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Pestel analysis, an example of a country - Japan

Japan is a country in Southeast Asia that lies between the Sea of Japan and the Pacific Ocean. It is also in eastern Korea, China and Russia. Japan is an archipelago that includes 6,852 islands. In this article, we will establish the PESTEL analysis of this country.

Pestel analysis, an example of a country - Japan

Credit Photo : Matteo Colombo / Getty Images

This study provides a better understanding of the external environment of a company or, in this case, of a country. We will approach the political, economic, sociological, technological, ecological and finally legal fields.




Politically, Japan is a constitutional-type monarchy, and the head of state is called the Emperor. While he does not have all the powers, he nevertheless has a very strong symbolic value. Indeed, it is the symbol of the unity of the people and the inhabitants are very attached to these values. The executive power is dedicated to the Prime Minister and the cabinet. They take care of all day-to-day affairs relating to the state as a whole.

It should also be noted that Tokyo is the capital of the country and that it has very powerful neighbours politically speaking, such as Russia, China and Korea. The political environment is rather stable. Japan maintains very close relations with the United States, in particular, and has managed over time to forge equally strong relations with countries such as India, the United Kingdom, Australia and France. It is indeed very important in our times to have a certain stability in the political field, an area that is also directly linked to the economic and commercial environment. Many transactions take place online every day between countries, and when all goes well, businesses are better, and customers are happier.



In 2021, Japan was the third-largest economy in the world. With a GDP approaching $5 billion, it is also the second-largest economy in all of Asia. Note also that the country is a member of the G20, G7, but also APEC and ASEAN.
In addition, for several years, it has had an automobile industry that carries considerable weight in the sector at the international level. Indeed, the country is home to manufacturers like Suzuki, Yamaha and Toyota, which can be found in almost every country in the world. Note also that with regard to taxes, the country has four types in the professional field: corporate tax, with a rate of 23.2%, increased to 20%. There is also the tax on residents of companies, on companies and the special local tax on companies.


Sociologically speaking, in 2021, Japan was the eleventh most populous country in the world, with 126.2 million inhabitants. The country wishes in the coming years to welcome more immigrants, to promote the exercise of certain professions. The main language is Japanese, which is spoken by almost 99% of the population. The two religions most commonly found among the locals are Buddhism and Shintoism. In addition, there has been the ageing of the population for several years as well as a clear decline in the birth rate. The life expectancy for men is 81 years and 87 years for women. Asian consumers are very fond of luxury goods. Products that are gradually finding a new appeal in the archipelago.


Japan is a very technologically advanced country globally. It is a country that is very creative and which develops multiple innovations frequently and in all fields of activity. In particular, with regard to robotics, the country is particularly advanced as well as in technologies which have emerged in France and in other countries much later. This is particularly the case with contactless payment, which existed in Japan long before its arrival in France.



Japan has always been regarded as a country concerned with the well-being of the environment and the planet. However, it is also a country where the risk of natural disasters is very high, which tends to frighten would-be tourists. Tsunamis, earthquakes, or whatever, it takes a lot of investment to rebuild everything afterwards.
Japan wants to manage waste better in the future and build ever more eco-responsible buildings.


At the legal level, the country has its own laws regarding trade and competition. As in France, employees have rights such as maternity leave or days off, as well as health, unemployment and work insurance.
Finally, it should be noted that the country's legal system is based on principles specific to civil law. In criminal cases, the procedures are the same across the country. There are summary conviction courts, district courts, courts related to family matters, high courts and the Supreme Court of Japan. The death penalty is still present in the territory.


Japan is, therefore, a country that is quite small but articulated around several main axes. The Japanese are far ahead in terms of technology but are affected by more serious natural disasters than others, which has a major impact on the development of tourism. Finally, this is a country that has made a lot of progress in recent years, especially with regard to relations with its neighbours, and other countries of the world, which are more peaceful today.