Doing business in Japan information
by Venture Japan
We tried JETRO's Japanese services when looking for a Japanese system integrator "SI" (we were actually looking for "system integrators") for a software vendor client. It was an interesting experience...
JETRO, the Japan External Trade Organization, is a government funded agency with offices around the globe primarily intended to promote the benefits of doing business in Japan to foreign companies. JETRO also has offices in Japan that are intended to provide support to foreign companies doing business here. One of the benefits they can offer is the use of free office space at one of their Invest Japan Business Support Centers.
The objective for our JETRO meeting was simple. One of our clients is a software company that has been very successful in the US and Europe but not so successful in Japan; they engaged us to turnaround their Japanese business. We know from experience of the Japanese software market that (despite the huge amount of software product information available on the Internet) a Japanese manager looking for a new software solution is unlikely to personally research the available software products. Instead he will ask his existing system integrator (or if he has never had cause to hire one, then the system integrator one of his colleagues uses) for a recommendation.
Our obvious strategy was to partner with several Japanese system integrators to address the broad spectrum of the Japanese software market we were interested in. We call this accessing Japan's "hidden" market because it is where most of the large business in Japan is to be found but it can often only be successfully addressed through insider information. This is another reason why a strong network of well informed personal contacts is so important in the Japanese market.
We had already analyzed the Japanese system integration market and knew exactly which system integrators we needed to partner with to address the various levels (small company, mid-size corporation, large corporation, enterprise etc.) of Japan's software market. We could have just cold-called the system integrators directly (and despite what many "Japanese business experts" will tell you, cold-calling can be successful) but expected that introductions from JETRO would help us be more successful more quickly.
Unfortunately our experience with JETRO was not a success; in fact it left us with an unpleasant aftertaste and, had we been executives fresh in from the US or Europe, it may well have caused us to avoid direct entry into Japan in preference for a distributor.
The person who met with us clearly did not understand the software industry and neither did he understand what a system integrator was until we informed him. Worse still, he clearly had no understanding of foreign business dynamics and expectations. What he did understand and told us several times was that most foreign companies starting business in Japan do so either by using distributors or by establishing a kabushiki kaisha. He was very pleasant, almost condescending, and after having told us nothing except that we might find something useful on the JETRO web-site, asked us if we could fill out a questionnaire commenting on our degree of satisfaction! We went off to start cold-calling system integrators and working through other contacts to get the results we needed and we suppose he went back to reading his newspaper until the next "batch" arrived!
Many clients come to us after having met with JETRO and tell us that they were not impressed with JETRO's services. The most common complaint is the experience that we had with JETRO - an absence of any sense of urgency. In our analysis JETRO's weakness is the same as that of most law firms and auditors; their success is totally independent of your's.
There is no question that JETRO can be of great use and they do excellent work to attract larger corporations to Japan. If you are an executive of a smaller company thinking of starting business in Japan then our advice is to use JETRO for their free office space and the mass of free market data they can provide.
Whatever the results of a visit to JETRO, do not give up or get frustrated. Just like looking for gold in Australia you need to do a lot of digging around the Japanese market to get to the good stuff!
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