4 Serious Mistakes Foreigners Must Avoid When Entering the Japanese Market

The Japanese market is poised to accept more and more foreign businesses. The Japanese government itself is encouraging foreign businesses to establish themselves in the country, by reducing the cost to apply and reducing bureaucratic red tape as well.

There are many benefits to opening a company or a branch office in Japan, but there are also many pitfalls as well.

Below are 4 serious mistakes foreigners must avoid when entering the Japanese market:

  1. Incomplete Market Research

Market research is necessary wherever you hope to open a business, but it is particularly important when you are founding a company overseas, especially in a country that has a very different culture than the one you’re used to.

There should be no wishful thinking in market research, no “if we build it, they will come.”  Instead, it requires feet-on-the-ground researchers, proficient in the language, who can explore the markets and the trends affecting those markets to see if your business will be a good fit.

  • Is there a need for your service or product in Japan?
  • Who are your competitors, if any?
  • In what city would be the best location for your headquarters?
    • Sufficient workforce
    • Sufficient interest from consumers
    • An appropriate infrastructure

  1. Insufficient Planning

Insufficient planning would doom a company in any country, but again planning is more important than ever when establishing the business in a foreign country. Planning and market research go hand-in-hand but are two separate tasks. Planning includes researching the cost of advertising, whether to build a new building or rent an existing structure, where to locate the business for ease of access by employees and customers, and so on.

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  1. Insufficient Capital

As you can see, many of the common mistakes businesses make during market entry in Japan are the same as are made in their own countries – including insufficient capital. A business must be capitalized sufficiently so that it can withstand at least two or three years of building up its clientele and becoming profitable.

  1. Ignoring Japanese Personal and Business Culture

This mistake is the most crucial one of all, and actually embodies quite a few sub-mistakes. Let’s give just one example: the business card. In most European countries, a business card is just something you give out to people. If the recipient folds it carelessly and sticks it in a pocket, the giver thinks nothing of it. If the recipient writes on it, the giver thinks nothing of it. But in Japan, those actions are insults to the giver. A business card is a very important document. A status symbol, and something to be treated with respect. Because of this, you’ll note that the individual giving you his or her business card will do so with both hands. You should receive the business card with both hands, also. The Japanese do not stick their business cards carelessly in a wallet to be given out when needed. They use a business card holder and expect others to do the same.

If there is a ritual involved in something as simple as the giving and receiving of business cards, how many more rituals are there that it is imperative you know to avoid offending your Japanese colleagues, superiors, or customers?

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Business people in Japan will expect foreign businesses to respect their culture and learn the intricacies required. By neglecting to do so, your potential success could be compromised. For this reason, it’s important to employ a business services agency, such as SMEJapan.com, which can help guide you through the vast amount of knowledge required to open and run a successful business in Japan.