PESTEL Analysis of Japan would cover political, economic, social, technological, environmental, and legal factors that could affect the country growth and development.
Japan is an island located in Pacific Ocean in the east of China, North Korea, South Korea and Russia while Taiwan is in its South. This country made tremendous advancement in technology and the products of this country are well known across the world. This country became the target of nuclear bomb attack during Second World War. After the war, the government started taking interest in different technological development and now it is superpower in the science and technology and almost all major brands of the vehicles and machinery are established here.
Political Factors
Although the emperor is the head of the state but he has minimal powers and there is constitutional supremacy in the country. The parliament is elected by the people in the general election and prime minster is elected from the parliament. Japan has good relations will all big and small countries of the world and they have strong business, corporate and trading relationships with other countries. Japan is member of United Nations and non permanent member of Security Council.
Japan is big economic power and is member of G8 and Asia pacific Economic Cooperation and has good relations with ASEAN. Japan has some disputes with China and Taiwan over Senkaku Islands because of the control of marine and natural resources. The dispute with Russia is occurred due to Kuril Island and with South Korea over the issue of Liancourt Rocks.
Economic Factors
The economy of Japan is strong and now it is third largest economy across the world after USA and China. Currency of Japan is Yen and it has the GDP of $5.073 trillion in 2009 and the GDP growth rate is 0.4%. The GDP per capita is $39,573 and inflation is -1.3%. Although there is poverty in the country and the total population below the poverty line is 13.5%. There is unemployment in the country, which is about 5.6% and FDI stock is about $205.4 billion and the exports of the country are $516.3 billion and imports are about $490.6 billion.
The standard of the products of the country is high and there is no other country, which can reach to half of the quality of its products. The country has focused on its education system and developed the technical education, which has contributed in the development of the country. The strength of the economy of Japan is higher level of living, higher human development index, educated workforce, low corruption, low homicide rate, and increasing the urbanization.
Social Factors
The family system in Japan is patriarchal and monogamous and the whole family lives together. The children get married and they lived with their parent after their marriage. There is no particular religion in the country but the people have religious freedom. The population adopts the religions of Christianity, Islam and Sikhism. If you check their education system, then you will find that elementary and secondary education is compulsory and the students can pursue their education in the upper grades. There is huge number of public schools and the standard of education is higher and private education is given at university level. The literacy rate of the country is 99%, which is highly remarkable.
Japan is their official language but English is also taught in the schools. The health facilities are also provided to the citizen and there are various hospitals in which healthcare services, prenatal care and control of infectious diseases are provided to the patients. The government has started human health insurance programs and patients are allowed to get the treatment of their disease from their selected physicians and they have to pay 30% of total expenses while government pays the remaining amount of 70% of the total expenses incurred on any patient.
Technological Factors
There is great revolution in the technological sector and 27.7 million people have broadband lines. 78.2% people have internet connections and it has broadband over power line and wireless broadband connections. In the telecommunication sector, it has introduced the smart phones with latest technology and has 3G competitions among its mobile operators and they have the triple play services. The country has done remarkable progress in automation and most of its offices like restaurants, hospitals, airports and factories are automated and various other facilities are provided there. It is well known for its robotic technology and robots are found in different industries. Various people do their shopping and buy tickets for train, plane and buy books online.
Environmental Factors
Japan is comprised of about three thousand islands and most of the land is mountainous, forested, and not suitable for agricultural, residential or industrial use. The country is high humidity and has wide range of latitude, and has different climates. There are various most active volcanoes in the country, which are erupted from time to time. The earthquakes are appeared abundantly and one study shows that 1500 earthquakes are recorded in a year. The government has adopted the effective environmental policy and the regulations are strict, which were formed after the environmental disasters in 1950 and 1960. The environmental policy creates the balance between economic development and environmental protection.
Legal Factors
The country has implemented their corporate law on the basis of Corporations Code and it provides legal formality for the formation of different types of companies in the country. The government enacted the trademark law through Trademark Act of 1959 and the registered trademarks can set up the trademark rights. If a person wants to get the registration for trademark, then he has to file an application over the prior use of same trademark.
Labor laws are enforced and operating in Japan as the conditions of the employments should be mentioned in the employment agreement or in the supplementary rules including minimum wages law, working hours, prohibiting discrimination article and leaves rules. Consumer contract act is also enforced from 12 March 2000 and it regulates the unfair consumer contract and also the unfair commercial practices. The terms and conditions of the contract are enforced under the provision of relevant commercial practices, which are present in the constitution.