Operational barriers are evident in every companies exporting procedure. Wallaby Wines as mentioned before is interested in exporting their high quality wine to Japan. Japan however has many barriers that affect productivity and the likelihood of success. Three additional main barriers include; import duties, government subsidies and quotas. With Japan having import duties on products coming in, Wallaby Wines will have to lower their production cost in order to compete with local Japanese wine. Japan’s import duties cause Wallaby Wine’s product to be more highly priced in comparison to local brands and thus will lessen the chance of sales. Therefore, this is an operational barrier and if Wallaby Wines are to overcome it, they must use economy …show more content…
This outlines that private parties are subjected to government interference such as subsidies, privileges, tariffs and regulations. Therefore, Wallaby Wines are subjected to subsidies provided by the Japanese government for Japanese businesses and companies. Similarly to the purpose import duties are implemented for, subsidies are also implemented for the same effects. Subsidies are executed in order to make it easier and cheaper for local companies to make the product. Wallaby Wines will be impacted by these as local Japanese companies will be making product sponsored by the government – thus more sales and better for the Japanese economy. Therefore, Wallaby Wines have encountered another operations barrier. The Japanese government also allows for quotas on certain products and from the research found, it is possible for a limit on the amount of imported wine. This is another operational barrier however can be resolved. Wallaby Wines currently is a small business meaning that it will easily fit the quota however further company growth may cause some problems in exporting (AusTrade, 2016, Doing business in Japan) (Japan Tariff Association, …show more content…
If 0.013 JPY equals 1 Australian dollar, Wallaby Wines should sell their products in 750mL (due to being the most popular size) for exactly 770 Japanese Yen to equal the approximate 10 Australian dollars. Imported wines hold 48 per cent of this price range with fierce competition between France, Italy, Spain (with the influence of the strong yen against the Euro), Chile, and the US. These wines are mainly distributed through large-scale retail outlets such as supermarket chains and ‘casual’ food service outlets. The opportunity for Wallaby Wines to import into retail outlets in Japan and start their journey internationally is very welcoming. The ongoing deflationary environment in Japan is influencing consumers to purchase lower priced products. The export of Australian sparkling wine to Japan has shown consistent growth and reached 134,700 cases in 2012 - an 11.7 per cent per cent increase from 2011 (WANDS, 2013). The super-premium wine segment (more than JPY10,000/A$100 retail price per bottle) has increased in volume to 61,000 cases annually, 29.8 per cent more than 2011. The increase in volume further displays the growing opportunity in the Japanese Wine industry (Japanese Wine Facts,