Structuring Market entry strategies to penetrate/expand in Japan [2of3]

Barriers

While being on the outside of a keiretsu (or any other insulated social structure) is clearly an additional barrier, all is relative (pun intended). While speaking of barriers, the article goes on to cite,

“Morgan Stanley Dean Witter & Co. entered the Japanese financial services industry by

Opening retail branches in 1998, when the Tokyo Department Store Group announced

the closure of its Nihonbashi store after 337 years (partially a result of Japanese

consumers' increased price consciousness)”.


While I do not tend to think of department store groups as analogous with major financial services titans, presumably such is the case here. Given there is no back-story, it seems that MSDW & Co. did not even bother considering entry until the unlikeliest of events, a 337 year old icon closing of its own accord (not the kind of strategy one can readily duplicate).

When the article spoke of “a need remains to offer channel members high levels of service and substantial financing”, there was a sense we may be within the arena of authentic, duplicate-able strategy.

The article went on to delineate, “16 problem areas for foreign firms doing business in and with Japan (… distilled to …) 1) unique Japanese business practices. 2) rigid quality/standard expectation and regulation. 3) high operational cost, and 4) preference for Japan-made products”, and reminded of the specific issues related to the keiretsu (“because they're linked together by means that are illegal in the United States (and) often are accused of dealing predominantly with group members, thereby denying market access to foreigners”.

Again, these are the known issues. The aforementioned service and financing referenced a potential window into this world. Let us now turn to the rest of what may work.


Market entry alternatives


Virtually always, a useful entrée strategy is to find a niche. That, along with catalog mailings, served L.L. Bean Inc., Eddie Bauer Inc., and Land's End Inc. to establish them to where their presence now includes brick-and-mortar storefronts.

E-commerce, non-store retailing and mail-order were also cited as worthy of exploring. (Although at one point the article mentioned, “Japanese industry lags behind the United States in its approach to information technology”, which seems arguable).

Borrow what works, of course. The article suggests repeating the value of the Japanese Export Complaint Management (ECM) system. At the heart of this idea is the management of that customer with a complaint who is also willing to lend voice to it as your most valuable customer of all. It may seem counterintuitive, but it cuts through all that marketing mumbo-jumbo, for here is a real living and breathing customer who was willing to tell you either where you are failing or how you can serve the customer better. Moreover, ignoring such a voice would be doing so at one's own peril, for anyone who is this vocal, you can be sure, will also carry this into word-of-mouth. Truth told, a dozen years later, this is now widely incorporated as a best practice.

This all seems old school. However, and consistent with the creative centric and people oriented current wave of marketing strategy, also mentioned were trade negotiations, better business strategy (vague) and a hunger and consciousness to conduct real market research. Also mentioned as useful, adapting products and services whenever and wherever it seems advantageous, to consider collaborations of all kinds (strategic alliances, mergers, etc.). Constantly be taking the temperature of the market (to be responsive wherever possible), to stand in the customer's shoes and take on the long-term orientation consistent with the Japanese and always be ever more service oriented.