JFTC Essay Competition

Summaries of the Award-Winning Essays of JFTC Essay Competition 2016

The Prize for Excellence

Spelling out Value Propositions to Foreign Markets:
a Recipe for Japanese Firms to Move up the Value Chain in International Trade

Mr. Xiaochen Su (U.S.A.)

In recent years, the competitiveness of Japanese firms in global trade has seen an unfortunate trend of relative decline. This trend is largely due to the emergence of resourceful foreign competitors that are capable of offering better prices for the same imports that Japan craves, and are able to produce products and services that are of equally high-quality but less expensive than those of Japanese firms. This essay seeks to reemphasize the fact that, despite the emergence of capable foreign competitors, Japanese corporations still have distinctive advantages in global trade.

The key for fully leveraging these advantages is how Japanese firms can create comprehensive “value propositions” for foreign producers and consumers, addressing their long-term needs in sustainable partnerships. To do so, Japanese firms, on one hand, need to fundamentally adjust their approaches in establishing consistently visible foreign presence, and on the other hand, aggressively push the Japanese government and society at large for support in tackling foreign markets as a collective. The essay includes some hopeful forecasts on the comparative position of corporate Japan in future global trade environments if suggestions on “value propositions” are taken.

The Prize for Excellence

Japan: Not lost but RESET

Ms. Jiaqi Zhang (Singapore)

As an economy advances, it will inevitably confront an aging population. This problem is not unique to Japan, but is also present in some degree in other countries. Undeniably though, Japan will encounter the impact of an aging population earlier than most. Spinning this in a positive light, how Japan copes with an aging population can become the model for others to follow, and the technologies and products which Japan develops now will be the technologies that other aging economies will need and buy in the future.

To achieve that state, Japan needs preparations. First by developing the technologies that can reduce the impact of an aging workforce, next by thinking of ways to reach out to foreign markets. RESET is a framework made up of 3 proposals which could bring this to fruition.

The first aspect of RESET is to Redefine Education as Service (RES). International students not only contribute to domestic consumption during their course of study, but more importantly, serve as potential labour source upon graduation.

The second aspect is for companies to think of Ecosystem Strategic Export (ESE). Ecosystems create competiveness more so than pure products; it is far easier for competitors to imitate or enhance a product, than to recreate whole ecosystems. Moreover, using ecosystem strategies forces companies have to look beyond the Galapagos and reflect on their position in relation to other players.

Finally RESET encourages the implementation of Self-Enabling Technology (SET) which refers to technologies that help customers help themselves. Just as frequent seismic activities have progressed Japan’s earthquake engineering; Japan’s population circumstances could hopefully help proliferate and promote development of self-enabling technology, not just in services but also in products.

Although the 3 proposals are seemingly different approaches, they are threaded by a uniting theme to bring the World to Japan and Japan to the World. Let the next decade not be lost, but a chance for resetting Japan’s path.

The Prize for Excellence

Japanese Companies towards Global Trades in Service Sector

Mr. Sok Heng Lay (Cambodia)

In the last two decades, Japan has fallen into a stagnation that it is struggling to get out of. The country is facing challenges such as shrinking population due to a low birth rate, as well as the effects of globalization, which slow down Japanese exports to the global markets. These challenges have to date prevented Japan from getting out of its deflationary spiral. But through efforts in seeking new initiatives to revitalize the economy, the Japanese service sector has gained significant attention recently and is now considered as one of the key drivers for sustainable economic growth in Japan.

One of Japan's ambitions is to become the world leader in the service sector. The Abenomics ‘Japan Revitalization Strategy’ aims to increase service trades in health care sector, information technology and intellectual property. Although the service sector accounts for 75% of the Japanese GDP, leading to a rise in demand and improvements in technology, service trading is relatively low. This is due to the fact that productivity in the service sector is still far less than that of the manufacturing sector. Furthermore, productivity in the service sector remains low compared to other developed countries such as the United States. Therefore, turning the Abenomics plans into reality relies heavily on how well Japanese companies perform. In this regard, the question is posed: what sorts of synergies do Japanese companies need to adopt in order to improve service trade in the current global competitive markets?

Three critical factors - productivity, brand equity and marketing - are crucial for Japanese companies when it comes to succeeding in service trade amid the harsh winds of globalization. First, structural innovation and capable human capital are crucial components to boosting higher productivity in the service sector. Second, Japanese companies should reinforce ‘brand equity’ of their services to be as well-known as the brands of Japanese goods. And third, in respect of Japanese brand equity, Japanese companies should constantly strengthen their marketing strategies in order to maintain a unique market niche in the global markets. However, achieving dreams of being a market leader in the service sector requires participation from other stakeholders, as the commitment and motivation of each individual is crucial for building the new Japanese economy. While some other countries will soon face similar challenges, Japan could again set a very positive precedent for the world in terms of overcoming these challenges through innovation.

The Prize for Excellence


Mr. Long Bao Vuong (Viet Nam)

Global trade helps goods and services broadly exchanged and distributed around the world. Trading enables manufacturers and service providers to sell their goods and services more efficiently. Trading contributes to the growth of GDP, domestically and internationally. Trading is vital for a household, a country, and the entire world to thrive. Unfortunately, our global trade is slow moving for now and predicted to swing around 3% growth rate in the coming years. Talking about GDP, although the emerging economies like Myanmar, Côte d'Ivoire, Bhutan, Senegal, Mozambique, India, China, Vietnam, etc. are expected to grow at the rates of 6-8% per year in 2016 – 2021 (IMF World Economic Outlook, Apr-2016), the G8, the “locomotives” of world economy, seem to be “saturated” with marginal growth rates around 1-2%. Taking into account the fact that global trade makes up 55% - 60% (http://data.worldbank.org/indicator/NE.TRD.GNFS.ZS?end=2015&start=1960) of the world GDP nowadays, it is an alarming problem! We don’t want to see another economic recession.

Resolving this problem requires multi-participation by the governments, international institutions and organizations, and especially the business community in every country. In that background, what is the role of Japanese companies or how can they do to help promoting and enhancing global trade?

This paper reviews the role of Japanese companies, reflects the present world trade with principal facts and data, and suggests “3S’ to augment the role of Japanese companies in global trade”.

The Selection Committee Chair's Special Prize

“SHOSHA-as-a-SERVICE”: The SHOSHA of Tomorrow’s business model for tomorrow’s business environment

Mr. Baltazar Jr Sabado (Philippines)

The Japan Foreign Trade Council has 42 regular member companies in Japan as of March 2014 but are those companies ready for tomorrow’s changing business environment and landscape? Looking at the history of the SHOSHA, the SHOSHA of Yesterday uses a commodities trading business model which were more appropriate during the pre-globalization era while the SHOSHA of Today uses a solution trading business model which may no longer be appropriate tomorrow due to the credit crunch. However, to adapt to the future business environment, the SHOSHA of Today should evolve into the SHOSHA of Tomorrow.

The SHOSHA of Tomorrow is a service business enabler and will use a “SHOSHA-as-a-Service (SHaaS)” business model suited for tomorrow’s business environment. My concept of SHaaS model is that the SHOSHA of Tomorrow will provide SHaaS-Intellectual Property (SHaaS-IP) which is a business model focusing on trading the SHOSHA’s own intellectual property in business management, processes and operations while using its financial strength to provide SHaaS-Operational Expenditure (SHaaS-OE) which is a transaction model focusing on the cost of doing business on a subscription/usage service fee based on either a Base + Utility Service Fees or a purely Utility Service Fee.

Shifting to SHaaS may not be feasible for all SHOSHAs but in general, the SHOSHA can shift due to 3 major inherent factors; extensive market intelligence due to extensive footprints and presence around the world, cash to finance and pursue new business due to majority of their subsidiaries are banks and risk management capabilities due to the several markets they trade in and their years of experience.

The journey to SHaaS starts with the availability of funds which the SHOSHA can easily generate. The second is to create several strategically located “Center of Excellence (COE)” delivery centers to have a focused approach in providing business management processes and industry technical know-hows and a common “Global Knowledge Database (GKD)” to share their knowledge and experiences with each other. The third is the road to the market through “Proof-Of-Concepts (POC)” to allow their customers to test the business model first in a laboratory environment/controlled live business environment without taking risk.

To answer my question above, Yes, the SHOSHA of Tomorrow with the SHaaS business model coupled with their tactical strengths – business know-hows, market intelligence and capital resources – is ready to strategically plan their competitiveness and survival in the future business environment.