Japanese business networking power

Japanese business networking power

We noted in the previous section about the first 3 months of starting business in Japan and entering the Japanese market, that those first 3 months in Japan present a low risk and in many ways one time only opportunity. This is the time to accumulate knowledge before making the key decisions of if, how and to what extent, your company enters the Japanese market. The decisions made in those first 3 months starting business in Japan, are likely to decide your company’s success in the Japanese market for at least the first 3 years of its Japanese business.

Based on more than two decades of managing and observing Japanese businesses, my experience is that the best Japanese market entry decisions build on: knowledge of Japanese business, understanding of Japan’s unique business culture, and sensitivity to the Japanese market’s expectations. Having talked with many foreign executives who succeeded in Japan, I suggest that a good strategy to follow in the first 3 months is:

  • Network, network, network!
  • Decide the Japanese market entry channel, whether agent, distributor, direct sales office, or a mix.
  • Negotiate business partnerships.
  • Hire key bilingual staff, especially your executive assistant.
  • Educate and integrate the Japanese partners and key staff into your corporate culture.

In your first month in Japan, whether operating from a JETRO or O-BIC free office space, your hotel room, your accounting firm’s Japanese office, your law firm’s Japanese office, or wherever you work from, networking and information gathering are your priority. Meet as many potential customers and business partners, bilingual Japanese legal firms and accounting firms, Japanese trading companies, distributors, resellers and agents, and knowledgeable locals, especially company executives who have been through the market entry experience, as you can find. Don’t overlook meeting with influential professors and academics at leading Japanese universities, because many senior Japanese executives, including CEOs of some of Japan’s largest corporations, seek advice from their university professors throughout their working life. I once sold a US$175,000 software package to a Japanese customer who bypassed the evaluation stage and didn’t compare competing solutions, simply because his university professor of 10-years before recommended my company’s product to him.

Ask your potential customers what presence you need to succeed in the Japanese market. For example, if you sell complex technology, are they expecting you to set up a support team in Japan even though you will use a distributor and not sell direct to end-users? In my experience, many influential customers, especially the 20% that will generate 80% of your Japanese sales and maybe 90% of your Japan business profits, prefer to deal ‘direct with the source’, especially for customer support. Listening carefully to how they describe your competitors’ salespeople or distributors, can also give you valuable hints about which distributors you should target as potential partners and which to avoid if you decide to go the distributor route.

A key question overlooked by many executives of foreign companies starting business in Japan, is to ask your potential customers who they think is the best sales person, business person, support person, etc. in your industry. The names you get may well be great candidates for your subsidiary team if you decide to go the direct sales route and will give your Japanese head-hunter or executive search agency a place to start searching. Despite the myth that tells you ‘……in Japan nobody moves from one company to its competitor……’, I once did just that and then won more than $1,000,000 of perfectly legitimate new business within 9 months of moving from one US software vendor to become the President of its competitor’s Japanese subsidiary. The customers bought from me because they liked me, trusted me and preferred the product I was selling; the ‘Like – Trust – Buy’ golden rule of sales success applies even more so when selling in Japan.

By the end of your first month in Japan, you should have enough knowledge of Japanese business culture, Japanese business people and the Japanese market, to start making educated decisions, no longer just guesses or hunches, about how your company can best start business in Japan. Armed with this knowledge, you will be in a strong position to understand the Japanese market value of your products or services and be able to forecast your revenues in the first 3 – 5 years of Japanese business. This knowledge will be an essential foundation for your second month in Japan, when you decide how and maybe with whom, you will enter the Japanese market; whether you will distribute or sell direct.

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