Written by: May Elgrabli
“Japan is the third largest economy in the world but lies in 114th place for ease of doing business” (TMF). The unique Japanese cultural characteristics (differing from Israel) emphasize Japan’s exceptionally high standards, tedious requirements and expectations – seeking nothing less than perfection when it comes to admitting foreign products. Yet, it is interesting to classify these standards’ utility to foreign businesses trying to penetrate the Japanese market; are they enhancing and pushing foreign businesses to their top performance or should we rather address them as fundamental barriers when attempting to integrate into the Japanese business world? Moreover, are these standards a friend or a foe to Japan’s economy?
The market potential in Japan is one that cannot be overlooked. The volume of mergers and acquisitions alone is continuously rising (Eurotechnology Japan), and as the third largest economy in the world, the motivation of foreign businesses to penetrate is evident and self-explanatory. Like any attempt to penetrate a foreign market – one requires an understanding of their counterpart’s market.
The cultural differences between Japan and Israel could be used to present the two as mirror images of one another. While Israel’s characteristics could imply temerity, Japanese culture on the other hand can be described as much more thorough and refined. In this context of extreme differences, is a partnership between the two nations destined to crash or rather reach new heights completing each other’s’ shortcomings? One is left wondering to what extent is it possible to achieve true and meaningful cooperation, and whether these differences play to our advantage or against it?
One of the main challenge of penetrating the Japanese business world has to do with Japan’s regulations. Indeed, the nation has a dense network of regulations, permissions, certifications, offices and authorities that require approving procedures for many things that are not even criteria in the Western business world. Japanese standards necessitate a much more thorough attention – making quality, response and service requirements typically higher than in other nations (Eurotechnology Japan). Moreover, alongside the tedious bureaucratic steps, foreign companies must adapt to the Japanese business culture (TMF); formed of unique sets of etiquettes, rules, hierarchy, gender roles (Communicaid) and other concepts altered unfamiliar to Western culture. Thus, it is very difficult to penetrate the Japanese market.
In this context, achieving market penetration in Japan serves as testimony to a businesses’ superb abilities (adaptability and flexibility to name a few) and to its products’ excellent quality (a “Kosher certificate”), overcoming many differences and managing to please the Japanese high standards of perfection. Thus, whoever makes it in Japan is branded with a significant quality marque – making Japan a very attractive test market for businesses. However, as these restrictions serve as barriers for outside newcomers, I am left wondering whether they in fact limit the Japanese economy by actually blocking the possibility for a more intense international business activity in Japan.
On one hand, these harden if not eliminate completely for many foreign companies the ability to penetrate the Japanese business world. On the other hand, these regulations ensure only the best quality of products penetrate the market. Thus, in order to succeed in Japan Western companies are forced to enhance their products, and develop a higher level of service and quality. These changes dramatically and inevitably push companies to their excellence capacity. These conditions create a reality when knowing Japanese culture is barely enough to make it there – one must focus on their products and services (rather than etiquettes) – and I ask, is this not a great thing? Apple, IKEA, and Starbucks are all examples of huge successes in Japan because of the quality of their unique products and services, not because of mastering Japanese business etiquette (Eurotechnology Japan). These regulations are today eased as Japan becomes a player in the race of the global economy and does not want to lose businesses to its neighbouring Asian countries. In a reality where substance trumps etiquette – what is the value in starting to compromise quality over quantity?
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