1) Introduction

Company
Company name: The name of MNC company is Japan Tobacco International, it’s a global
tobacco company.
Operation start: Japan Tobacco International(JTI) started its operation in 1999. JTI has its
operations in 130 countries.
Products: JTI produces cigarettes, cigars, roll-your-own tobacco, snus, pipe tobacco and cigars.

Market
Geographic location: I have chosen United Kingdom as the market of Japan Tobacco
International. So, JTI’s market is in UK in European region.
History: Before becoming subsidiary company of Japan Tobacco International Gallaher Group
was founded in 1857 by Tom Gallaher. Gallaher limited became subsidiary company of Japan
Tobacco International in 2007.

2) Market Analysis

ii) Political environment:

Political standing: The political ideology of United Kingdom is individualism. Where a citizen
of United Kingdom has his or her own economic and political freedom. Though United
Kingdom’s political system is constitutional monarchy, but United Kingdom is fully democratic
country. (according to Democracy Index 2019). So, it can be said that the political system of
UK is democracy.
Cost: According to Corruption Perceptions Index 2019, the CPI score of United Kingdom is
77, which means UK is less corrupted country. But still in UK corruption exists. For this
corruption, the cost of doing business for Japan Tobacco International in UK can increase.
Risk: According to Country Risk Tier 2019, United Kingdom falls in CTR-1, which means the
political risk is very low. As in UK political risk is low so there is lower political instability.
Which means for JTI’s market UK is suitable market for doing business.
Opportunity: As UK is democratic country, so the social condition is business friendly.
Moreover, property rights regime is well. And this is very good opportunity for JTI for doing
business in UK.
iii) Economic environment:
Human Development Index(HDI) Life Expectancy Literacy rate
Rate
0.922 81.40 99%

Economic standing: United Kingdom economic system is mixed economy. (according to,
https://www.globaltenders.com/economy-united-kingdom.htm) There are some important things
which determines the economic development of United Kingdom those are given below:

Cost: As UK is a mixed economy country, so government control most of the business sectors.
Because of government’s interference there have also many regulation requirements that may
increase the cost of Japan Tobacco International. (JTI)
Risk: According to Country Risk Tier 2019, United Kingdom falls in CTR-1, which means the
economic risk is very low. Which means Japan Tobacco International’s UK market is suitable
market for doing business.
Opportunity: As UK is mixed economy country, so if private business factors face any
economic crisis government help to reduce the loss of private business sectors. And this is a
benefit of JTI for doing business in UK.

iv) Legal environment:

Legal standing: The legal system of UK is common law. (according to,
https://www.cilex.org.uk/about_cilex/about-cilex-lawyers/what-cilex-lawyers-do/the-uk-legal-system)
Common law was developed in UK.
Cost: In UK’s legal system is common law, there is a law called taxation law. So, because of
taxation law business companies have to pay tax to government. Which can increase cost of
JTI’s for operating business in UK.
Risk: In the case bankruptcy, the UK’s legal system the common law doesn’t give importance
on liquidation of a business organization. Which may increase the chance of bankruptcy. So, for
this reason JTI may face risk for conducting its business in UK.
Opportunity: The UK’s legal system common law ensures a good security system on the
property of the country. So JTI will get good property rights regime for operating business in
UK.
i) Globalization of market and globalization of production:
Globalization of market: JTI’s subsidiary company Gallaher Limited conducing it’s business in
UK and Europe’s other countries. But it is also conducting smaller operations in Central Asia,
Africa and Middle East. So, it can be said that JTI’s subsidiary company Gallaher Limited has its
market globally.
Globalization of production: As UK is developed country, so UK’s technology is also very
much advance. Workers are also educated and much skillful. So, by using UK’s advance
technology and efficient workers JTI’s subsidiary company Gallaher Limited can increase its
production. Therefore, it can be said that instead of using Japan’s workers and technology JTI is
using UK’s workers and technology for its production.
Hence, it can be said that JTI in UK is following both orientations.

v) Cultural environment:
Culture: On the UK culture there is impact of combined nation’s history. Besides, UK is also
known as multicultural country.
Values: The values of UK are given below:
 Democracy
 Rule of law
 Respect and Tolerance
 Individual Liberty
(according to, https://www.totalpeople.co.uk/british-values?
fbclid=IwAR2w0C6fxTdB6FCrebgTuDriFRJ6AfTKiJ2Naqn52M_H56jhKjmDpv20k3E)

Norms: Basically, UK’s norms fall under folkways. Because UK’s people lead their life with
good social manner.
Cultural determinates
Language: The spoken & official language of UK is English. Unspoken language is British sign
language.
Religion: UK’s main religion is Christianity.
Education: As earlier we see that UK’s literacy rate is 99%. Education system is handled by UK
government.
Social Structure: UK’s culture is individualistic, which means social structure of UK is
individual. (according to, https://en.wikipedia.org/wiki/Individualistic_culture )
Political Philosophy: The political philosophy of UK is libertarianism. (according to,
https://en.m.wikipedia.org/wiki/Libertarianism_in_the_United_Kingdom?
fbclid=IwAR0rrYxBlilq50QL4JCieJqZk5zKuvZnlRh6ZFGgEWaueLdXqw0DTfap2JQ)
Economic Philosophy: The economic philosophy of UK is capitalism. (according to,
https://www.bbc.co.uk/news/amp/business-50562518?
fbclid=IwAR24PKIDRGyvJqZlDViOg0Eamwrc69mGT9KGMwwGZdKD2xzKbkLrsDDPxVs)
Hofstede Dimension of UK
Power Distance Uncertainty Individualism Masculinity
Avoidance
35 35 89 66

(according to,https://www.researchgate.net/figure/List-of-relevant-Hofstede-Dimension-Scores-for-
each-dimension-by-country-Hofstede-and_tbl2_242388827)

Cost & Risk: The culture of UK and Japan is totally different; which can create cultural clash.
Because of cultural clash mismanagement and miscomputation can take while working together.
Masculinity in UK is moderate, which means in UK there are specific jobs for men and women.
Therefore, for these reasons both cost and risk can increase for JTI in UK.
Opportunity: Power distance and uncertainty avoidance of UK is less. Which means in UK the
chance of inequality is less and people love to take risk. And individualism is very high, which
means people have freedom and innovation of anything can possible in UK. Hence, these can
create opportunity for JTI in UK.

vi) Conclusion
As I have chosen UK as a market of JTI company, I think UK is suitable country for JTI to
conduct business. Besides, as earlier we know that UK’s political and economic risk is very low.
Which means in UK political instability is low and the country is economically much developed.
Moreover, UK’s legal system gives security of the property. On the other hand, UK is less
corrupted country which means cost of doing business is also less. And these things can increase
the overall attractiveness for doing business in a country. So, it can be said that UK is the right
choice for JTI to conduct its business.