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ebay Nokia Vodafone - Why do Western companies fail in Japan?
 

ebay Nokia Vodafone - Why do Western companies fail in Japan?

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Why is a successful entry into the Japanese market so difficult for foreign companies? A business study exploring the Who, Why and best-practice of Japanese market entry

Why is a successful entry into the Japanese market so difficult for foreign companies? A business study exploring the Who, Why and best-practice of Japanese market entry

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    ebay Nokia Vodafone - Why do Western companies fail in Japan? ebay Nokia Vodafone - Why do Western companies fail in Japan? Presentation Transcript

    • Why Western Companies Fail in Japan
      An Overviewbywww.schnellinterkulturell.de
    • Why Western Companies Fail in Japan
      An Overviewbywww.schnellinterkulturell.de
      Rememberyoucanlike, tweetorflattranytime
    • Why Western Companies Fail in Japan
      An Overviewbywww.schnellinterkulturell.de
      Rememberyoucanlike, tweetorflattranytime
    • Let’s start with a few boldstatements
    • The Japanesemarketis infamous for being difficult
    • A lotofforeigncompaniesfailtoentertheJapanesemarket
    • Theycould do a lotbetterwith a littlebitmoreofunderstanding
    • Beforewetalkaboutsolutions, let‘shave a lookattheproblems
    • In thispresentationwe will talkabout…
    • The threeWs
    • Whofailed?
    • Whofailed?Whydidtheyfail?
    • Whofailed?Whydidtheyfail?
      Whatcanwelearnfromthat?
    • Time for a littlebackgroundknowledge
    • Japan‘seconomyisstagnatingsincetheearly 90s but…
    • …Japan is still theworld‘s3rd largesteconomy
      USA
      CHINA
      JAPAN
      *dataasof 09/2011
    • Althoughconsumerspendinghasdeclined…
    • …thepotential marketisBIG!
    • Let‘shave a lookathowJapanesepeoplespendtheirincome
    • Thereactuallyismoneytobemade
    • Thereis a bigmarketandthereismoneytobemade. Noproblemright?
    • Not exactly…
    • Time and time again Japan hasproventobe a difficultmarketforforeigncompanies
    • So what‘sthetalkaboutforeigncompaniesfailingin Japan?
    • Let‘shave a smallQuiz
    • Whichofthecompaniesbelowfailed in Japan?
    • Allofthesecompanieshavefailedtogain a foothold in Japan!
    • Let‘shave a moredetailedlookatsomeofthecompaniesandWhytheyfailed
    • Information Services andPlatforms
      0100100101101110011001100110111101110010011011010110000101110100011010010110111101101110001000000101001101100101011100100111011001101001011000110110010101110011
    • Information Services and Platforms
      Case #1
    • ebay‘sUSauctionsitemarketshareisover 90%
    • ebay‘sUSauctionsitemarketshareisover 90%
      ebay‘sJapanauctionsitemarketshare was about 3%*
      *Whentheypulled out oftheJapanesemarket in 2002
    • What went wrong?
      ebaycharged commissions of up to 5%
      ebay had acutely risk-averse Japanese customers submit credit card information on signup
      ebay announced their platform well before launching a localized Japanese version
      ebay‘sUSauctionsitemarketshareisover 90%
      ebay‘sJapanauctionsitemarketshare was about 3%*
      *Whentheypulled out oftheJapanesemarket in 2002
    • Information Services and Platforms
      Case #2
    • Google‘sUSsearchmarketshareis 65% to 90%*2
      *1 Depending on yoursources
    • Google‘sUSsearchmarketshareis 65% to 90%*2
      Google‘sJapansearchmarketshareisabout 35%*1
      *1 Depending on yoursources
      *2 RecentlytheytookoverYahoo‘ssearchbiz in Japan expandingtheirmarketshare
    • What went wrong?
      In contrast to Yahoo! Japan Google offers little (well-known) services besides its search engine
      Yahoo! Japan enriched its platform with Japanese news and entertainment options. Google offered a rudimentary translation of its most popular services (i.e. search)
      Google‘sUSsearchmarketshareis 65% to 90%*2
      Google‘sJapansearchmarketshareisabout 35%*1
      Google nowpowersthesearchbusinessofformercompetitor Yahoo! Japan
      *1 Depending on yoursources
      *2 RecentlytheytookoverYahoo‘ssearchbiz in Japan expandingtheirmarketshare
    • Food andBeverages
    • Food and Beverages
      Case #1
    • Wendy‘sis #3 fast-food chain in theUS
    • Wendy‘sis #3 fast-food chain in theUS
      Wendy‘sclosed all ofits 71 stores in 2009 after tryinggain a footholdfor 30(!) years
    • What went wrong?
      Wendy’s left the Japanese market after being unhappy with its J-biz growth and their Japanese franchisor
      Again cross-cultural communication and management issues played a part in Wendy’s failure
      Wendy‘sis #3 fast-food chain in theUS
      Wendy‘sclosed all of ist 71 stores in 2009 after tryinggain a footholdfor 30(!) years
      IsgoingtoreturntotheJapanesemarketatthe end of 2011
    • Communication Services and Products
    • Communication Services and Products
      Case #1
    • Major player in Europe‘s mobile phonebusiness
    • Major player in Europe‘s mobile phonebusiness
      Sold thebulkofitssharestoJapaneseSoftBank Corp. in 2006 after failedattemptatJapanesemarketentry
    • What went wrong?
      Too little – too lateVodafone’s mobiles were no competition to the extremely specialized and at that time very advanced Japanese mobiles
      Vodafone after acquiring J-Phone did NOT invest into necessary high-speed infrastructure (3G-Network) in Japan
      Major player in Europe‘s mobile phonebusiness
      Sold thebulkofitssharestoJapaneseSoftBank Corp. in 2006 after failedattemptatJapanesemarketentry
    • Communication Services and Products
      Case #2
    • Althoughfightingagainst a dwindlingmarketshare NOKIA is still going strong…
    • Althoughfightingagainst a dwindlingmarketshare NOKIA is still going strong…
      …exceptfor Japan wherereducedtheirphoneline-uptothevertuseries in 2008…
    • Althoughfightingagainst a dwindlingmarketshare NOKIA is still going strong…
      …exceptfor Japan wherereducedtheirphoneline-uptothevertuseries in 2008…
      …beforecompletlyabandoningtheJapanesemarket in 2011
    • What went wrong?
      Similar to Vodafone, NOKIA also did not adapt to Japanese customer needs and instead marketed its world-wide models
      Althoughfightingagainst a dwindlingmarketshare NOKIA is still going strong…
      …exceptfor Japan wherereducedtheirphoneline-uptothevertuseries in 2008…
      …beforecompletlyabandoningtheJapanesemarket in 2011
    • Not all is lost though!
    • Therearequite a fewexamplesofcompanieswhomadeit in Japan
    • Companies whomadeit in Japan
    • So whatshould I considerbeforejumpingintotheJapanesemarket?
    • Questions to ask yourself before diving into the J-market
      Am I after short-term profits or do I plan to invest long-term?
      Can I apply my global strategy or should I develop a local strategy?
      What’s the (Japanese) competition doing? Can I keep up?
      Do I market my products correctly to my (Japanese) customers?
    • Questions to ask yourself before diving into the J-market
      Am I after short-term profits or do I plan to invest long-term?
      Can I apply my global strategy or should I develop a local strategy?
      What’s the (Japanese) competition doing? Can I keep up?
      Do I market my products correctly to my (Japanese) customers?
      Bonus Consideration
      Do I haveexcellentcustomerservice?
      Bonus Consideration
      Am I catering to special tastes and customer demands
      Whatareyourideas?
      Bonus Consideration
      Does my team understand the cross-cultural challenges?
    • Need more info? Want to connectand exchange ideas? Looking for help?
    • Did you like the presentation? Tell somebody by clicking below or share some flattrlove!
    • Schnell Interkulturell
      Consulting | Training| Market Research
      Marco Michael Damm
      TEL: (0049) 02421-2621884FAX: (0049) 03222-9983879MAIL: marco.damm (at) schnellinterkulturell.deWEB: www.schnellinterkulturell.de
      TWITTER: http://twitter.com/schnellnterkult