A good business partner is essential in Japan They have to know the market, speak Japanese and be available 24/7. S-GE expert Jacqueline Tschumi makes this quite plain. If a problem arises, you have to be able to act at very short notice. This is impossible from Switzerland. This is why Tschumi recommends that all foreign companies start their business activities in Japan with a partner.
Switzerland – Japan: Time and cultural differences
These partnerships need to be cultivated. Interested entrepreneurs should ideally travel to the country at least once a quarter. Jacqueline Tschumi knows why: “We know of companies that travel to Japan once every 5 years and then wonder why business isn’t flourishing. It's not enough to employ a sales manager who can look after the whole world from the head office.” This is simply not realistic in the case of Japan, owing to the different culture and the big time difference. In order to be successful in Japan, it is really important to know the country and also adapt the products to local needs.
An extensive partner search is worthwhile
But how can the right business partner be found? Jacqueline Tschumi has a simple answer: with Switzerland Global Enterprise Swiss exporters could also look for suitable people at a trade fair, but Japan expert Tschumi doesn’t believe that this approach is likely to be successful. To put it plainly: “While looking for someone directly on the spot can be a good idea to start with, it's seldom sustainable. Instead, I recommend looking at all the options. At S-GE, we achieve this by examining the market on the basis of a given profile, looking at what it actually offers and pre-selecting possible partners.” This gives customers a lot of background information and enables them to see what alternatives are available.
Find the right business partner
Loyalty is everything
In Japan, the business world is defined by loyalty between business partners. If an exporter breaks ties with its domestic distributor, word soon gets around in the market. In this case, even S-GE needs to know why this occurred. Corresponding questions can only be answered credibly if the reasons for dissolving a partnership are known. And according to Tschumi, these questions are sure to come up. In general, the Japanese mind-set is more long-term than in Switzerland. The time horizon is often as much as 20 years and not just 2 or 3 years.
It's important to have the right partner from the start, to build something with them and invest in them.
The alternative to a local business partner is to set up a branch office. This has many advantages, but also has its pitfalls. “A branch office helps to overcome distance and time differences. It permits greater control and creates trust, because Japanese consumers and buyers see that a company wants to be active in the market in the long term. Especially in the after-sales segment, which is very important in Japan, this can bring decisive advantages,” sums up Tschumi. At the same time, she points out that a subsidiary should only be contemplated if business has started to pick up and there is considerable market potential.
The pros and cons of having your own branch office
Establishing a branch office is relatively easy. The process is straightforward and in two to three weeks a lawyer will have a branch office up and running. According to Tschumi, the bigger problem lies elsewhere: “How can interested exporters find people with the right technical and language skills to run this branch?” The search is difficult and definitely a sticking point.” That's why Japan is also a typical head-hunter segment, at both CEO and sales level. In close cooperation with local experts, Switzerland Global Enterprise assists in the search for personnel so that customers can recruit suitable staff locally.
Long decision-making processes
Age is another Japanese peculiarity: many Japanese SMEs are run by older people. This often makes succession planning a problem. If Swiss companies are looking for business partners, they should watch out when it comes to age. There is a risk that many things could simply peter out. In addition, hierarchies have to be respected:
It is very rare for a salesman to approach a CEO directly. Communication is always on the same level.
Tschumi also mentions the fact that Japanese people often turn up to meetings with five or six people. Making decisions is a lengthy process, requiring the involvement of different hierarchical levels.
When in Japan, it is important that you accept golfing and karaoke invitations
According to Tschumi, personal relationships are more important than in Switzerland. Decisions are seldom taken at meetings, but rather when playing golf or eating out. Invitations to karaoke should therefore always be accepted. This is the best opportunity for more open communication.
