Below are links to additional articles by Per Knudsen on doing business in Japan.
Merger and Acquisition Activity in Japan is Accelerating
(in Danish) This article summarises recent M&A activity involving foreign purchases of such prime Japanese assets as financial institutions, golf courses, real estate, retail outlets, and pharmaceutical companies. It concludes that there are attractive business opportunities for Danish and other foreign companies in the fields of health care, home care products for the elderly, home furnishings, insurance, foodstuffs, and others.
Global Challenges in 2007 This article (Tokyo American Club magazine, Jan. 2007) discusses today's unique challenges facing global firms and business networks.
The Japan That Can Frustrate This article (Tokyo American Club magazine, 2006) relates a few of the cultural quandaries a foreign executive may find himself in when dealing with the Japanese.
As the second-largest market in the world, Japan offers large-scale opportunities and strategic benefits to European, U.S., South African, and other countries’ firms and organisations.
As an expensive, highly competitive, highly complex and not yet fully open market, Japan remains a challenging place to do business.
Achieving success requires commitment and quality. A foreign company must be committed to taking a long-term approach to entering the market and building market presence. A company with high-quality, competitive products that is willing to undertake the sizeable investment of initial market entry in Japan can achieve a respectable market share with attractive profit levels.
Reasons why companies should plan to establish a presence in Japan include: 1) to gather information on Japanese competition and technology, 2) to develop sales and distribution routes for Japan’s large market, and 3) to compete with the Japanese in their own home territory, thereby ultimately enhancing competitiveness and market share back in your own country.
Additional reasons are 4) to reach the Asia-Pacific market through, for instance, Japan’s Official Development Assistance programme, which has grown to become the world’s largest, and 5) to gain experience responding to the highly exacting standards of Japanese customers in order to support a worldwide quality assurance programme.
In order to succeed in Japan, companies must plan to develop 1) financial and managerial capabilities as well as competent, Japanese-speaking staff, 2) modification and/or localization of products to suit the special requirements of Japanese customers, including translation of technical manuals and sales literature, 3) a long-term view towards maximising market share at a reasonable profit, and 4) careful monitoring of Japanese demand, distribution, competition, and the government.
While group-oriented, conformist buying habits in Japan are prominent, more-fragmented buying habits are emerging among a new generation of more individualistic end-consumers and buyers in the wholesale markets. Reflecting this, Japan’s complex distribution system is now changing dramatically.
Although much is made of “internationalisation,” Japan remains a highly homogeneous society, and business practices are characterised by long-standing, close-knit relations among individuals and firms.
Regulatory and local business practices reflect systems designed for indigenous needs with little or no consideration given to potential participation by foreign firms. Even for Japanese business people, it takes time to develop relationships and become an “insider.” For a non-Japanese, the task is formidable, but not impossible!