5 Mistakes Foreign Companies Frequently Make When Entering The Japanese Market

Being observant and aware of mistakes other companies made when entering a new market can help you avoid those same mistakes. Learn from the actions and missteps of those that tried before you.

Here are five of the most common mistakes companies have made when trying to enter Japan.

Not Employing a Bicultural Country Manager

When you enter the Japanese market, it is always better to have someone on the payroll who understands both Japanese culture and business. Lacking a country manager, or having one who doesn’t understand the local business culture, no matter how clever they are, will leave you without effective means of communicating.

Your country manager needs to understand how the Japanese think. Companies without a bicultural manager fail when they try to expand into Japan. A crucial part of your expansion plans needs to be understanding the local business culture as well as local consumer behavior.

Using Previously Successful, Unchanged Tactics

Another big mistake to avoid when taking your business to Japan is to treat Japan like you’ve treated other countries. You can find many globally successful organizations that have failed or withdrew from Japan because they insisted on keeping management rules and product designs the same as those used in other countries.

Some companies believe that the success they’ve found in their home market can be replicated in Japan without making any strategy adjustments. The worst thing you can do is bring your company as-is to Japan. Companies that have tried to do so typically withdraw from Japan in less than five years.

Leaving Major Decisions to Company HQ

Avoid thinking, “We’ll let HQ take care of that.” How sure are you that your company headquarters will understand Japanese business? How sure are you that your company HQ will understand Japanese consumer trends? Don’t leave important decisions solely in the hands of the head office, and never neglect the suggestions from your Japanese advisors.

Not Investing into Japan Studies

Most foreign companies that have succeeded in Japan made substantial investments into the country. They invested in market research, strategy development, business planning and so on. Some companies have invested up to $30 billion in research.

Success in Japan is never quick, easy or cheap; it is not the place to make a quick buck. You’ll need to properly invest and make smart decisions to be able to compete in Japan.

Hesitating to Join Business Associations

A key element worth knowing about Japanese business culture is the business associations. For example, consumer electronics companies like Sony, Toshiba and Sharp are all part of an association that shares and exchanges information. Although these companies compete against each other, they also shake hands and work together to better develop their industry as a whole. You’re company would do well to associate with such industry movers. You need to show them that your business entering the market is not a threat to them, but, rather, a benefit to those companies and their industry.