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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

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

  1. 1. Why Western Companies Fail in Japan<br />An Overviewbywww.schnellinterkulturell.de<br />
  2. 2. Why Western Companies Fail in Japan<br />An Overviewbywww.schnellinterkulturell.de<br />Rememberyoucanlike, tweetorflattranytime<br />
  3. 3. Why Western Companies Fail in Japan<br />An Overviewbywww.schnellinterkulturell.de<br />Rememberyoucanlike, tweetorflattranytime<br />
  4. 4. Let’s start with a few boldstatements<br />
  5. 5. The Japanesemarketis infamous for being difficult<br />
  6. 6. A lotofforeigncompaniesfailtoentertheJapanesemarket<br />
  7. 7. Theycould do a lotbetterwith a littlebitmoreofunderstanding<br />
  8. 8. Beforewetalkaboutsolutions, let‘shave a lookattheproblems<br />
  9. 9. In thispresentationwe will talkabout…<br />
  10. 10. The threeWs<br />
  11. 11. Whofailed?<br />
  12. 12. Whofailed?Whydidtheyfail?<br />
  13. 13. Whofailed?Whydidtheyfail?<br />Whatcanwelearnfromthat?<br />
  14. 14. Time for a littlebackgroundknowledge<br />
  15. 15. Japan‘seconomyisstagnatingsincetheearly 90s but…<br />
  16. 16. …Japan is still theworld‘s3rd largesteconomy<br />USA<br />CHINA<br />JAPAN<br />*dataasof 09/2011<br />
  17. 17. Althoughconsumerspendinghasdeclined…<br />
  18. 18. …thepotential marketisBIG!<br />
  19. 19. Let‘shave a lookathowJapanesepeoplespendtheirincome<br />
  20. 20.
  21. 21.
  22. 22.
  23. 23.
  24. 24.
  25. 25. Thereactuallyismoneytobemade<br />
  26. 26. Thereis a bigmarketandthereismoneytobemade. Noproblemright?<br />
  27. 27. Not exactly…<br />
  28. 28. Time and time again Japan hasproventobe a difficultmarketforforeigncompanies<br />
  29. 29. So what‘sthetalkaboutforeigncompaniesfailingin Japan?<br />
  30. 30. Let‘shave a smallQuiz<br />
  31. 31. Whichofthecompaniesbelowfailed in Japan?<br />
  32. 32. Allofthesecompanieshavefailedtogain a foothold in Japan!<br />
  33. 33. Let‘shave a moredetailedlookatsomeofthecompaniesandWhytheyfailed<br />
  34. 34. Information Services andPlatforms<br />0100100101101110011001100110111101110010011011010110000101110100011010010110111101101110001000000101001101100101011100100111011001101001011000110110010101110011<br />
  35. 35. Information Services and Platforms<br />Case #1<br />
  36. 36.
  37. 37. ebay‘sUSauctionsitemarketshareisover 90%<br />
  38. 38. ebay‘sUSauctionsitemarketshareisover 90%<br />ebay‘sJapanauctionsitemarketshare was about 3%*<br />*Whentheypulled out oftheJapanesemarket in 2002<br />
  39. 39. What went wrong?<br />ebaycharged commissions of up to 5%<br />ebay had acutely risk-averse Japanese customers submit credit card information on signup<br />ebay announced their platform well before launching a localized Japanese version<br />ebay‘sUSauctionsitemarketshareisover 90%<br />ebay‘sJapanauctionsitemarketshare was about 3%*<br />*Whentheypulled out oftheJapanesemarket in 2002<br />
  40. 40. Information Services and Platforms<br />Case #2<br />
  41. 41.
  42. 42. Google‘sUSsearchmarketshareis 65% to 90%*2<br />*1 Depending on yoursources<br />
  43. 43. Google‘sUSsearchmarketshareis 65% to 90%*2<br />Google‘sJapansearchmarketshareisabout 35%*1<br />*1 Depending on yoursources<br />*2 RecentlytheytookoverYahoo‘ssearchbiz in Japan expandingtheirmarketshare<br />
  44. 44. What went wrong?<br />In contrast to Yahoo! Japan Google offers little (well-known) services besides its search engine<br />Yahoo! Japan enriched its platform with Japanese news and entertainment options. Google offered a rudimentary translation of its most popular services (i.e. search)<br />Google‘sUSsearchmarketshareis 65% to 90%*2<br />Google‘sJapansearchmarketshareisabout 35%*1<br />Google nowpowersthesearchbusinessofformercompetitor Yahoo! Japan<br />*1 Depending on yoursources<br />*2 RecentlytheytookoverYahoo‘ssearchbiz in Japan expandingtheirmarketshare<br />
  45. 45. Food andBeverages<br />
  46. 46. Food and Beverages<br />Case #1<br />
  47. 47.
  48. 48. Wendy‘sis #3 fast-food chain in theUS<br />
  49. 49. Wendy‘sis #3 fast-food chain in theUS<br />Wendy‘sclosed all ofits 71 stores in 2009 after tryinggain a footholdfor 30(!) years<br />
  50. 50. What went wrong?<br />Wendy’s left the Japanese market after being unhappy with its J-biz growth and their Japanese franchisor<br />Again cross-cultural communication and management issues played a part in Wendy’s failure<br />Wendy‘sis #3 fast-food chain in theUS<br />Wendy‘sclosed all of ist 71 stores in 2009 after tryinggain a footholdfor 30(!) years<br />IsgoingtoreturntotheJapanesemarketatthe end of 2011<br />
  51. 51. Communication Services and Products<br />
  52. 52. Communication Services and Products<br />Case #1<br />
  53. 53.
  54. 54. Major player in Europe‘s mobile phonebusiness<br />
  55. 55. Major player in Europe‘s mobile phonebusiness<br />Sold thebulkofitssharestoJapaneseSoftBank Corp. in 2006 after failedattemptatJapanesemarketentry<br />
  56. 56. What went wrong?<br />Too little – too lateVodafone’s mobiles were no competition to the extremely specialized and at that time very advanced Japanese mobiles<br />Vodafone after acquiring J-Phone did NOT invest into necessary high-speed infrastructure (3G-Network) in Japan<br />Major player in Europe‘s mobile phonebusiness<br />Sold thebulkofitssharestoJapaneseSoftBank Corp. in 2006 after failedattemptatJapanesemarketentry<br />
  57. 57. Communication Services and Products<br />Case #2<br />
  58. 58.
  59. 59. Althoughfightingagainst a dwindlingmarketshare NOKIA is still going strong…<br />
  60. 60. Althoughfightingagainst a dwindlingmarketshare NOKIA is still going strong…<br />…exceptfor Japan wherereducedtheirphoneline-uptothevertuseries in 2008…<br />
  61. 61. Althoughfightingagainst a dwindlingmarketshare NOKIA is still going strong…<br />…exceptfor Japan wherereducedtheirphoneline-uptothevertuseries in 2008…<br />…beforecompletlyabandoningtheJapanesemarket in 2011<br />
  62. 62. What went wrong?<br />Similar to Vodafone, NOKIA also did not adapt to Japanese customer needs and instead marketed its world-wide models<br />Althoughfightingagainst a dwindlingmarketshare NOKIA is still going strong…<br />…exceptfor Japan wherereducedtheirphoneline-uptothevertuseries in 2008…<br />…beforecompletlyabandoningtheJapanesemarket in 2011<br />
  63. 63. Not all is lost though!<br />
  64. 64. Therearequite a fewexamplesofcompanieswhomadeit in Japan<br />
  65. 65. Companies whomadeit in Japan<br />
  66. 66. So whatshould I considerbeforejumpingintotheJapanesemarket?<br />
  67. 67. Questions to ask yourself before diving into the J-market<br />Am I after short-term profits or do I plan to invest long-term?<br />Can I apply my global strategy or should I develop a local strategy?<br />What’s the (Japanese) competition doing? Can I keep up?<br />Do I market my products correctly to my (Japanese) customers?<br />
  68. 68. Questions to ask yourself before diving into the J-market<br />Am I after short-term profits or do I plan to invest long-term?<br />Can I apply my global strategy or should I develop a local strategy?<br />What’s the (Japanese) competition doing? Can I keep up?<br />Do I market my products correctly to my (Japanese) customers?<br />Bonus Consideration<br />Do I haveexcellentcustomerservice?<br />Bonus Consideration<br />Am I catering to special tastes and customer demands<br />Whatareyourideas?<br />Bonus Consideration<br />Does my team understand the cross-cultural challenges?<br />
  69. 69. Need more info? Want to connectand exchange ideas? Looking for help?<br />
  70. 70. Did you like the presentation? Tell somebody by clicking below or share some flattrlove!<br />
  71. 71. Schnell Interkulturell<br />Consulting | Training| Market Research<br />Marco Michael Damm<br />TEL: (0049) 02421-2621884FAX: (0049) 03222-9983879MAIL: marco.damm (at) schnellinterkulturell.deWEB: www.schnellinterkulturell.de<br />TWITTER: http://twitter.com/schnellnterkult<br />

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