3. FOREWORD
FOREWORD 3
This publication offers advice to When reading this booklet, the – The answer therefore is to use
help your company access the following points need to be borne the guidance given here as a
Japanese market, taking you in mind: template for your business
through the processes of – Japan is currently undergoing a dealings with Japan. As in every
preparation, visiting the market, period of considerable change, society, there will be those who
winning the business, and as it moves from a high-growth, do not fit the norm. But if in
establishing and maintaining protected economy to a mature, doubt, no-one will be offended
business relationships. It is intended open economy. The guidance if you follow the advice given
primarily for companies new to the given here relates largely to here.
market, but more experienced dealing with mainstream
exporters should also find it useful. Japanese companies which Above all, do not be put off
retain the traditional ways of tackling the Japanese market for
doing business. Newer, more fear of getting it wrong. The
entrepreneurial and younger Japanese do not expect foreigners,
companies which retain the especially on their first visit, to have
traditional ways of doing mastered all the rules of Japanese
business areas of business practice and etiquette. And
communications and e- if all else fails:
commerce – may not abide so
strictly by these practices. In – Be courteous
particular, their decision-making – Be patient
processes may be faster and less – Be sincere
hierarchical than those described
here.
– On the other hand, the pace of These three virtues will see you
change can be exaggerated. through most difficulties and
What change there is – for embarrassments.
example, the breakdown of the
jobs-for-life culture, and of
consensus decision-making – is
starting from a very low base. It
will take many years for these
changes to permeate through to
every level of Japanese business
and society.
4. 1 INTRODUCTION
Doing Business in Japan 4
Why Japan? Key facts about Japan – Japan’s population is ageing
rapidly as its birth rate declines
Despite its well-publicised economic – Japan is still the second largest and people live longer. This is
problems over the past decade, economy in the world, with a giving rise to new business
Japan remains a market of very GDP roughly as large as opportunities in welfare,
considerable importance for British Germany and the UK combined. healthcare and associated
exporters. It is the UK’s largest It accounts for some 51 per cent services. The Japanese are also
export market outside Western of the total Asian economy and becoming increasingly health-
Europe and the USA, with our 12 per cent of world GDP. conscious and aware of
exports rising by an average of 11 – With its population of 126 environmental issues, creating
per cent year since 1991. Those far- million, Japan is a highly- good opportunities for exporters
sighted British companies which educated homogenous and of sports and leisure goods,
have had the patience to take a affluent society, with the largest food products and
long-term strategic view of Japan private savings in the world. environmental services and
are now reaping the benefits. equipment.
– As increasing numbers of
There lies the key to success in Japanese people travel abroad, – Although the Japanese have a
Japan: it is not a short-term for both work and pleasure, they high reputation for the design
market, which companies can dip in bring back with them a taste for and use of technology, they
and out of depending on spare foreign goods and lifestyles. At recognise that they cannot
capacity and their other priorities. It the same time, British products produce all of the innovations
takes time and patience to establish and brands are becoming more themselves. There are
yourself in Japan. But as many widely known and available in opportunities for companies
British companies (large and small) Japan. A desire for with new
have found, it repays the effort improvements in the overall
many times over. – products and technologies in
quality of life and greater the software and mobile
individuality also create new communications sectors, either
consumer demands which by building relationships to
overseas suppliers are well enter the indigenous market or
placed to fulfil. Consumers are in partnership with Japanese
seeking value for money much companies to enter other
more than in the past. international markets. It is
estimated that the Japanese e-
commerce market alone will be
worth ¥6,662 billion by 2004.1
1 Source: E-com; Anderson Consulting
5. INTRODUCTION 5
– Deregulation over recent years
has opened up new
opportunities for foreign
companies in the Japanese
market, from
telecommunications to retailing.
While some may argue that, in
some sectors, the pace of
change is too slow, the process
of deregulation is firmly
established and is supported by
the Japanese government,
business and consumers. In the
meantime, Japanese industry
and commerce are having to
restructure to meet new
competitive pressures, and are
increasingly open to the notion
of buying from overseas.
– Above all, British companies
should forget their old
preconceptions about Japan
being a "closed" market. The
formal barriers to entry are now
no greater than in most other
advanced economies.
– Japan is indeed unique, with its
own traditional culture and
ways of doing business. But, as
the many British companies who
are successful in the market will
attest, it is by no means
impossible to enter the Japanese
business market. There is also a
wealth of information, advice
and help available from a variety
of sources, many of which are
referred to in this booklet.
6. 2 GETTING STARTED
Doing Business in Japan 6
THIS SECTION COVERS SOME OF THE THINGS YOU NEED TO KNOW
BEFORE YOU PLAN YOUR FIRST VISIT TO JAPAN, OR HAVE YOUR FIRST
MEETING WITH JAPANESE POTENTIAL CUSTOMERS OR PARTNERS,
EITHER IN THE UK OR ELSEWHERE.
Read, listen and learn It pays to keep in touch with the
Japan Unit. As well as gaining up-
Building and
While this booklet aims to be as to-date information on market maintaining
comprehensive as possible within
the space available, it is not a
developments and forthcoming relationships
events, you will have chance to
substitute for talking to others who One of the most significant
meet other people, both British and
know the Japanese market and differences between Western and
Japanese, who are directly involved
learning from their first-hand Japanese business practices is the
in UK/Japan trade and investment.
experience. In particular, talk to importance which the Japanese
This opportunity to build up your
people who know your sector, and place on developing and
network of Japanese contacts can
can give specific market-oriented maintaining long-term
be invaluable aid in developing
advice. Take (or create) relationships. This is the key to
your business in Japan
opportunities to meet Japanese doing business in Japan
business people here in the UK. Another good source of advice is
In your initial meetings, your
This way, you will start to get a feel the London office of the Japan
Japanese counterparts will be
for the way business is done in External Trade Organisation
looking primarily to establish a
Japan. (JETRO). JETRO is a semi-
personal relationship with you and
government trade-promotion body
Your first point of contact should your company. Only on that basis,
which, uniquely, encourages
be the Japan Unit of UK Trade & they believe, can good business
imports into Japan, as well as
Investment: either contact them relationships be developed. They
investment and other forms of
directly or through your local need to know that your company
industrial and technological co-
Business Link. They can put you in will be a good and reliable long-
operation. JETRO in London has a
touch with sector specialists – the term business partner. For this
well-stocked reference library, and
Export Promoters – who have a reason, your early encounters with
also runs several programmes to
wealth of knowledge and Japanese business people may seem
help British companies in the
experience of the Japanese market, to you to be unnecessarily long-
Japanese market.
and can tell you what other help drawn out and inconclusive. Be
and advice is available from the patient. Without these initial
British Embassy in Tokyo and the getting-to-know-you sessions, your
other commercial posts in Japan. business in Japan will go nowhere.
They will also be able to advise you
of any trade missions, buying
missions, trade fairs and other
Japan-related events which you
may be able to take part in.
7. DON’T LEAVE IT TOO LATE TO
RESEARCH THE MARKETS AND
MAKE APPOINTMENTS
GETTING STARTED 7
The decision-making While the process may be
cumbersome – and is in fact being
Presenting yourself
process abandoned or adapted by some When you meet a Japanese
The decision-making process in fleet-footed Japanese companies – business person for the first time,
Japanese companies evolves from the corollary is that, once the the first thing he or she will do will
middle management and filters decision is made, everyone almost invariably be to offer you a
upwards. Top-down decision- understands it and implementation business card, known as a meishi.
making is very rare. Everyone who can begin almost immediately. This will have his/her name,
will be involved in implementing British companies can be caught company name and job title, as
the decision has to be consulted out at this point: having delayed well as details of the company
and their agreement sought. Only the decision for weeks or months, address etc. Those used to dealing
then will the proposals be passed the Japanese will expect you to be with foreign companies will usually
on upwards to the next level, in a position to implement it have the same details in English on
perhaps for the process to start almost immediately. It is wise, the reverse side of the card.
again. In Japanese, this process of therefore, to try to stay in touch Between Japanese, the meishi
gaining a consensus is known as with progress on the Japanese side, enables each party to place the
nemawashi, literally digging around so as to be ready to go when you other person, and his/her company,
the roots of a tree prior to get the green light. in a social and business hierarchy. It
transplanting it. Do not be tempted to try to speed is the start of the relationship-
This all inevitably takes time. While up the process by appealing direct building process. In your business
it is going on, you have to be to top management over the heads dealings in Japan, you must be able
patient, responding as necessary to of those you are dealing with. This to reciprocate with your own
requests for further information. will cause confusion, offence and meishi. Without it, you are a non-
Sometimes you will be asked to further delays. person, of little consequence and
present your proposals several times easily forgotten.
At the same time, if an opportunity
to different groups of people within arises – for example, if one of your Your meishi should be of standard
the company. This may seem time- senior executives is visiting Japan, Japanese size (90mm x 55m)2 and
wasting and repetitive, but it or meeting the Japanese company translated into Japanese on the
ensures that all concerned have a in another context – it can be reverse side. Accuracy is essential:
chance to hear first-hand what you useful to tell their top management great embarrassment and mirth, can
are proposing – and to judge you that negotiations are taking place, be caused by an inaccurate or
as a prospective business partner. and to assure them of your clumsy translation. There are a
company’s commitment to a number of companies in the UK
successful outcome. If you do who can translate and produce your
decide to take this course of action, meishi before you go, including the
you must keep your day-to-day airlines which fly to Japan. If in
contacts informed of what you are doubt, seek advice from the Japan
doing, and why, it must be done to Unit.
smooth the process, not in a
desperate bid to hurry it up.
2 The size is more important that it might seem. Japanese use standard-sized file boxes to keep the meishi they receive. If yours is of an
odd size, it may be discarded.
8. Doing Business in Japan 8
Besides being a means of self- Presenting your The information you provide to
introduction, the meishi also serves Japanese companies should aim to
as a permanent record which can company increase their confidence in your
be filed away - with a note of You will need to consider how capabilities and help them to
where and when you met the much of your company literature understand your quality processes,
person, and some salient personal needs to be translated into production capacity and the
details – for future use. It is, Japanese in the initial stages of development of your technology.
however, important to remember your dealings with Japan. Cost is a You should be able to provide the
that the meishi is a representation factor here. Also, most Japanese are following:4
of the person who gave it to you: it able to read and understand – Product samples
should be received courteously and English better than they can speak
studied respectfully for a moment it. At this stage, attractively- – Product catalogues
before being put away. Do not fold produced English-language – Table of component ingredients
it or crumple it, and do not write materials, with just the key points and technical data
on it in the other person’s presence. translated into Japanese, will be – Outline of manufacturing
Your own meishi should be more impressive than poorly- facilities and production-related
presented in a similar respectful produced and poorly-translated data
fashion. materials in Japanese. There are,
however, no hard-and-fast rules on – Corporate profile giving a
this, and you should take advice. history of your company and its
achievements, including business
The materials you hand over at the in other comparable world
meetings will be studied and markets such as Germany and
discussed at internal company the USA
meetings as part of the consensus-
building process referred to above. – Details of any previous dealings
If they include colour visuals such you have had with Japan5
as photographs, charts and graphs,
so much the better; videos3 and
computerised presentations (eg on
(CD-ROMS) can also be very
effective.
3 If presenting videos to companies in Japan, remember that Japan uses the NTSC system, not the British PAL system. VHS is the most
common format.
4 Not all of these will be relevant to every company, eg those selling services or technology, but this acts as a check-list of requirements.
5 You should not, of course, divulge competitive information, nor draw unnecessary attention to any past failures in the market, but do
not hide any information which is anyway likely to become known, otherwise it will damage your reputation to truth and reliability.
9. GETTING STARTED 9
Price will often be the last issue to Making contact effect an introduction to a
be considered, especially when colleague in Japan. Or, he or she
selling industrial goods. Japanese All this presupposes that you have may suggest alternative contacts
companies are far more interested established contact with suitable for you to approach, and make the
in your company ethos, and interested Japanese companies, necessary introductions.
manufacturing methods, and are planning to meet them, in
Japan or elsewhere. But how do Similarly, you could get a colleague
technology and the reliability of the working in a similar or
supply chain. It is only once you identify and approach such
companies in the first place? complementary sector to yours to
questions such as these have been make an introduction to their
resolved that the subject of price is Japanese companies are not Japanese business contacts.
discussed. However, great reliance is responsive to "cold calling" and
placed on price stability, and rarely respond to direct approaches Other ways of meeting and getting
regular customers expect discounts from unknown people or to know some Japanese companies
of up to 20 per cent on list prices. companies. While trade directories before you go to Japan would
may help you to identify suitable include:
companies to approach, simply – Attending seminars and similar
writing to them to introduce events organised by UK Trade &
yourself and your company is Investment, local Chambers of
unlikely to produce a response. Commerce, Business Links etc.
Because of the importance which is This is an excellent way of
placed on relationships, it is always learning more about Japan and
much better to secure an meeting Japanese business
introduction to your target people, some of whom may be
company through a third party. able to make some introductions
Reference has already been made to for you.
the services of the Japan Unit of – Attending international trade
UK Trade & Investment. They can fairs in your product sector,
help you to identify suitable either in Japan or in other
companies and can effect countries where Japanese buyers
introductions for you, working in may be present as exhibitors or
close partnership with UKTI visitors. However, do not expect
colleagues based in Japan. to get firm orders at these
You can also make use of the many events: the Japanese mostly use
Japanese companies which have them for research and
offices and factories in the UK. A information-gathering, not for
telephone call to the appropriate buying. Be pro-active in
person in the London office of a following up any contacts you
Japanese trading company or make at such events, and call on
department store, for example, with them when you go to Japan.
a request for a meeting, is much Even if they are not themselves
more likely to be effective (and right for your company, they
easier) than a similar approach may be able to introduce you to
would be in Japan. If there is others who are.
interest, the person in London will
10. Doing Business in Japan 10
The Japanese Despite these changes, a number of
business practices which developed
Legal requirements
distribution systems under the more cumbersome While there are now very few
The Japanese distribution system is distribution system remain, and restrictions on what may be
traditionally long and complicated, British companies – especially those imported into Japan, there are –
with many middlemen between the selling consumer goods – need to as in any country – regulations on
manufacturer/importer and the be aware of them. The main ones standards for consumer protection.
consumer or end-user. This has are: There are also some prohibited
inevitably had the effect of raising imports. The main categories of
– Providing long-term credit prohibited or regulated products are
prices. More recently, however, the
system has become somewhat less – Accepting orders for small lots listed below. Always check to see
complex, under the pressure of or swift response to orders (since whether there is legislation covering
foreign retailers such as Toys R Us floor space is often limited) your products (the Japan Unit can
and increasing consumer demand – Allocating dedicated sales staff advise on this).6
for lower-priced quality products. to accept orders and give advice
Department stores and on product range and store
supermarkets, in particular, have management Prohibited imports
adopted simplified distribution – Rewards for reaching sales Live animals; fake famous brand
systems and are increasingly buying targets (eg travel vouchers or goods and pirated products;
direct from manufacturers. Similarly, concert tickets). counterfeit, forged and imitation
an increasing number of small and currency; stocks and bonds; plants
medium-sized wholesalers and stipulated under the Plant
retailers have started to import their Quarantine Law; arms and
own goods in an attempt to reduce ammunition and drugs.
their costs. Imports subject to consumer
protection legislation: electrical
goods, gas appliances, automobiles,
foodstuffs, food additives,
pharmaceuticals and cosmetics.
6 Information on Japanese customs tariffs and clearance procedures can also be obtained from JETRO London
11. 3 WORKING WITH THE JAPANESE
WORKING WITH THE JAPANESE 11
Meetings – Because of Japan’s age-based
promotion system, the oldest
– The Japanese always seek to
avoid confrontation, so open
As we have already indicated, your person in the room will usually disagreement should be avoided.
initial meetings in Japan are an be the senior one. Note how the Be aware that a silent response
important part of the relationship- others defer to him, and do the to a point of issue during a
building process. How you present same. However, he may well meeting can mean unspoken
yourself and your company in these take little part in the discussion, disagreement or opposition. Do
early stages can make the and will leave his junior not press the point: take not,
difference between success and colleagues to do most of the and move on.
failure in the Japanese market. talking.7 – If the meeting is being
Much has been written and said on – At the start of the meeting, you conducted in English, without
the conduct of meetings with will exchange business cards the use of an outside interpreter,
Japanese, but the advice can be (meishi), as described previously. be aware that the person doing
reduced to a few simple rules; Do this with due respect and all the talking – the best English
– Remember that, at this stage, formality. During the meeting, it speaker – may not be the most
the meeting is for the parties to is useful to spread the cards out important person there or the
get to know one another and to (discreetly) in front of you, so one you most need to convince.
exchange information; it is not that you identify each person on – Blowing your nose in public is
the start of negotiations. the Japanese side. considered impolite in Japan, so
Nevertheless, be careful not to – Prepare a short opening avoid doing so during meetings
concede here anything that may statement beforehand, which (or elsewhere). If you must, wipe
be important to you later on. can deliver once the you nose discreetly and quietly
– Meetings are generally held in introductions have been made. with a tissue.
separate meetings rooms, both This need say no more than that – Do not slump back in the chair,
in people’s offices. The hosts you are grateful to your hosts or cross your legs; sit upright
and visitors usually face one for giving up the time to meet and look attentive.
another across the table. (This is you, how pleased you are to be
also true when entertaining or in Japan, etc. It is also useful to – The Japanese keep their
being entertained in Japan.) have a more substantive emotions in check, especially in
statement ready to use when business, and expect others to
– Do not be surprised if you are do the same. Do not under any
outnumbered by your Japanese the initial pleasantries are over.
This should outline why you are circumstances show anger or
hosts, some of whom may say irritation. This will diminish you
nothing and seem to play little meeting the company and what
you hope to achieve. Be low- in their eyes and suggest that
part in the proceedings. This is you are an unreliable business
usual in Japan, and is part of key: don’t be boastful about
yourself, your products/services partner.
the consensus-building process.
or your company. Confine
yourself to a few key points at
this stage, and don’t seek, or
expect, a substantive response.
7 Hierarchy within companies is still very important in Japan. At a meeting with outsiders, Japanese managers will not contradict one
another – especially senior to them – not engage in debate amongst themselves as often happens at Western-style meetings. If they
have contrary opinions, they will save them for later resolution within the company.
12. Doing Business in Japan 12
– Keep an eye on the clock, and Communication – Be prepared to repeat what you
try not to over-run your allotted have said in a different way, to
time, especially at initial Much communication between make sure you have been
meetings – both for your hosts’ Japanese is indirect, implicit rather understood.
sake, and to avoid being late for than explicit, and non-verbal.
Added to the difficulties of the – Use less eye contact than would
your next appointment. be normal in a meeting with
Japanese language itself and the
– At the end of the meeting, lack of English ability on the part Westerners.
agree with your hosts what the of many Japanese, this makes it – The Japanese do not find
next steps are – who will do hard to be sure in Japan that you silence embarrassing, and it
what, when etc. Even if this is have correctly understood what is gives them time to collect their
no more than an agreement to being said (or not said) and that thoughts and give considered
meet again, be sure who is to you yourself have been correctly responses. Avoid the temptation
take the initiative. understood. to fill in by talking (or, even
– When is it time to leave, repeat The guidance which follows is worse, by making unnecessarily
your thanks to the senior person intended primarily for meetings, concessions).
present and express the hope but is applicable in your other – Don’t monopolise the
that you will stay in touch (or business and social dealings in conversation. Remember that
whatever has been agreed). Japan. the point of the meeting is to
– If you have gifts, this is the time – Do not take nods or repeated get information as well as to
to hand them over. "yes" (or hai in Japanese) to give it. Allow your Japanese
mean agreement with what you hosts time to respond, and listen
are proposing. This merely to what they saying. Let them
indicates that they are hearing finish what they are saying, and
and noting what you say, not don’t interrupt. When you
necessarily agreeing with it. answer their questions, stick to
the point.
– Direct negative expressions like
"no" are rarely used: but for a – The Japanese have a good sense
Japanese to say that something of humour. If the meeting is
is "difficult" is tantamount to a going well, humour will often
negative reply. come naturally out of the
conversation, but don’t force it.
– When speaking in English, be Funny stories and jokes are
clear, and concise; speak more usually un-translatable,
slowly than usual; do not use linguistically or culturally.
complicated sentence structures, Sarcasm and facetiousness are
double negatives et ("not not understood.
inconsiderable"), double
questions (eg "You do, don’t
you?), or rhetorical questions;
avoid colloquialisms and slang;
and avoid jargon unless your
Japanese hosts area in the same
business and you can be sure
they will understand it.
13. WORKING WITH THE JAPANESE 13
Interpreters – Speak to your Japanese hosts,
not to the interpreter (eg "What
Written
It is a delicate decision whether or do you think?", not "Ask Mr communications
not to take a professional Suzuki what he thinks.") Because of the importance attached
interpreter to the meeting, to personal relationships, the
especially initial meetings when you – Ensure that the interpreter, and
your Japanese host, have Japanese prefer face-to-face
do not know one another. Taking contacts where possible – though
an interpreter might offend if the finished what they have to say
before continuing the of course in dealing with
company prides itself on its staff’s companies outside Japan, written
English abilities; not taking one discussion.
forms of communication will be
might render a meeting totally – After the meeting, take time to unavoidable. The preferred form of
unless if there is no English-speaker de-brief your interpreter on written communication is the fax,
available. It is best to take advice, what he/she thought went on at followed, increasingly by e-mail.
perhaps from whoever introduced the meeting. They can give you Letters are best reserved for
you to the Japanese company in a "cultural" interpretation, substantive, formal
the first place. They may be able to including non-verbal signals. communications.
make enquiries on your behalf. If They can also advise you if, for
you set up the meeting yourself, example, a phrase which, when When communicating with a
there is no harm in asking the translated into English, seems Japanese company in writing, apply
company directly. If in doubt, err like a positive response, actually the rules shown above as
on the side of caution and take an means that the Japanese side appropriate. Use simple words and
interpreter. are not interested. The phrases and short, uncomplicated
interpreter – especially if you sentences.
For those unused to using
interpreters: use the same one for a series of Because of the preference for the
meetings or visits – can be a spoken word, the Japanese often
– Meet the interpreter for 30 useful ally. seem slow to respond to written
minutes or so (at least) before communications and are reluctant
your meeting to brief him or to initiative correspondence.
(more often) her on your Japanese companies do not usually,
company, the company you are for example, send progress reports
meeting, what you plan to say to tell you what is happening, or
and what you want to achieve. send interim replies. The view
Go through any unusual words usually is, if there is nothing much
or technical terms that may to say, say nothing. While this can
come up in the meeting. be frustrating, a lack of a written
– When speaking through an communication should not
interpreter, speak clearly and necessarily be viewed as a lack of
slowly, stopping every minute or interest. But it is well to keep up
so to give the interpreter a the flow of correspondence from
chance to put your points your side, within reason, so that
across. Speak in "paragraphs", contract is not lost.
not single sentences or phrases.
Numbers are best written down
for clarity.
14. Doing Business in Japan 14
Telephones respond positively: it’s a good
opportunity to get to know your
– For initial meetings, a simple
corporate gift is sufficient –
Because of the danger of Japanese hosts better, and to perhaps branded goods with
misunderstanding, linguistically and understand more about Japan. your company logo. Overly
culturally, the use of the telephone expensive or lavish gifts might
should be confined to simple – If you are the host at a formal
event, be ready to say a few cause embarrassment, as they
matters, such as personal greetings have to be reciprocated.8 Be
or meeting arrangements etc and words of welcome at an
appropriate point. If you are aware that Japanese government
even then a fax or e-mail officials are now banned from
confirmation is advisable. being entertained, you will be
expected to respond. accepting gifts (or
entertainment) of more than
– Problems sometimes arise when nominal value.
Japanese etiquette first meeting a Japanese person
Again, observance of some simple over whether to how to bow or – The suffix – san is added after
rules will help ease relationships in shake hands. At the start, Japanese names to mean Mr,
Japan. These are not complicated, especially in business Mrs, Miss or Ms. Within a
and in many cases represent no relationships, it is better to company, people are known by
more than good sense and good shake hands. If you bow, a slight their name and job-title e.g.
manners. inclination of the head and Suzuki-bucho for Mr Suzuki, the
shoulders is sufficient. Whether Department Head. When
– Punctuality is a cardinal virtue speaking in English, however, Mr
in Japan. Try to arrive at least bowing or shaking hands, do it
decisively to avoid embarrassing (or Mrs/Miss/Ms) Suzuki is
10 minutes early for any preferable. Never use – san
meeting or social occasion. confusion.
when referring to yourself at
When giving a lunch or dinner, – The giving of gifts is a high- your company colleagues.
or if you are the host at a developed art form in Japan. Japanese should not be
reception in Japan, be at the The manner of giving the gift is addressed by their first names
venue at least 15 minutes as important as the gift itself. unless they invite you do so.
before the starting time to be Gifts should be neatly wrapped
ready to greet your guests. (your hotel in Japan can usually
Japanese have a habit of do this for you), and presented But finally, remember the advice in
arriving early. with some ceremony and the Foreword: don’t be
– Apart from after-hours drinking humility. If you receive a gift, do overwhelmed by the need to abide
in night clubs or bars, not unwrap it immediately by the minutiae of Japanese social
entertaining tends to be rather without asking the host’s etiquette. Just do your best.
formal. Business entertaining is permission. If you do unwrap it,
always down in hotels or try to take the paper off neatly,
restaurants, and an invitation to without tearing it.
a Japanese private home is a
rare honour. If you are invited
out, for a drink or a meal, try to
8 When you become a frequent visitor to Japan, keep a note of what you gave to whom, and what you received, so as not to duplicate
gifts.
15. 4 WINNING THE BUSINESS
WINNING THE BUSINESS 15
HAVING SATISFACTORILY NEGOTIATED YOUR FIRST VISIT TO JAPAN, HOW
DO YOU FOLLOW UP, MAINTAIN CONTACT AND, HOPEFULLY, WIN THE
BUSINESS? CIRCUMSTANCES WILL OBVIOUSLY VARY FROM COMPANY TO
COMPANY, AND SECTOR TO SECTOR, AND IT IS NOT USEFUL TO BE TOO
PRESCRIPTIVE AT THIS STAGE. THE FOLLOWING POINTS ARE DESIGNED TO
PROVIDE A FRAMEWORK FOR ACTION.
Following up the visit Repeat visits If your core team does not include
your chief executive or someone of
On your return, write to all the key In view of the Japanese preference equivalent stature, it is important
contacts you have met to thank for face-to-face communications, that he or she should go to Japan
them for their time. While this is you need to be prepared to make a at appropriate times – for example,
intended primarily as a courtesy, number of repeat visits to Japan to to sign key agreements – so as to
the opportunity can be taken to push the business forward, however demonstrate your company’s full
refer to – and confirm – any slow progress may seem. How often commitment to the Japan Unit.
agreements that were reached on this needs to be done will depend
future action by either party. on individual circumstances, but if
Set in train any action to which you are serious about Japan – and
you have committed yourself during want to show the Japanese that Choosing the right
the visit – providing additional you are serious about Japan – you partner
information, making contacts, etc. should be thinking in terms of one
visit every six to 12 months at Your initial or subsequent visits will
Given the likely delays on the hopefully have identified several
Japanese side, ensure that you fulfil least. As the pace of the discussions
(hopefully) increases, it may need companies, which seem interested
your part of the bargain as quickly and suitable. Only you can decide
as you can. You need to keep the to be more often than that.
which one is best for you, but you
momentum, and the relationship, Who should go? Because of the may want to talk to some of the
going. importance placed on personal experts (e.g. in the Japan Unit)
relationships, it would obviously be before making a decision.
counter-productive to send an ever-
changing array of company
representatives. There should be a
core team, maybe consisting of
only one or two people in a small
company, who should participate in
all visits wherever possible.9
9 As the negotiations move into the discussion of technical points, more expert-to-expert contact may be required, but the core team
should always be in the background to provide continuity and hold the relationship together.
16. Doing Business in Japan 16
Beyond that, there are two general – In Japan, as much importance is – When quoting prices for goods,
points to make: placed on the negotiations that it is best to quote the f.o.b.
– Do not jump at the first led up to the signing of the price or yen equivalent prices,
company, which shows an contract as on the contract rather than the ex-factory price.
interest. There is no harm, itself. The contract is a symbolic This makes it simpler for
within reason, in keeping several document, confirming an Japanese companies to calculate
candidates in the running until existing relationship. If there is how much a product can be
a final decision is made. But in disagreement about the sold for in Japan. Ensure that
that case, to avoid accusations contract, it’s sign that there is there is agreement on the
of bad faith (which could something wrong in the exchange rate to be used, and
damage your reputation in the relationship. who will bear transaction costs
market-place), each company – Some parts of a deal (e.g. on and exchange rate risk.
needs to be aware that it is only after-sales service, or a – The actual point of delivery of
one of several options you are commitment not to raise prices goods can cause confusion.
pursuing. for a given period of time) may Most Japanese companies
– Do not be tempted to sign up be taken as read since they are consider delivery to the loading
with a company just because part of normal Japanese port or specified airline as actual
they have a fluent English- business practice, and may not delivery. However, you may be
speaker with whom you can be written into the contract. asked to provide a guarantee in
communicate easily. While this is Make sure that you and your case there is a delay in
an undoubted advantage, the more prospective business partner unloading at a sea point within
important point is how well the have the same understanding of Japan. To avoid confusion, it is
company knows your market what is being agreed. best to confirm exactly when,
and can communicate with your – Once the contract is signed, the during the passage to Japan,
potential Japanese customers. Japanese will feel themselves delivery is considered to have
bound by the relationship of taken place.
trust which it signifies, rather – Since business in Japan is
Negotiating the than the formal agreement – conducted on the basis of
and will expect you to do the mutual trust between the
contract same. If disagreements arises, parties, there may be no written
It is neither possible nor the Japanese will expect them contract at all. You must judge
appropriate to offer comprehensive to be resolved by discussion and whether to accept this situation,
guidance here on negotiating mutual agreement, not by but it is probably wiser in most
contracts with the Japanese. You reference to the precise wording cases to insist, politely, on some
will need to take expert advice on of the contract. Similarly, even form of written agreement,
this when the times comes. matters clearly set down in a however simple.
However, some general points can contract may be altered by
be made: subsequent agreement between
the parties concerned.
– Remember all the guidance
given so far on how to deal
with the Japanese. It will apply
equally, or some so, in contract
negotiations.
17. 5 MAINTAINING THE RELATIONSHIP
MAINTAINING THE RELATIONSHIP 17
YOU HAVE SUCCESSFULLY NEGOTIATED YOUR CONTRACT WITH YOUR
JAPANESE PARTNERS, AND BUSINESS IS STARTING TO FLOW. THIS IS
NOT, THOUGH, THE TIME TO PUT THE RELATIONSHIP ON HOLD. THE
JAPANESE NEED TO BE CONSTANTLY REASSURED OF YOUR CONTINUED
COMMITMENT TO THEM AND TO THE MARKET.
Delivery, quality and Within industry, most Japanese
manufacturers order parts and
To cover themselves, many
Japanese firms will start doing
reliability materials to fit in exactly with their business with foreign companies on
By far the most important aspect of production schedules (the Just-in- a small scale, gradually expanding
this continued commitment is that Time, or Kanban, system). Delays in their orders once they have
you should fulfil your side of the delivery can severely disrupt confidence in the other party’s
contract, as the Japanese interprets production lines. This is why ability to deliver.
it. This means, above all, that you Japanese manufacturers are quite Those companies, which provide
deliver the goods or services precise about when they need services or technology rather than
promised reliably, on time and to goods to be delivered, even physical goods, need to be no less
the approved quality (which, in specifying the time of day in some punctilious in meeting their
Japan, means nothing less than the cases. obligations regarding time, quality
highest quality). No amount of Consumers and industrial customers and reliability.
relationship-building activities will alike are very particular about
be effective if these simple criteria quality and will not buy
are not met. substandard products, no matter
On-time delivery is not just a what their price. Japanese importers
matter of convenience. There are will often return a shipment of
important cultural reasons for this products if it is judge to be
fastidiousness. One is that the substandard. Zero tolerance means
seasons in Japan each have a zero tolerance.
distinct flavour and many products Reliability too is important in
are distributed only at set times maintaining stable business
during the year. Thus, delays in the relationships. It is this emphasis on
delivery of consumer goods can reliability that has caused Japanese
mean that sales suffer and they companies to use predominantly
may even become unsaleable, domestic products in the past, even
especially those needed for the if prices were higher. You have to
twice-yearly gift-giving seasons convince your Japanese partner
(New Year and mid-Summer). that you are no less reliable than a
domestic supplier.
18. Doing Business in Japan 18
Keeping in touch While "dropping" on your Japanese
partners 6,000 miles away is clearly
If it all goes wrong…
In Britain, business calls on a client not practical, you too need to If, despite all your efforts and
are rarely made without a specific ensure that you remain visible and despite taking the best advice
purpose in mind, and rarely without in touch. Maintain your visiting available, the relationship does go
an appointment. In Japan, suppliers programme even if things seem to wrong, you need to extricate
make regular calls on their clients, be going well (and even more if yourself as amicably as possible. A
even when there is nothing specific they seem to be going badly). messy and acrimonious separation
to discuss. This regular exchange of Invite your Japanese partners to will damage your reputation in the
information helps achieve a deeper Britain to see your company in market place, and will make it hard,
understanding of each party’s views action, or arrange to meet in third if not impossible, to establish new
and ambitions, forestalls problems countries, e.g. at trade fairs. relationships with new partners.
and builds on the spirit of co- Exchange Christmas or New It is very rare for business disputes
prosperity as partners. Such Year Cards. to end up in court in Japan, and if
relationships experience fewer they do they take years to settle.
problems and minimal complaints. Often the relationship can be
maintained by doing personal This is not a realistic option if you
favours, for example helping the want to stay and be successful in
Japanese chief executive’s son or the market. It is better to cut your
daughter to find a language school losses with as much good grace as
in Britain, or asking for a Japanese possible, and start again.
colleague’s help in arranging However, by keeping your Japanese
a Japanese home-stay for a relationships in good order, as
British friend. suggested here, you make it much
less likely that you will be faced
with this situation. Even in the
worst case, you should have been
forewarned of potential problems,
and been able to resolve them
before the relationship breaks
down.
19. 6 SOURCES OF HELP AND ADVICE
SOURCES OF HELP AND ADVICE 19
Organisations Japan External Trade Organisation Business Links
The Japan External Trade A regional network of business
Organisation (JETRO) is Japan’s support organisations in England,
Japan Unit, semi-government trade promotion
UK Trade & Investment providing advice and access to
organisation, which provides help government support, including the
Japan Unit offers a wide range of for exporters to Japan. It produces delivery of export trade services.
help, advice and practical support a number of publications and Business Links have International
in doing business with Japan, in videos on the Japanese market, Trade Advisers whose role is to help
partnership with the British including sector-specific market exporters in their area. To find your
Embassy in Tokyo and the British reports. These are available from local business link, see our website
Consulate-General in Osaka, the JETRO’s London office, which has a (www.trade.uktradeinvest.gov.uk/loc
British Consulate in Nagoya and well-stocked reference library. There al/local.shtml)
the British Trade Promotion office are also programmes to introduce
in Fukuoka. selected exporters and potential Exporters in Scotland should
investors to the Japanese market. contact Scottish Trade International
Japan Unit, UK Trade & Investment on 0141 248 2700
5th Floor, Kingsgate House JETRO operates Business Support (www.scottishdevelopmentinternatio
66-74 Victoria Street Centres in Tokyo, Osaka and other nal.com/pages/index.asp)
London SW1E 6SW major Japanese cities. These provide
free short-term office In Wales, contact Welsh Trade
Tel: 020 7215 4253 International on 029 2082 5097
Fax: 020 7215 4500 accommodation and support
services to visiting foreign business (www.walestrade.com/index.htm)
www.uktradeinvest.gov.uk
executives. In Northern Ireland, contact Invest
JETRO London, Leconfield House Northern Ireland:
Export Promoters Curzon Street (www.investni.com/index.html)
The Export Promoters work within London W1J 5HZ
Japan Unit. They are experience Tel: 020 7470 4700
industry experts seconded from the Fax: 020 7491 7570
UK Trade & Investment
private sector to provide a business www.jetro.go.jp Information and Library
perspective on developments in
Japan. They can provide general
Centre
advice on doing business in Japan, A free self-service reference library
and on specific market sectors. for exporters is located at the UK
Trade & Investment Headquarters
at Kingsgate House, containing
statistical and market information
on Japan and other countries. If
you are unable to visit the library,
research can be undertaken on your
behalf by a professional researcher at
a cost of £40 (+VAT) per half hour.
Opening hours:
Monday – Friday 9:00am – 5:30pm
Tel: 020 7215 5006
Email: library@dti.gsi.gov.uk
20. Doing Business in Japan 20
Practical Assistance – Export Marketing Research
Services (EMRS)
Helping you visit Japan
The British Chambers of – and bringing Japan to
– Overseas Market Introduction Commerce (BCC) run an export you
Services (OMIS) marketing research service, on
This is a report produced to behalf of UK Trade &
your requirements by UK Trade Investment, for companies with – Trade missions to Japan
& Investment staff in Japan. fewer than 500 employers. Trade missions are an excellent
These can include market Professional researchers advise way to visit the Japanese
information, assessment of on how to carry out marketing market, especially for
potential local representatives, research for Japan (and other newcomers, who benefit from
customised local contact lists, export markets) and help draw the advice and support of more
market assessments for your up specifications for work to experienced participants. Grant
product, and advice on how to be carried out by your in-house support is available when
approach the market. Initial staff or by a professional travelling as part of a sponsored
briefs should be submitted via consultant. Grants for up to mission. Full details of
your local Business Link. 50 per cent of the costs forthcoming missions are
are available. available from the Japan Unit.
– UK Trade & Investment Sales
Industry organisations interested
Lead Service Export Marketing Research
in taking missions to Japan
This free service automatically Scheme
should telephone 020 7215
sends details of export The British Chambers of
4253.
opportunities by e-mail to Commerce
participating UK companies. 4 Westwood House – Programme arranging service
Information is given on specific Westwood Business Park If you are visiting Japan, staff at
export enquiries, as well as COVENTRY the British Embassy in Tokyo
details of tenders, joint ventures, CV4 8HS and the British Consulate-
multilateral agency projects and General in Osaka can arrange
Tel: 024 7669 4484
early notice of potential programmes for you to visit
Fax: 024 7669 5844
projects. Information is also Japanese companies relevant to
given on market-specific seminars your business, and make the all-
and similar events. See the UK important introductions for you.
Trade & Investment website at Contact your nearest Business
www.uktradeinvest.gov.uk for Link for information.
information on how to register.
21. SOURCES OF HELP AND ADVICE 21
– Meeting Japanese buyers in – JETRO Export to Japan Study British Industry Centre
Britain Programme
UK Trade & Investment have a JETRO invites selected foreign The centre provides low – cost
number of programmes to invite company representatives to office accommodation and support
Japanese buyers to the UK to Japan to take part in group services for British companies newly
meet potential suppliers in visits to give them a first-hand establishing themselves in Japan.
specified market sectors. In understanding of the market
addition, there are events to and to make business contacts. Contact in Japan
bring together British suppliers Contact JETRO London (address
and Japanese company above) Yokohama Business Park West
representatives based in the UK Tower
– Japan Industry Insight 11th Floor
or elsewhere in Europe. Contact Training Programme
the Japan Unit for details of 134 Godo-cho, Hodogaya-ku,
The EU-Japan Centre for Yokohama 240-0005, Japan
forthcoming events. Industrial Co-operation runs
– Seminars in the UK short training programmes in Tel: 00 81 45 334 1300
Working with Industry bodies – Japan for senior manager. Fax: 00 81 45 334 1301
e.g. Business Links, Chambers of Grants are available to help
Commerce, Trade Associations – SMEs to take part.
Contact in the UK
the Japan Unit arranges Tel: +81 (3) 3221 6161
conferences, seminars and Mr Robin Sloan
Fax +81 (3) 3221 6226
workshops on the opportunities Adviser – Investment in Japan
www.eujapan.com
for trade and investment in Japan Unit, UK Trade & Investment
Japan. These are especially – Executive Training Programme 5th Floor, Kingsgate House, 66-74
useful before you travel to in Japan (ETP) Victoria Street, London SW1E 6SW
Japan. Contact the Japan Unit This EU-funded programme
Tel: 020 7215 4253
to be kept informed of their offers managers of European
Fax: 020 7215 4500
events programmes. companies the opportunity to
spend 12 months’ in Japan
– Exhibitions and Seminars in learning the Japanese language
Japan and culture, followed by six
The Japan Unit supports British months’ placement with a
companies taking part in Japanese company.
international trade fairs and
seminars in Japan. Tel: 0870 070 8000
Fax: 020 8335 7000
Email: etp.uk@shlgroup.com
www.etp.org
10 A separate booklet on the British Industry Centre is available from Japan Unit
