree-dimensional nmouth nfeel.
Fentimans nhas nrecently nmoved ninto nnew npremises nand nhas nas na nresult nthe
ncapacity nto nproduce n40 ntimes nthe nflavors nthat nit ncould nbefore nand nthe nworkforce
nhas ngrown nto n50 nand nis nforecast nto ngrow nto n70 nover nthe nnext n5 nyears. nThe
ncompany ninvests nheavily nin ninnovation nand nhas na nsmall nteam nworking nfull-time
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non ndevising nnew nunusual nflavors nand nhas nalso nspent n£250,000 non na nnew nIT
nsystem nto nensure nthat nthe ncompany’s nsystems nare ntotally nup nto ndate.

3.9. nProcurement
The nprocurement nin nvalue nchain ndenotes nthe nprocesses ninvolved nin npurchasing
nthe ninputs nthat nmay nrange nfrom nequipment, nmachinery, nraw nmaterial, nsupplies,
nraw nmaterial nand nother nitems nnecessary nfor nproducing nthe nfinished nproduct. nDue
nto nits nlinkage nwith nmultiple nvalue nchain nactivities, nFentimans nshould ncarefully
nconsider nits nprocurement nactivities nto noptimize nthe ninbound, noperational nand
noutbound nvalue nchain.

In nconclusion, nin norder nto ncreate na ncompetitive nadvantage nFentiman’s

noutsourced nthe nproduction nprocess nand ntherefore nallows nfocusing non noutbond
nlogistic, nmarketing nmainly nthrough nPR nand nafter nsales-service nto ncreate nvalue
nfor nthe ncompany n(margin). nParticularly ntechnology ndepartment n(on-site nflavor
ntesting nlabs, nE-marketing nactivities) nis none nof nthe nmajor nstrengths nand nsource
nof ncompetitive nadvantage.

4. nThe nfit nof nthe nJapanese nmarket nopportunity nwith nFentimans’ nmission
n and ncapabilities nand nany nfurther nresearch nrequired nprior nto nlaunch
In nthis nsection nJapan’s nmarket nattractiveness nrelating nto nFentiman’s ncapabilities
nis nevaluated. nAlthough nsome nrisks naccording nthe ncarbonates nmarket nare nevident,
nrisks nin ngeneral nare ncomparably nlow nand nentering nJapan nprovides nFentiman’s
nthe nopportunity nto nengage nin nan nAsian nmarket nin norder nto ncreate nknowledge nfor
nfuture nactions nin nthe nPacific nRim nregion. nAlthough nshowing nthe nlongest
ndistance ncompared nwith nthe nother nmarkets nscreened n(increasing nexporting ncosts),
nbut nsome nof nFentimans’s nproducts nhave nbeen nimported nby nsmall ncompanies ninto
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nhigh nend noff npremise nlocations nwhich nmight nreduce nthe nrisks nand nefforts nfor
nFentimans.
Because nof nJapan nheavily ndepend non nimports nfor ntheir nfood nand ndink, nso nthis nis
na ngood nbusiness nopportunity nfor nthose nwho nare nin ndrink nindustry. nThe ncountry’s
nself-sufficiency nrate nhas ndeclined nto n39% nacross nfood ngroups. nAs na nresult,
nmaking nthe nindustry na nviable nand nprofitable nbusiness nopportunity nfor nthose nwho
nwant nto nintroduce nnew ndrink nproducts nin nthe nmarket. nThey nare nwilling nto nadapt
ntheir nproducts nto nJapanese nmarket nneeds. nAs nmentioned nabove, nthe nconsumption
ntrend nin nJapan nhas nchanged na nlot, nthey nare nlikely nto nchoose nWestern nhabits
nwhen nit ncomes nto ndrinking nconsumption. nBesides, nFentimans nhas nbeen nmaking
nnatural nbotanical ndrinks nfor nover n110 nyears nand nusing na ntraditional nprocess nand
nfine.

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