3 Steps to Successful Business Expansion to Japan [WHITEPAPER]


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Insights and advice on how international corporations can enter the Japanese market and capitalize on its business opportunities.

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3 Steps to Successful Business Expansion to Japan [WHITEPAPER]

  1. 1. WHITE PAPER: KVH Global Services 3 Steps to Successful Business Expansion to Japan Insights and advice on how international corporations can enter the Japanese market and capitalize on its business opportunities Table of Contents 2 Introduction 3 Establish Local Business Partners 4 Understand the Spoken and Unspoken Languages 5 Secure Connectivity 7 Conclusion 8 Contact Us 8 About KVH Copyright© 2012 by KVH Co. LTD All Rights Reserved. Not to be copied or reproduced without express permission of KVH Co LTD Page 1 of 8
  2. 2. 3 Steps to Successful Business Expansion to JapanIntroduction different consumer markets. One example is a leading Japanese mobile phone serviceMore and more, enterprises across the provider recently unveiling their new smartAsia-Pacific region and globally are assessing phone that targets seniors2, featuring largehow they can succeed in Japan’s unique screens and fonts for easy viewing, as well asmarket. With the evolving HFT and financial simplified application usage. In doing so,markets, rapidly growing e-commerce and they have demonstrated a way to reach aonline gaming markets, high mobile and seemingly small audience that actuallyinternet penetration, and the booming represents a large, and so far untargeted,development and adoption of social media, part of the population that can generate highJapan offers boundless opportunities and sales figures.clearly earns its reputation as the gateway toAsia for foreign businesses and investors. In short, the Japanese market is booming across several industries, and is expected toParticularly, although Japan was considered continue growing. Many Japanesea relatively slow adopter of smart phones companies have identified the key changesamong developed and technologically in consumer and enterprise behavior, and areadvanced nations, it has the highest rate of quickly adapting their strategies to generate“Smart Phone Heavy Users” according to a new business and sales opportunities.recent Wall Street Journal article1, with smart Various foreign companies are also making aphone users tripling in numbers since 2011 and strong reputation for themselves in Japan,the highest average number of applications though these are not as common.installed in smart phone devices in the world. Salesforce.com, for example, has beenTo capitalize on this rapidly growing and broadly implemented and praised across thetechnologically evolving market, the mobile Japanese market with 5,000 Japaneseindustry’s major players are not only releasing companies already using their service. Suchnew smart phone and tablet models in record companies have entered Japan with a clearnumbers, but are also becoming more and unique strategy in mind, which includescreative and savvy in how they penetrate leveraging local business partners and 2 Agence France-Presse 2012, Japans DoCoMo to1 Koh, Yoree 2012, Japanese Smartphone Users: Fewer, launch smart phones for elderly, Hurriyet Daily News,But More Savvy, The Wall Street Journal – Japan viewed 22 May 2012,Realtime, viewed 22 May 2012, < <http://www.hurriyetdailynews.com/japans-docomo-tohttp://blogs.wsj.com/japanrealtime/2012/05/16/japane -launch-smart-phones-for-elderly.aspx?pageID=238&nIDse-smartphone-users-fewer-but-more-savvy/>. =20869&NewsCatID=374>. Copyright© 2011 by KVH Co., Ltd. All Rights Reserved Page 2 of 8
  3. 3. 3 Steps to Successful Business Expansion to Japanvendors, enabling bilingual use of their Establish Local Business Partnersproduct, and gaining a thoroughunderstanding of how Japanese Having a strong and reliable local businessorganizations conduct business. These network is key to tapping into the Japanesestrategies, however, should not be market. There is a common understandingunderestimated. that 20% of a business’ most influential customers in Japan will lead to 80-90% of theirWhat is often misunderstood or overlooked by business profits as word-of-mouth is not onlyforeign companies, is that expansion into highly valued, but genuinely trusted in thisJapan involves the challenges of languageand cultural barriers, legal and regulation remarkably extensive though closelydifferences, lack of market understanding, connected society.and breaking into a new business network, Thus, it is critical to strongly consider who yourwhich differ in complexity and style from other business partners will be in this endeavor andmajor financial and business hubs in the how you can best leverage their capabilities.Asia-Pacific like Hong Kong and Singapore.Although it is easy to assume that the Organizations that are based in Japan withextensive Westernization of Japan and the everything from Sales to Operations toglobalization of some of Japan’s most Product Development conducted locally, arerenowned corporations, such as Toyota and far more likely to ensure reliable andMitsubishi, would make the Japanese market high-quality local services that are molded torelatively open to adopting foreign products suit the market in comparison to organizationsand embracing foreign business, lack of that operate their services overseas, thoughexperience and understanding of this unique merely use Japan as a base for their officemarket can often lead to failed businessventures by foreign organizations. headquarters. For example, for businesses requiring localThis whitepaper aims to outline some of the hosting or colocation services, companieskey considerations and steps foreign with their own data centers in Japan will bebusinesses should take in order to succeed in able to provide a significantly more valuableJapan’s unique and constantly evolvingmarket. service than providers that operate from data centers based overseas. Local computing resources will ensure the latency required for web applications, as an example, is met, and Copyright© 2011 by KVH Co., Ltd. All Rights Reserved Page 3 of 8
  4. 4. 3 Steps to Successful Business Expansion to Japanenable faster and smoother use of these Operations, and Management teams, areapplications among Japanese users able to communicate with you in youraccessing from within Japan. Furthermore, language as needed. In cases where anservice providers that can combine these issue needs to be escalated to another team or level of management, bottlenecks causedservices with security solutions, network by communication barriers can be extremelyconnectivity, managed services, and time and resource-consuming. Moreover, ifbilingual technical support 24 x 7, will offer a this issue is related to your data or networkcomplete and cost-efficient IT solution. connectivity, these delays could lead to dataSeamless communication in a common leakages and contamination, security threatslanguage will also allow your business to save and hacker breakthroughs, or other forms oftime and focus resources and efforts on your malware issues that could severely damagecore business areas. the reputation of your company.Understand the Spoken and Also, it is important to understand that basic conversational Japanese skills and a surfaceUnspoken Languages understanding of Japanese business culture will not necessarily meet the standardsAlthough Japan is becoming more and more required to communicate with localinternational, without internal Japanese businesses effectively. Some commonwriting and speaking capabilities locally, it will courtesies that are often missed include beingbe difficult to conduct business at all. Some organized and punctual at all times byJapanese companies may have a handful of ensuring meetings are planned several weeksstaff who can communicate competently in in advance with the time and locationEnglish, though these skills are often utilized planned appropriately (e.g. When choosing aacross the company to deal with all of their restaurant for a meeting, consider theforeign-business related work, rather than restaurant’s atmosphere, menu andproviding overseas-based customers with the ingredients of the meal, location in relation toconsistent bilingual communication and their office and convenient train stations, andsupport they require. note that seating a customer at the edge of a long table will be considered rude),When working with business partners and understanding the correct way to exchangevendors, ensure that not only your contact at business cards, perfecting the art of bowingthe company, but also their direct team, as at the right time and angles, and learning thewell as the relevant Sales, Service Desk, hidden meanings behind certain phrases Copyright© 2011 by KVH Co., Ltd. All Rights Reserved Page 4 of 8
  5. 5. 3 Steps to Successful Business Expansion to Japansuch as “Daijoubu”, which directly translated 250 million views of NHK, Japan’s leadingmeans “I’m fine”, though in a business context mainstream media sources3.often eludes to “No”. To survive and thrive in this technologicalUnderstanding the complexities of Japanese environment, businesses need to ensure theylanguage and culture is not to be have reliable and secure ways of storing theirunderestimated and misunderstandings in data, flexible and scalable IT resources tocertain scenarios can easily lead to a account for fluctuations in their productcustomer losing trust or interest in your usage, access to the lowest latency networksbusiness. As such, when leveraging a local for latency-sensitive processes, and thebusiness partner that you believe will act as means to enable their staff to work fromyour gateway to more Japan-based business anywhere and at any time while remainingopportunities, ensure they not only speak your connected to their team and data whereverlanguage, but also have capabilities they may be located.throughout their organization in Japanese tofill the gaps in skills or knowledge that you To start, consider the following:require. Cloud Computing: The cloud computingSecure Connectivity industry in the Asia-Pacific region is booming, and Japan is becoming a key player in thisThe final and, arguably, most important shift with 70% of CIOs claiming 4 cloudcomponent of your business expansion to integration as a top priority in 2011.Japan, will be how you technologically keep Leveraging an Infrastructure-as-a-Servicepace with this highly tech-savvy society and (IaaS) provider that offers a cloudfast moving economy. Japan boasts not environment with connectivity via global L2only high and increasing internet and mobile networks will enable your business to expandpenetration rates, but statistics also show a to Japan and beyond via low latencyrapid shift towards communication throughsocial media and away from traditionalinformation sources. For example, 3 Hepburn, Aden 2011, Infographic: Asia-Pacific Social Media Statistics, Digital Buzz Blog, viewed 7 May 2012,according to research conducted by <http://www.digitalbuzzblog.com/infographic-asia-pacBurson-Marsteller in 2011, Japan generated ific-social-media-statistics-stats-facts/>.over five billion blog views, and almost six 4Subramanian, Krishnan 2011, IBM Survey: CIOs Expect A Cloud Boom, CloudAve, viewed 7 May 2012,billion video views via video sharing platforms, <http://www.cloudave.com/12290/ibm-survey-cios-expthough only 310 million views of Yomiuri and ect-a-cloud-boom/>. Copyright© 2011 by KVH Co., Ltd. All Rights Reserved Page 5 of 8
  6. 6. 3 Steps to Successful Business Expansion to Japanconnectivity. These networks are also highly Online and Mobile Gaming: Asia’s onlinesecure as they create an environment within gaming industry is booming, with Japan as awhich the administrator can connect to their hub for the action. This stems from a longlocal computing resources as if they have history of adopting mobile technology well inbeen built within a closed corporate network. advance of many Western markets whileCloud environments also offer the flexibility to competing with similarly technologicallyscale your IT environment according to advanced markets like Korea and Hong Kong.demand, which leads to higher cost Japan holds the world’s second largest videoefficiency and more reliable support during game industry (after the US) and hosts aspikes in data traffic. multi-billion dollar social gaming market5 that stems from the mobile social gaming giantsFinancial Market: Renowned as the gateway Gree and DENA. Overall, this is a highlyto Asia for the global financial industry, Tokyo active gaming market of over 39 million users6,offers businesses in the financial services offering boundless opportunities for foreignsector opportunities to capitalize on a gaming companies to reach a new audience.growing and successful HFT market and some To tap into Japan’s highly active gamingof the most active exchanges in the world. community and capitalize on this market,To best leverage these opportunities, seek a establish high-speed network connectivitynetwork and data services provider that not that allows for spikes in data traffic and canonly offers the best proximity services and handle them securely. Online gamers,lowest latencies in the market, but can also particularly those who are used to high-speedoffer highly secure networks and hosting as internet, will easily and quickly dismiss gameswell as a proven reputation in the industry. that are slow or regularly lag.Furthermore, service providers with PoPs As such, to minimize the network latency you(Points of Presence) in your region and key are providing to end-users, leverage an IaaStarget markets as well as strong partnershipswith other leading institutions in your keymarkets will enable optimal results. For 5 Schutte, Wybe 2012, Japan’s Social Gaming Marketexample, traders should be looking at [Infographic], GamesIndustry/Blog.com, viewed 7 May 2012,providers that hold partnerships with HKEx for <http://www.gamesindustryblog.com/2012/04/japans-sHong Kong, TSE and OSE for Japan, KRX for ocial-gaming-market-infographic/>. 6Korea, and more to ensure they are truly は口人 ザー ユム ー ゲ 2011, トイエ リク ア ィデ メ社 会式 株 3,900 産ムーゲ「 書白るす瞰俯を年 の界業ムーゲ。人万 、 10capitalizing on the opportunities in these Decade , ValuePress!, viewed 22 May 2012, 刊発」 業markets via the best available resources. <http://www.value-press.com/pressrelease/88532>. Copyright© 2011 by KVH Co., Ltd. All Rights Reserved Page 6 of 8
  7. 7. 3 Steps to Successful Business Expansion to Japanservice provider based in Japan with a local IT you want to penetrate, and whether theirenvironment. Using an experienced cloud language capabilities go beyond Japaneseservice provider that guarantees and English, and cater to the needs of yourperformance with SLAs and can handle the business in other regions.difficulties and expenses involved inmaintaining optimal connectivity speeds, will Conclusionfree up even more time and resources tofocus on your core areas of business. Also, Japan is undoubtedly a market not to beverify the efficiency of the servers by testing missed, particularly for businesses looking tothe environment beforehand. Testing the extend their capabilities across theserver environment will allow you to Asia-Pacific. However, to succeed in thisunderstand whether the provider and their market takes a thorough understanding ofservices can actually meet your specific how your particular industry functions locally,needs. Lastly, as the gaming industry and a strong network that can lead to thebecomes increasingly international, ensure right business partnerships for youryour network is extensive across and beyond organization.the Asia-Pacific region to support yourbusiness as it grows organically and as you One business partner that can meet severalcontinue to search for and execute growth of your needs will be significantly moreopportunities in other markets. Rather than cost-effective, productive, and easier toleveraging the platforms of other gaming manage than several business partners thatcompanies in your target markets, assess the each provide a single service. Thus, chooseoptions of a neutral IaaS provider, as they will your business partners wisely and ensure theyoffer more freedom in how you use the offer a range of flexible and scalable solutionsplatform, and give you more flexible reach to to not only support your business as it starts upyour target audience. in Japan, but also enable it to grow as it succeeds in this market and expands intoInternational Capabilities: Where are your other upcoming regions.other offices and where do you plan toexpand beyond Japan? Assess whetheryour service provider has PoPs in markets youare currently and plan to operate in, whetherthey can offer connectivity to the key markets Copyright© 2011 by KVH Co., Ltd. All Rights Reserved Page 7 of 8
  8. 8. 3 Steps to Successful Business Expansion to JapanContact UsTokyo (Headquarters) Singapore KoreaTamachi Ekimae Building, Soho 2 @ The Central KVH Korea Ltd.3-1-35 Shibaura, Minato-Ku, 12 Eu Tong Sen Street, #08-170 10Fl., Jaram building, 566Tokyo 108-0023, Japan 059819 Singapore Dohwa-Dong, Mapo-Gu, Seoul, South KoreaPhone: +81-(0)3-4560-4800 Phone: +65-6590-9008 Phone: +82-2-1661-4801Yokohama Hong Kong Chicago12F Queens Tower A, Room 2604, 26/F., KVH Services LLC2-3-1 Minatomirai, Nishi-ku, C.C. Wu Building, 141 W. Jackson BoulevardYokohama 220-6012, Japan 3020308 Hennessy Road, Suite 3810Phone: +81-(0)45-670-4411 Wanchai, Hong Kong Chicago, Illinois 60604 Phone: +852 9220 0105 U.S.A.Osaka Phone: +1 312-465-2485Osaka 7F Epson Osaka Bldg. China KVH Information System (China) Co.,3-5-1 Bakurou-machi, Chuo-ku Ltd.Osaka 541-0059, Japan 606, Bund Center,Phone: 06-6258-7070 222 Yan An Road East, Shanghai 200002, China Phone: +86-21-63351212About KVHKVH was established in Tokyo in 1999 by Fidelity Investments as a Japan focused IT / communications service provider.As an information delivery platform that allows enterprise customers to store, process, protect and deliver their vitalbusiness information, KVH offers integrated cloud and network solutions that include infrastructure-as-a-service,managed services, data center services, professional services, data networking, internet access, and voice services.KVH operates the lowest latency network in Japan, and with over 450 financial services customers, is the leadingprovider of ultra low-latency network and proximity hosting solutions to the high-frequency trading community inTokyo and Osaka. KVH also offers low-latency connectivity services between major financial markets in theAsia/Pacific region and the US including Tokyo, Chicago, New York, Singapore, Hong Kong, Shanghai, and Sydney.More information on KVH can be found at www.kvh.co.jp/en/ Copyright© 2011 by KVH Co., Ltd. All Rights Reserved Page 8 of 8