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01. Win big - or lose big. Business in Japan. Why can it be so difficult?
Japan was never a western colony
... and that is not a coincidence, but largely due to Japanese people's strong will and traditional abilities. (Thailand is another Asian country which was never a western colony...)
Some - but by far not all - western companies find it difficult to succeed in Japan. Reasons include:
- Japanese customers can be very demanding, and often have quit different tastes and needs than Western customers. Therefore in many cases western companies must redesign or redevelop products in order to succeed with Japanese customers. Examples where this is the case range from baby napkins, to tooth brushes, cars and mobile phones.
- Because of Japan's size, substantial investments are necessary, and therefore the inherent risks are also large: you either win big, or lose big.
- Japan has many very strong local companies. As an example, eBay lost in Japan against local competition and withdrew from Japan. Japanese companies also will not usually welcome a new competitor, but develop strategies to compete hard against new entrants. You must be prepared for such competition with very thorough market research and strategy development. If you do not thoroughly understand your competition in Japan, you have little chance to win. In order to win in Japan you must understand and must be prepared and able and willing to compete with local competition.
- Management methods and the actual managers at headquarters in US and EU have certainly won many achievements in the US and Europe and elsewhere. In many cases, however, Western managers and Western management teams are ill prepared to succeed in Japan. In many cases, drastic changes in thinking and management methods and personell changes at headquarters would be necessary to succeed in Japan. However, there are not many Western companies, which act on this knowledge.
You need more information?
- JapanStrategy.com - a website about how to succeed in Japan
- JapanStrategy-blog - a blog about how to succeed, and expand business in Japan
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