Introduction.
Expanding into global markets is a great opportunity for companies, but it also requires careful preparation and strategic planning. This article will organize the necessary elements of overseas expansion and explain in detail the key points that must be kept in mind in order to succeed. We aim to provide a compass for companies seeking to enter overseas markets.
Analysis of our products
The first step before expanding overseas is to take stock of your company's products. Review your products from the following perspectives to determine your target market.
Consistency with market needs: Is it required in overseas markets?
Competitive advantage: What differentiators do you have over alternatives?
Price range: Is the price competitive, including transportation costs and tariffs?
Thoughts and stories behind the product: Is there a background that local consumers can relate to?
Based on these considerations, it is important to think from the perspective of "delivering the brand" rather than simply exporting.
Determination of target market
Which country or region to target is the cornerstone of a company's strategy. Do not simply choose Asian markets based on low barriers to entry,
Medium- to Long-Term Outlook
Formation of brand value
Strategies for secondary development
Market selection should be based on the following factors
For example, wealthy Asian consumers have a high level of trust and admiration for "made in France. On the other hand, Asian markets are prone to commoditization, and there is a risk of price competition due to the large number of inexpensive similar products.
Therefore, a strategy of first establishing a track record in the European market and then re-importing the brand back to Asia as a "brand that is handled in Paris" will allow the company to compete with strong brand power and thus easily avoid price competition.
Consider sales strategies.
In overseas expansion, it is important not only to sell, but also "how to sell. The following strategies differ for each sales channel.
D2C strategy: While maximizing branding and customer contact points, logistics and CS are issues.
B2B Strategy:
Via distributors: Faster market development speed, but beware of margins and brand control.
Retailer-direct transactions: trust-building and sales skills with the local market are required.
OEM strategy: MOQ, price, and contract negotiations are key.
Since resources are limited for first-time overseas expansion, it is important to focus and steadily implement one thing at a time.
We have assisted more than 1,000 companies to date in developing the best strategies for their corporate situations and business unit sales commitments.
Understand and prepare for foreign business rules
Overseas, business customs and transaction rules differ greatly from those in Japan. It is necessary to fully understand and prepare for the following elements.
Laws and regulations concerning the setting of top quotations (e.g., Antimonopoly Law)
Management of exclusive distribution rights
Availability of samples and cost sharing
Transportation cost, customs duty, taxable/non-taxable classification
Payment terms and collection risk
Since trust and conditions change between initial and ongoing transactions, the ability to negotiate while reading the "other party's position" and "psychology" is necessary in business negotiations.
Cases of Failed Overseas Expansion
Many failures begin with ambiguity in setting objectives. The following cases require attention.
"The purpose is to have a track record of overseas business."
The goal is to get local representation."
Such an objective leads to misinterpretation of the commercial flow and results in products not being distributed in the local market even after several years.
Pitfalls of Antenna Shops
Although "antenna stores" featuring Japanese products are a hot topic, many of them are niche stores,
Low number of visits
Sales are not stable.
There is a gap between the wholesale quantity and the desired sales quantity
This is a structural problem.
Agents without sales force
Even if you can easily find a local agency,
No real selling power.
No salesman.
No customer network
In many cases, the sales of the product do not increase and the company is left with only the exclusive sales rights, and no measures can be taken.
summary
Expanding overseas is an attractive challenge, but proceeding on the basis of feeling and hope alone increases the risk of failure.
Understand the intrinsic value of their products and
The selection of a precise target market and
Understand local rules and business customs
Be realistic with your sales strategy and resources
Draw up a medium- to long-term plan to focus on results.
is the key to success.
Overseas expansion is more than "selling"; it is important to "become the brand of choice for local consumers. As the first step, let's start systematic preparations.