How to enter a new international market
Why you should enter the Japanese market
How to find business partners and vendors in Japan
How to choose & work with a Japanese business agent successfully.
What is A Country Manager and How To Hire One?
Traits of a successful Country Manager
1. How to enter a new international market
When you enter a new international market, you want to gain local insights first to determine the market opportunity. Here are things to ask yourself when you start planning to enter the new international market.
i. Define The Market
One of the greatest lessons learned from this Silicon Valley Fintech Entrepreneur was that In the beginning stage, it is all about learning the customer needs and finding the product-market fit. You'll want to consider the demographics, location, and common interests or needs of your target customers. For your idea to work, the first thing you need is for other people to care about it. If you are the only potential customer for your idea, your business isn’t going to get very far. Other people need to want to buy what you’re selling. In other words, there needs to be demand for your product. This is where demand validation comes into play. Demand validation is the process of making sure that other people are willing to part with their hard-earned money to buy what you’re selling.
Here are the questions you can ask to define market demands and customers' needs.
What problem do my potential customers have? What’s the solution to that problem? Why would people pay money for my product?
Tools You can use:
1. SEO Using tools like Google’s Keyword Planner and Moz’s Keyword Explorer, you can see how many people search for specific words and phrases. You’ll want to think about what people might search for when they’re looking for solutions to the problem you’re trying to solve, so create a list of searches related to both the problem and your specific solution.
2. Create a list of places where potential customers spend their time. based on this list, come up with online communities and join the conversation. Next, take a look at online forums and other services where your potential customers might hang out and discuss problems and solutions related to what you’re doing. For example, if you’re starting a restaurant, check out Yelp and other review sites. Look for Facebook groups for foodies in your area. What are people talking about? Are they happy with the current options? If they’re not satisfied, what are they looking for?
3. Actually talk to your potential customers. Start by reaching out (phone, email, Facebook message, LinkedIn InMail, and so on) to people who are writing blog posts about things related to your products/service. You can directly start a conversation like:
“Hi—I really enjoyed your blog post about XXX. I especially liked [insert what you liked here].
I was wondering what you recommend to manage [insert the problem to the solution you are solving with your products/service here]. Is this a problem you have? Are there solutions that you recommend for solving this problem?
Thanks again, and keep the great blog posts coming!”
Now, not everyone will reply to you, but hopefully, you’ll get a few responses. That’s why you need to have a big list of potential contacts. If you completely strike out, you might need to go and look for new locations where your potential customers hang out, or you might need to go back and take a second look at your problem statement. It’s possible people don’t have the problem you think they have.
Of the people that do respond, you’ll get two types of responses:
“I haven’t heard of that problem and don’t have it myself.” “I know a bunch of people who have that problem. Here’s what I do to solve that problem and here’s what I tell other people to do who have that problem.” If you get a bunch of the first answer, you’re going to be headed back to the drawing board to work on your idea and come up with a new set of guesses that you need to validate.
Hopefully, you get lots of responses that fall into the second category. In that case, you’re going to want to follow up and talk more about your solution:
“Thanks for getting back to me! I’m really interested in how people manage XXX. In fact, I was thinking about building a tool for [the solution you are solving.]
I’m imagining a product where people can do x,y, and z with fewer headaches.
Do you think a product like that would be interesting to you or other people in similar situations? If it cost $20 per month, do you think you might be willing to give it a try?
Thanks again for your time!
By talking to people like this, you can gain actual market insights and feedback around your product/service.
4. Finally, this can be your final test, you’ll build out a landing page for your product and buy some ads on Google and/or Facebook. Your landing page doesn’t need to be fancy, but it needs to look real.
ii. Perform Market Analysis
Expanding into new markets involves a great deal of market research in addition to target customers. You'll want to develop an in-depth understanding of market growth rates, forecasted demand, competitors, and potential barriers to entry.
Here are the questions you can ask to understand market growth rates, forecasted demand, competitors, and potential barriers to entry.
When you look at the opportunity of the market, you can think of it with Porter’s Five Forces. Porter’s Five Forces is a framework that examines the competitive market forces in an industry or segment. It helps you evaluate an industry or market according to five elements: new entrants, buyers, suppliers, substitutes, and competitive rivalry.
1. How easy is it for a new business to set up a shop?
2. How many competitors do you have who are doing the same thing you are doing?
3. How likely is it for customers to switch to alternatives?
***The industry is always competing with another industry producing a similar substitute product. Substitutes can take two forms – products with the same function/quality but the lesser price, or products of the same price but of better quality or providing more utility. If there are too many companies producing substitutes, that could add to the cost and risk for your business
4.How much power do suppliers have - if any?
*** If the industry relies on a small number of suppliers, they enjoy a considerable amount of bargaining power. This can particularly affect small businesses because it directly influences the quality and the price of the final product.
5. How much power do customers have?
***The complete opposite happens when the bargaining power lies with the customers. If consumers/buyers enjoy market power, they are in a position to negotiate lower prices, better quality, or additional services and discounts. This is the case in an industry with more competitors but with a single buyer constituting a large share of the industry’s sales.
iii. Assess Internal Capabilities Much of your decision on how to enter a new market (build, buy, or partner) is driven by an internal capabilities assessment. During this stage, you should ask yourself questions like: How much of our core competencies can we leverage? Do we have sales channels/infrastructure/relationships in place?
iiii. Develop Market Entry Options Once you've selected an attractive market, you'll want to determine the appropriate level of organic investment vs. expanding through a series of acquisitions (or some combination of the two). If you have complementary infrastructure or sales channels in place, you might want to consider an organic approach to growth. If you are entering an entirely new market, with limited core assets to leverage, you should consider a joint venture/partnership, acquisition, or even finding a service vendor to do your job, this is where your business agent can help to find the right service to connect! The most important thing here is to be very clear about your options around cost, risk, and predictability of your act of entering the new market.
2. Why you should enter the Japanese market
Get a feeling for the size of Japan’s markets
world’s third-largest GDP, Japan represents about 10% of the world’s economy
25% of the world’s high-tech products are made in Japan, 30% of all cars are made by Japanese brands
Japan’s top 8 electronics makers’ annual revenues are about as large as the economy of The Netherlands
Japan’s smartphone games sector is the world’s largest in terms of cash revenues
You’ll find more in Gerhard Fasol’s talk at Stanford University.
The following graph is "The number of foreign-affiliated firms operating in Japan and the year-to-year increase of these firms, Source: Teikoku Databank"
Reason One. With the happening of the Olympics in 2021, Japan is expecting to have 3.5+ Trillion Yen from foreign visitors.
Reason Two. With the happening of the Olympics in 2021, Japan is expecting to have 20 + million people visiting from outside of the country which is more than the number of people who visit England in a year in the regular year which will stimulate the Japanese economy.
Reason Three. Economical goals in Japan are 1.boosting domestic demand, incre