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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