Japan business success: How to succeed in Japan?

How to break into Japan’s markets and become profitable?




Japan business success factors – People:

People come first in this list, and in your business: in Japan and elsewhere. People are key the key to your success. Customers are people, employees are people, your business partners, your suppliers, Government regulators, your competitors are people. In Japan these are Japanese people – and they may think differently than you do. Sometimes more different than you think. So you need to respect their customs, and work humbly to gain their respect. If you don’t do that, you’ll find that nobody loves you, your best employees leave you, and nobody buys your products – at least not as many as you need to sell to succeed in Japan. In the worst case you will lose Government licenses you need to do business in Japan. That also has happened to quite a number of foreign companies who did not respect the rules of the Japanese Government. If you lose a Government license in Japan that you need for your business, then you will have no choice other than pack up and leave. You will not have been the first foreign company to do so.

Japan business success factors – usually there is no easy, quick, cheap way to succeed in Japan:

You have no time – need results yesterday? You want to go-to-market yesterday without market research and planning? You are convinced that your products sell themselves? Maybe it’s better you look at other markets. There are very few examples of companies which succeed overnight in Japan. There are exceptions to this rule however in case you have a spectacular product with a true value proposition to real customer needs in Japan and with no competition. But in that case, Japanese companies have probably already contacted you and offered you free trips to Japan (some of our clients are in this lucky position). So a rule of thumb is, that if you or your company have to pay for your own airtickets to Japan, you probably have to make a lot of effort and investments in order to build a business in Japan.

Japan business success factors – do your homework, make sure you understand your future customers, the competitors and the market landscape:

Companies which succeed in Japan go to extraordinary lengths to understand the landscape they are about to enter. We can assure you that it’s much better you know your competitors beforehand and work out a strategy how to deal with them, rather than finding out that a few weeks after you proudly open each of your new shops in Japan, a Japanese company you have never heard about before, selling the same products as you do opens a shop accross the road from your new shop offering similar products at much lower prices, and keeps open until midnight, while your shops close at 6pm. Sounds incredible? That’s exactly what drove a major European retailer out of Japan.

Japan business success factors – Make sure you invest what it needs:

What you need to invest in Japan to succeed needs to be decided by the market conditions in Japan – not back home without knowledge of Japan. If you have a bleeding edge technology product without any competition providing true value and solving a real customer problem then you may not need to invest much in order to succeed. However, the more established the market landscape you wish to enter, and the more commoditized your product, the more you will need to invest to take market share from incumbent Japanese players. Many foreign companies have failed in Japan, because they did not invest the amounts necessary.

Japan business success factors – your products and services:

You will know your products best, much better than we do. However, if you want to sell your products in Japan, they must provide a real value to satisfy real needs of Japanese customers at the right price. A range of "global products" which is a huge success around the world and which has made your company and your brand rich and famous surprisingly may not help you to succeed in Japan. You may need to adapt your global products to Japanese market needs. Sounds obvious? There are foreign companies which have failed in Japan and have lost on the order of US$ 10 billion for going wrong on this "simple" point.

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