Pestel Analysis Japan

Japan was the leading country in Asia for a long time as it was the first in to get industrialized, whereas people were motivated to strengthen their country after the hardships that they have encountered after World War II. The citizens with the strong collectivism had the willingness to sacrifice themselves for the development of the country and company. Eventually Japan was able to develop itself as the second strongest country in the world. Japan is strong and influential in the world, but the impact is not like when it was in the 70s and 80s.

That can probably be because the alternation of generation was not successfully done. The main players of Japan’s success are retiring but the youngsters are not as motivated as the people back then.

Political

Structure: The Politics of Japan operated as a multi-party parliamentary representative democratic constitutional monarchy (CIA Factbook). However, the Emperor, defined as “a symbol of State and the unity of people”(Okudaira, 1993) has limited power and mostly ceremonial duties. The government is divided into 3 branches: the Executive, Legislative and Judicial. The Prime Minister is the head of government and the head of the Cabinet, which directs the executive branch.

Party in Power: Liberal Democratic Party (LDP) with Shinzo Abe serve as the current Prime Minister of Japan

Environmental

Geography and Climate: Four major islands (Hokkaido, Honshu, Shikoku and Kyushu) extending along the Asia Pacific coastline. Japan’s terrain is mostly rugged mountain (70-80%). (CIA Factbook) Climate varies from cool to warmer tropical from north to south.

Natural Disaster: Japan has a long history of intense earthquake and seismic activity with 10% of the world’s active volcanoes found in the country. Approximately 1500 earthquakes occur a year with magnitude 4-6 and minor tremors occurs on a daily basis. Undersea earthquakes also pose thread of tsunami to Japan’s

It will highly influence the Japanese economy as the nation will encounter a workforce crisis. As a result, Japanese economy will be highly depend on elder people since they are considered as wealthy people since the current generation will be just monthly income holders. Moreover, it will influence the Knowledge management of Japanese companies. If all the senior experienced workers retire at the same period of time, Japanese companies will face the immense lack of knowledge and the experience. To overcome this issue, Japanese government is considering four main solutions: - raising retirement age