Japan Market Entry

JMC’s Japan market entry services help foreign companies coming to the Japanese market build a solid foundation they can use as a springboard to future success. In the past, we have helped our clients achieve substantial sales and profits within a reasonable period of 3 to 5 years.

Entering the Japan market is relatively difficult, which is why it is essential to have a business plan in Japan designed to achieve profitability and reduce risk.

Best Japan Market Entry Strategy

If you want your business to be successful in Japan, it is important to first understand what has made it successful in your home market. Whether you currently operate in the U.S. market, in Europe, or anywhere else, developing a solid strategy based on your strengths will give you the best chance of replicating your previous success. Once JMC’s experts familiarize themselves with your company, we will outline the standard business model for your company and identify your key strategic advantages, as well as the factors that have made you successful in other markets.

The next step is comparing your successful business model with the Japan market environment. Will market regulations prevent you from operating in the same way as you did in other markets? Will your new overseas operation be in a competitive position? By answering questions like these, we can develop a market entry strategy for Japan and a business plan to make it happen. This business plan will detail each step you will need to take for Japan market entry, including specific objectives, sales targets, and the resources you will need, in terms of personnel and budget. Having a plan in place will give you the leverage you need to obtain necessary resources from your corporate headquarters and mitigate potential risks.

To Partner or Not to Partner: The Classical Dilemma of Japan Market Entry

One key decision you will have to make is whether or not to partner. Your business plan will outline the advantages of partnering and our consultants will make a recommendation in this area. This answer will differ depending on each business’s situation and the current market environment.

There are 4 possibilities for Japan market entry:

  • Going alone with the help of a consultant
  • Getting a Japanese distributor
  • Making a Joint Venture with a Japanese partner
  • Acquiring a Japanese company.

JMC will help you determine the best choice for your firm in Japan market entry.

If you decide to go with a partner, JMC can help you during the whole process, from identifying a potential partner to selecting a partner and setting up a partnership agreement with favorable terms.

Pitfalls to Avoid When Entering the Japan Market

The Japanese market is extremely competitive. When foreign companies attempt to enter the Japanese market directly without taking the time to research market conditions, they can experience several pitfalls that can prevent them from being successful.

Many businesses take the risky approach of directly hiring a Japanese national to start their Japan subsidiary. This is usually a bad decision. For example, it can be difficult to hire an English-speaking candidate to fulfill this role. In many cases, a candidate who is less proficient in English may be a better choice than a fluent English speaker. While, as a foreign business entity, you may prioritize English fluency, this factor is far from a guarantee of success when entering the Japanese market.

Top Reasons to Enter the Japanese Market

There are many reasons why a foreign company may want to incorporate in Japan. With over 100 million consumers, Japan offers a big opportunity for businesses that want to become international players. Wholesale, retail, information and communication, and the financial and insurance industries are especially attractive. A Japan market entry is also a good way to test the waters of the Asian market if you are interested in expanding further into the continent. Because market entry in Japan is notoriously difficult, succeeding there can make it easy to establish a presence in other Asian countries using the same business model.

Why It’s Difficult to Enter the Japanese Market & How to Succeed

The economy and government of Japan do present some significant barriers to market entry. As such, if you want to enter Japan, market strategy is especially important. First, when the Japanese economic bubble burst in the 90s, they experienced a protracted recession. While conditions have improved since then, GDP growth is still slower than many companies would like. The language barrier is another factor that will need to be incorporated into your market entry strategy. Conventional business practices are also different in the Japanese market than they are around the world. For any business that wants to enter Japan, the market strategy will need to account for these different business practices. Finally, business regulations are particularly strict.

While these barriers to entry discourage many businesses, it is possible to overcome them with the right market entry strategy. Market entry consulting can help you find the best market entry strategy that will set you up for long-term success. The team at JMC has decades of combined experience with Japanese market entry consulting and we can help you get your foot in the door. We have already assisted numerous businesses in establishing a Japanese presence with a range of services. If you need help hiring talent in Japan, setting up an office, or finding the best way to conduct payroll, banking, and accounting functions, get in touch with us today. Incorporating overseas can be a challenge, but our team of professional consultants can help you overcome any difficulties and prepare yourself for the future.