The Challenges and Benefits of Doing Business in Japan

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When aiming for global growth, many companies set their sights on Japan as the ultimate international expansion destination – and with good reason. The country is a major hub for cutting-edge technology, business and industry, and it can prove to be an extremely lucrative market. However, expanding to Japan also comes with a distinct set of cultural and logistical challenges that require expertise and a well-planned strategy to overcome. Here, the expansion experts at Galvin International explain these issues and weigh them against the benefits of doing business abroad in Japan.

The Challenges

Language difficulties

Perhaps the most obvious challenge of expanding to Japan is dealing with the difference in language. Though some Japanese companies have adopted English as their corporate language [1], you’re likely to do business with Japanese-speaking partners – and this will mean employing translators and using translation software as a part of your everyday operations.

Cultural barriers

Understanding and dealing with cultural differences in business practices is also a significant obstacle. As in many countries, business culture in Japan is changing as more international companies enter the market, but it is still deeply entrenched in tradition and takes time and experience to get used to. Etiquette is highly valued. Before you dive into business in Japan, educate yourself on cultural sticking points such as punctuality, hierarchy, the distribution of business cards and gift-giving.

Unfamiliar practices

When doing business abroad in Japan, you’re likely to encounter unfamiliar practices such as the requirement of seals, a kind of official stamp serving as a signature, in the registration of a company. A business seal needs to be government-approved, and its design specifications are particular and highly regulated. It is important to ensure that you’re aware of these unique practices before you attempt to expand to Japan, so you don’t face any setbacks as a result of ignorance.

Rigid employment models

In Japan, the traditional employment model sees workers remaining dedicated to a single company for the entirety of their careers. This can be beneficial in that any employees you hire are likely to show a strong sense of commitment to your business. However, it can also pose a challenge: many companies doing business with one another have long-standing relationships, making it difficult for you to establish your company as a viable partner.

The Advantages

If you’re able to tackle the challenging aspects of doing business in Japan, you can take advantage of many impressive benefits. The country has highly developed infrastructure, a growing market of big-spending consumers, access to the most innovative technology and an educated and dedicated workforce. Furthermore, it poises your business for future expansion into the wider Asian market and gives you invaluable experience of working through cultural differences.

Galvin International’s international expansion concierge service makes expanding to Japan and beyond as seamless as possible. Our team of experts walks you through each step of the expansion process, from finding the right partners, to helping you secure business seals, to ensuring that your company is fully compliant. It is important to be aware of the challenges of doing business in Japan, but with the right guidance and implementation, you can collect great returns from expansion into Japanese markets. Get in touch with the experts at Galvin International today to learn how we can assist your business on its journey to global growth.

[1] https://www.japantimes.co.jp/opinion/2015/07/18/editorials/honda-makes-english-official/#.WgGDABO0NE4

[2]https://www.forbes.com/sites/eamonnfingleton/2015/11/22/it-is-japan-not-the-u-s-that-leads-in-serious-technology-says-top-reagan-technology-advisor/#6396c8e24023

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