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According to the International Monetary Fund (2012), Japan’s Gross Domestic Per capita for 2011 was 34, 600 US dollars. This provides a high market for Estée Lauder Cosmetic Incorporation’s products in Japan.
Japan has a low unemployment rate of 4 percent and a low average inflation rate of 2.1 percent. Japan’s economy is exceedingly proficient and competitive in fields associated with international trade. Over the three past decades, Japan experienced a rapid economic growth (Karan, 2010). There is a high rate of investments by other foreign companies in the country thus providing a wider market for Estée Lauder Cosmetic Incorporation products. Japan is home to 68 of the 500 most developed companies in the world. Tokyo, the capital city, is the leading metropolitan economy in the world. With its aging and high income population, Estée Lauder Cosmetic Incorporation is assured of market for its products.
According to the CIA World Fact Book (2012), Japan is under a constitutional monarchy headed by a Prime minister. Customarily, the cabinet ministers rely on bureaucrats for policy schemes and legislature drafting. The cabinet ministers control the issuance of trade licenses, and authorize and controls business activity in the country. The function of government institutions in Japan’s economy has been reforming over the past years. The government freely permits all foreign exchange transactions to and from Japan. These foreign transactions also include the interests, transfers of profits and dividends, royalties and fees, repayment of principal and repatriation of capital. Formal sanctions on the allotment of foreign exchange and the majority of limitations on foreign investment have been eliminated (Karan, 2010). This presents Estée Lauder Cosmetic Incorporation with an opportunity to trade freely and effectively in the country.
As indicated by the International Monetary Fund (2012), Japan is highly
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