How to Win Emerging Market (Harvard Business Review)
Introduction
Japan has succeeded to enter the market in developed countries such as the United State and European countries. Nevertheless, Japan existence is not happening in emerging markets. Shigeki Ichii, Susumu Hatori, and David Michael in accordance to that reality, wrote an article “How to Win in Emerging Market: Lessons from Japan” in Harvard Business Review volume 90 issue 5 on page 126-130, that was published in May 2012. The main aim of this article is depicting the challenges that should be faced to ramp up their sales because in comparison to other multinational companies, Japanese multinationals tend to have a slower sales growth. Those challenges are the distaste for middle and low-end segment, aversion to mergers and acquisitions, lack of commitment, and talent. In addition, in that article the authors also give example of two Japanese companies (Unicharm and Daikin) that successfully break the emerging market by overcoming those challenges.
Four Challenges
Japanese multinationals have been growing slowly in emerging market because of their own failure. First, Japanese firms tend to use their strategy in established market, which is too much focused on the high-end market. Therefore, they lose the market share to other multinational rivals. It reflects that Japanese firms treat all their markets similarly, whereas each market has their own characteristics. For instance, the preferences of consumers in each market toward the types of televisions are different. It also influenced by the level of consumer wealth in those countries. Second, decision making at Japanese companies to merge and acquire with local partners tends to be slow, and if they do decide to acquire, often the most attractive target have already been snatched up by other multinationals (Ichii, Hattori, and Michael, 2012). It positively correlated with cultural distance theory which states that the investing firms will not want to cooperate with local partner if cultural distance
Japan has succeeded to enter the market in developed countries such as the United State and European countries. Nevertheless, Japan existence is not happening in emerging markets. Shigeki Ichii, Susumu Hatori, and David Michael in accordance to that reality, wrote an article “How to Win in Emerging Market: Lessons from Japan” in Harvard Business Review volume 90 issue 5 on page 126-130, that was published in May 2012. The main aim of this article is depicting the challenges that should be faced to ramp up their sales because in comparison to other multinational companies, Japanese multinationals tend to have a slower sales growth. Those challenges are the distaste for middle and low-end segment, aversion to mergers and acquisitions, lack of commitment, and talent. In addition, in that article the authors also give example of two Japanese companies (Unicharm and Daikin) that successfully break the emerging market by overcoming those challenges.
Four Challenges
Japanese multinationals have been growing slowly in emerging market because of their own failure. First, Japanese firms tend to use their strategy in established market, which is too much focused on the high-end market. Therefore, they lose the market share to other multinational rivals. It reflects that Japanese firms treat all their markets similarly, whereas each market has their own characteristics. For instance, the preferences of consumers in each market toward the types of televisions are different. It also influenced by the level of consumer wealth in those countries. Second, decision making at Japanese companies to merge and acquire with local partners tends to be slow, and if they do decide to acquire, often the most attractive target have already been snatched up by other multinationals (Ichii, Hattori, and Michael, 2012). It positively correlated with cultural distance theory which states that the investing firms will not want to cooperate with local partner if cultural distance
References: Ichii, S., Hattori, S., and Michael, D. 2012. How to Win in Emerging Markets: Lessons from Japan. Harvard Business Review. 90: 126-130. Verbeke, Alain. 2009. International Business Strategy. New York: Cambridge University Press.