Updated: Nov 6
When expanding to Japan, companies have two key options: hire a Country Manager to manage the business locally in-house, or find a partner that will fulfill similar duties. In this article, we will cover the pros and cons of hiring a Country Manager vs. finding a partner.
Common mistakes when hiring a Country Manager
Traits of a successful Country Manager
Different types of partners
How to find the right partner
This article is based on a synonymous webinar presented by btrax Senior Advisor Hidemaru Sato. You can watch recorded version of his webinar below or review the slides here.
Current Japanese Landscape
Before we begin, let’s take a look at the current Japanese landscape for foreign-owned companies and some recent trends.
The chart below shows the number of foreign-affiliated firms operating in Japan and the year-to-year increase of these firms. Although growth of the number of foreign firms in Japan has slowed in the past three years, the overall number of firms operating in Japan is still very high and this looks to remain steady for the years to come.
Source: Teikoku Databank
The chart below shows the breakdown of foreign companies in Japan by region. There is a steady increase of companies from all included regions, with the largest investments from Europe and North America. In recent years, there has also been a significant increase in the number of Chinese firms entering the Japanese market.
Source: Teikoku Databank and Meti
Due to the recent weakness of the Yen, now is a very good time to expand into the Japanese market. However, before you jump straight in and hire a Country Manager or find a partner, you should make sure to do the following:
Research competitors and market pricing
Identify your unique value proposition to Japanese consumer
Create your local online presence for digital marketing
Localize your brand
Take a trip to Japan to gain direct market insight
The above are all very important steps to take, but may be difficult to do on your own, so you should consider how you can complete these steps quickly and thoroughly.
The pros and cons of hiring a Country Manager vs. finding a partner
Overall, partnering is better for companies in their early stages of expanding to Japan, and hiring a Country Manager is better when the company has established a steady foothold in a new country. This is because partnering is faster to setup and results are quick to deliver, and hiring a Country Manager takes more time because it is important to find the right person.
Therefore, to get your foot in the door quickly, we recommend partnering in the earlier stages then moving to build your own team when you have the in-house knowledge and resources to do so in a new country.
Different Types of Partners
Business and marketing agencies
A good partner should understand Western and Japanese culture and help you bridge the gap. There are not many partner candidates that satisfy this requirement for the Japanese market.
Finding the Right Partner
Below are some tips on how to find the right partner for your Japanese expansion.
You can contact JETRO, an organization for Japan External Trade. They have lots of information regarding potential partner candidates and will recommend the ones suitable for your business.
Communication is key for ensuring business values and objectives are aligned. Your partner should have good communication skills to help you grow your business. Bilingualism is also important.
Developing relationships in Japan takes a long time. One advantage of hiring a partner is that you can utilize the breadth and depth of their business network. If you find a partner that has done extensive cross-cultural work, they should have a valuable network that you can tap into by partnering.
Your partner should have some industry track record in your area of business as well as experience working with both US and Japanese companies.
Roadtrip: There’s only so much asking around you can do. Nothing can replace actually visiting the country and seeing the landscape in person to further understand your own needs.
Relative to finding a good Country Manager, finding a good partner is easier. However, a good partner should be familiar with both Western and Japanese business cultures, and have a stellar industry track record.
When it comes to Japanese market entry, now is a good time to take action.
Understand the market challenges and size
Partnering is a good option
Keep in mind common mistakes and key traits when you hire a Country Manager
Nothing is done 100% solo – help your Japan team achieve their best performance
Make your team feel valued – communicate!