Doing Business in Japan & 7 Common Japan Country Manager and APAC Regional Manager Questions

7 Common Questions About Doing Business in Japan

Foreign companies operating in Japan or those seeking a local business partner often encounter various challenges throughout their collaboration. These challenges stem from significant differences in decision-making processes, management involvement, loyalty dynamics within the Japanese distribution system, and the high value placed on after-sales support and quality.

Throughout my career, I have led numerous companies in the Japanese market and have experienced both successful and challenging situations firsthand. As a CEO or Japan country manager, it can be challenging to resolve issues when you are deeply involved and simultaneously expected to meet targets. In such instances, the guidance of an experienced business professional would have been invaluable, saving both time and money while avoiding fundamental mistakes in Japanese business operations. Therefore, I recommend following the wisdom of an old Japanese proverb, “if you plan well, there will be no regrets”. This emphasizes the importance of investing time and resources in training and guiding your teams responsible for managing operations in Japan, as well as adapting your business management style accordingly.

At Network in Motion Ltd., a Japan business consulting agency, we specialize in addressing a wide range of challenges that may arise when conducting business in Japan, particularly in collaboration with local partners. In this article, I aim to share some of the most common questions our clients ask us, offering insights that can help your company navigate the intricacies of the Japanese market.

1. We find ourselves repeatedly answering the same questions from our business partners. How can we address this issue effectively?

To address this issue, you should keep in mind Japan’s unique decision-making process, where a group of professionals make decisions in a consensus while being challenged by their higher management. This is also one of the reasons for the long time it takes the Japanese to reply to complex matters. Consider creating a comprehensive FAQ document or knowledge base addressing frequently asked questions. Share this resource with your business partners and encourage them to refer to it for answers.

2. Our sales are falling behind our targets, and our local team seems to support our distributor’s ideas. How can we gain a fresh perspective on growing our business?

To gain a fresh perspective on growing your business, consider using this challenge to re-evaluate your current sales strategies and processes. To succeed in Japan, your company should provide genuine solutions to the local market needs, from regulations, consumables, services, business models, and sales team training.

Engage with external business support consultants or advisors with experience in the Japanese market to provide objective insights and recommendations. Encourage open and transparent communication with your local team to understand their perspectives and concerns. By fostering a collaborative environment and leveraging external expertise, you can develop innovative strategies to drive sales growth and align your team’s efforts with your business objectives.

3. Our Japanese partner is demanding expensive product changes without committing to quantities or funding the required R&D investments. What steps should we take?

When faced with such demands, it is crucial to establish a mutually beneficial understanding with your Japanese partner. Initiate discussions to understand their specific requirements, the rationale behind them, and the priorities of the requested change. It is also essential to pre-evaluate the potential impact of the requested changes on your product’s competitiveness to the market demand, as well as the regulatory implications of these changes. It is recommended to seek commercial commitments from your partner in supporting your company’s willingness to invest and conduct the requested adjustments. You can suggest discussing an increase in quarterly sales commitments or exploring alternative arrangements, such as cost-sharing for R&D investments. You can reach a more favorable outcome by finding a balance that considers both parties’ interests and ensuring a fair distribution of costs and benefits.

4. I met a Japanese businessperson at an international event, and though we exchanged emails initially, they stopped responding. How can I restore communication?

Restoring communication requires proactive efforts and cultural sensitivity in Japanese business. Firstly, send a polite follow-up email acknowledging any possible delays or misunderstandings. Consider seeking assistance from a local intermediary or mutual contact who can help facilitate communication. If necessary, try alternative communication channels, such as a virtual conference call or arranging face-to-face meetings. Demonstrating persistence, patience, and respect for Japanese business etiquette can help reestablish communication and strengthen the relationship.

5. How can we ensure that our local Japanese team remotely adheres to our timelines and targets?

Implement clear and structured communication channels with your local Japanese team to ensure remote adherence to timelines and targets. Establish regular check-ins through virtual meetings or project management software to monitor progress, address any challenges, and provide guidance. Set realistic and measurable goals, and ensure team members have the necessary resources and support to meet them. Encourage transparency and open dialogue to foster a sense of accountability and collaboration within the team. Regularly review performance and provide constructive feedback to ensure alignment with objectives.

6. I have sent emails to potential business partners but have only received automated replies. How can I establish direct contact with them?

Establishing direct contact with potential business partners requires persistence and a targeted approach. Moreover, the Japanese tend to do business via trustworthy business people with whom they have had a working experience in the past. This could be an executive in a parallel company they have worked with or a Japanese business expert or consultant. Follow up on the automated replies with personalized emails or phone calls, expressing your interest in collaboration and offering specific discussion points. However, we recommend that you leverage any mutual connections or introductions to increase the chances of a response. Attending industry events or conferences in Japan can provide opportunities for face-to-face interactions. Demonstrating your commitment and value proposition while respecting Japanese business protocols and etiquette is important.

7. As a medical device firm with CE certification and undergoing FDA approval, should we wait for FDA approval before entering the Japanese market, or can we initiate PMDA approval simultaneously?

Our approach is to start investigating the PMDA (Pharmaceuticals and Medical Devices Agency) regulatory pathway in Japan, even while waiting for FDA approval, as it may be beneficial to start the local registration process in Japan in parallel to your FDA approval process. There are Pros & Cons to waiting for FDA approval before registering your product in Japan. Yet, these are to be considered in light of the following elements:

Does your company wish to own its Japan import licenses? Does your company have the financial resources to pay for the registration process? Does your company have an experienced regulatory team? Are you willing to allow your distributor to hold your import license? What are your ROI expectations, among other vital questions?

By addressing these common questions, we aim to provide valuable insights and solutions to empower foreign companies operating in Japan or seeking local partnerships. Successfully navigating the Japanese market requires a deep understanding of its unique dynamics, and Network in Motion Ltd. is here to assist you every step of the way, ensuring your business thrives in this dynamic and rewarding business environment.

For further assistance or to explore how we can support your specific business needs, don’t hesitate to contact us at info@network-in-motion.com.