One Monday afternoon when I came back to the office from a business trip, I was trapped by my PC: “I cannot send any e-mails!” I restarted my PC several times, but the situation was the same. I kept receiving emails, but could not send any emails at all. I thought, Okay, maybe it’s a problem with Microsoft Outlook. Then I tried to send an email using another e-mailer, namely Thunderbird; but I could not send any emails using this either. Internet connections and webmail systems were functioning well, however. So, I called up the hosting company, our office manager, and an anti-virus software company to find out what had caused the problem. After spending almost a whole day investigating, I finally found out the cause of the problem:
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April 30 2008 | Technology and Weekly Articles | 5 Comments »
“Listen, we do business with established companies. Please come back after 3 years and tell us which companies use your services.”
This is what early-stage entrepreneurs are normally told when they make a visit to large Japanese companies. No matter how great their services or products may be, large Japanese companies are generally not in favour of using start-up companies.
Becoming a John Doe
Not matter which large company you worked for or what high position you held, you become John Doe the moment you leave the company and start your own business. A female entrepreneur recalled the early days in her own business saying: “My previous colleagues treated me like a stranger when I contacted them about my new business. They did not even want to meet me.” A Japanese gentleman who had just started his own business said: “My friends have stayed away from me since I started my own business.” He continued: “They assume I may ask for their money, which is completely wrong.”
Unpopular John Doe
The John Doe is not popular among financial institutions. Large Japanese banks are not willing to lend money to start-ups until the business is proven to generate profits. National Life Finance Corporation offers business loans for stat-up companies, but its interest rate for start-up loans without collateral is a little higher (standard rate plus 1.2%) than those for small business loans. Likewise, Japanese venture capitals are inclined to invest in ventures after the business model is proved to be successful.
A John Doe company is not popular among job applicants either. Start-up companies require their employees to work very hard, but they cannot pay them very much. Especially in tight labour markets, large companies have the advantage of being able to offer higher salaries then start-up companies when trying to attract labour.
The Tipping Point Magic
However, the tipping point can change the situation completely. Successful Japanese entrepreneurs say that once they have even the smallest chance to demonstrate their products or services to customers, it is very easy to expand their business. The entrepreneur is not John Doe anymore. The entrepreneur’s name is everywhere; in newspapers, in magazines and on the web.
“I felt rewarded after going through such a hard period”, said a famous Japanese entrepreneur. “It is neither the fame nor the financial reward. It is the feeling of achievement after going through these hardships. You never experience this feeling unless you run your own business.”
April 16 2008 | Economy and Weekly Articles | No Comments »
On the morning of April 1st, trains bound for Tokyo were unusually crowded with young men and women wearing brand new business suits. They were new employees who were starting work with companies after graduating from school. They are supposed to be fresh, active, and individualistic. However, they were actually very quite and looked nervous.
Characteristics of New Employees – High Corporate Dependence with Low Corporate Loyalty
“New employees this year seem to need a great deal of care. Companies should take care of their new employees as if polishing the ice to slide a heavy stone towards the target in the game of curling.” This is how the Japan Productivity Center for Socio-Economic Development characterized new employees in Japan this year.
Even if companies take a great deal of care, new employees are unlikely to respond with high corporate loyalty. “I will work for the company for a while. But I will change my job as soon as I find a better position outside”, a new employee said. “I do not plan to work just for this company for my entire life.”
More care than is needed?
Even if a company offers new employees a lot of training and benefits, the new employees may leave the company anyway when they find better working conditions elsewhere. So, why should companies take great care of new employees when they may just leave the company after receiving training? Well, Japanese companies may just stop offering new employees such training and benefits. As the old saying goes: “Spare the rod and spoil the child.”
April 11 2008 | Culture and Weekly Articles | No Comments »
Blogging is relatively new to Japan, but its popularity is growing. The Ministry of Internal Affairs and Communications announced that the number of Japanese bloggers numbered around 3.35 million people in March 2005, and was estimated to reach 7.8 million in 2007. So, what has caused the boom in Japanese blogging? Are the reasons for the boom similar to those found in European countries or in the United States?
Insights-out – What is Unique about Japanese Blogs?
1. Many free-of-charge blog providers
There are many blogging services that the Japanese can use. In addition to global blog providers such as Bloggers and Wordpress, there are domestic providers such as Livedoors, Nifty, and Biglobe, who offer free-of-charge blog services with easy-to-use guidelines for new bloggers.
2. Ranking the popularity of blogs
Most domestic blog providers show popular blog rankings in addition to blogging services, which is similar to what Technorati offers. They have a blog page on their website showing blog rankings in total, as well as by category, and the most popular articles, of which layouts are different depending on the provider. Japanese bloggers see the rankings as a measure of their blog’s popularity, in addition to providing details on the number of visitors they receive. Such ranking encourages the Japanese to write even more blogs. I have seen several Japanese bloggers who ask readers to frequently visit their blog, saying the likes of: “Thank you! My blog has received 10, 000 visitors in total! Please visit here again!”
3. Many private bloggers writing personal diaries
There are many Japanese bloggers who write about private matters in their daily life or about their own experiences. For instance, if you would like to get ideas about how to save money, you can just Google “Okaneno tamekata” (how to increase your saving money). By doing this you can get a lot of advice about how to save money from Japanese bloggers.
Reading Japanese blogs gives Japanese consumers a rich insight into markets. They may also be useful for international companies, as long as issues of language can be dealt with.
April 04 2008 | Culture and Weekly Articles | No Comments »
“Yen daka” (yen appreciation) is now a common word flowing around Japanese websites, newspapers and TV programs. The US dollar/yen exchange rate was 95 yen on March 17, falling below 100 yen for the first time since 1995. This has resulted in certain booms in the Japanese market:
- Boom of Foreign Currency Buying
The high value of yen to US dollars has encouraged Japanese customers to buy foreign currencies. Sources say that there has been an increase in customers opening bank accounts to start foreign currency transactions. The customers want to buy a large number of US dollars while the value of the dollar is low. This has helped the business of Japanese financial institutions a little, which has been severely hit by subprime-related losses.
- Boom of Overseas Travelling
Thanks to yen appreciation, the number of Japanese travelling overseas has increased, especially the number visiting the United States. Importantly, the high value of the yen has helped travel agencies to recover the losses they have experienced due to high oil prices, which had reduced the number of travellers overseas. HIS, a Japanese travel agency, cheerfully says on its advertisement for overseas travel services: “Now, take this chance! Take advantage of the high value of the yen.”
- Boom of Imported Goods Sales
The high value of the yen also helps retailers to attract customers wanting imported goods. “Bargain sales of imported goods!” is the catchphrase for supermarkets, such as ItoYokado, to advertise fruit and vegetables from the USA, with low prices being offered on the web, in newspapers and on flyers to get the customer’s attention.
But…
It is not all good news; there is some bad news also. The yen appreciation hurts Japanese exporters, while it benefits Japanese consumers buying imports at a lower cost. Japanese stock prices continue to fall due to the loss in foreign investors, and Japanese politics are uncertain. The high value of the yen has cheered up the Japanese economy a little bit for now: but just for now.
March 28 2008 | Economy and Weekly Articles | No Comments »
“Market research? I don’t know it well…” This is the usual reaction I receive from Japanese when talking with them about market research services. I continue to say: “Well, market research services include online satisfaction surveys…” “Oh, surveys? Uh… I see. Collecting opinions from people, right? We already do it.”
It does not seem that Japanese companies actively use or purchase market research services. For instance, market research sales in China in 2006 increased by 17.8% from the previous year, and in Hong Kong by 12.2%, while the market research sales in Japan increased by only 4.3% in 2006 (Source: ESOMAR Global Market Research 2007).
This can make us wonder: without using market research services, how do Japanese companies understand their customers’ needs and create innovative products?
Here is what I found out from Japanese companies that do not use market research services:
Doing research while selling products/services: Japanese companies collect information about the market, competitors, and their customers as part of sales activities. One Japanese sales consultant said that having a good relationship with distributors and customers is crucial for doing business in Japan, because through this they can get the latest market information from them. He also said that good sales representatives should be excellent listeners so as to understand the needs of their customers in order to offer them the best proposals.
Using own senses to make products: Like artisans who create traditional Japanese art, Japanese engineers are inclined towards using their own senses to develop new products. For example, a cosmetic product development expert creates a skin moisturizer that leaves skin silky smooth by checking the product texture on his own skin. His own senses of feeling, seeing and smelling, not the consumers, are his tools to develop products that delight his consumers.
These findings do not sound like good news for market researchers in Japan. However, they are not just bad news. There seems to be several drawbacks to their approach:
- Customer information is not always shared within the company. Although sales representatives may have a mass of information about their customers, they may keep it only in their heads or in their own journals. Unless the company develops a database for sales activities, such customer information may never be used by other sales people. Each sales representative may have the same customer information but in a different format.
- An excellent design from the expert’s viewpoint may not necessarily be what customers want. “The product looks wonderful, but I don’t need it.” This is what customers say when they see a product that was developed without input from consumers. Additionally, customers today are not necessarily satisfied with the same products that satisfied consumers 30 years ago. This is one of the reasons why traditional companies who continue to manufacture the same products face a decline in their sales and end up bankrupt.
“We cannot rely just on our own senses anymore”, one senior executive of a Japanese manufacturer said. “We have to listen to the voice of our customers.” Yes, indeed. We need to take the voice of customers to top management, not just to sales representatives and product designers.
March 21 2008 | Research and Weekly Articles | 2 Comments »
Japanese consumer confidence has continued to fall. In January 2008 the consumer confidence index was 37.5 points, 0.5 points down from the previous month and 10.6 points down from the previous year. In addition to the overall index, other confidence index figures are down, including overall livelihood and income growth. Indeed, Japanese consumers have really lost confidence.
1. Worry about losing investors
One thing that makes the Japanese worry is the performance of the Japanese stock market. Since the summer of 2007, Japanese stock prices have continued to fall. The average stock price was around 12,500 yen last week, whereas the price was around 17,500 yen in July last year. Japanese economists worry that investors may no longer see the Japanese financial market as attractive as other markets such as China and the South East Asian countries.
2. Worry about few entrepreneurial activities
There is not much in the way of entrepreneurial activity that could revitalize the Japanese economy. According to the Global Entrepreneurship Monitor’s (GEM) 2006 results, early-stage entrepreneurial activity in Japan was 2.9%, the second lowest rate among the 42 countries surveyed. This rate is much lower than that of China (16.2%) and the United States (10.0%). This should make us worry that there are fewer business seeds being sown in the Japanese economy.
3. Worry about educational performance
Another worry is the decline in educational performance of Japanese students. According to the OECD International Student Assessment (PISA) survey of 2006, Japan saw a decline in reading performance between PISA 2000 and PISA 2006. Furthermore, Japan received the lowest score in self-efficacy; a score related to students’ belief in whether they can handle tasks effectively and overcome difficulties.
“We should do something …”
The Japanese government feels a sense of urgency to fix these economic and educational issues. To promote new business, the government offers promotion programs for current and prospective entrepreneurs such as new partnership activities and coordination of market development activities. For education, the Ministry of Education, Culture, Sports, Science and Technology is reviewing current educational guidelines to improve the scientific literacy and reading performance of students.
It should be mentioned that Japan should not worry too much about these issues. Japan is still the second largest economy in the world by real GDP. The literacy rate in Japan amounts to 99% of the total population CIA the World Factbook). However, it is true that the Japanese economy is not as booming as it was in the 70s and 80s, and Japanese students do not necessarily excel over students of other countries in any academic subject. It may be, therefore, only a matter of time before the Japanese begin to really worry about these issues.
March 14 2008 | Culture and Economy and Weekly Articles | No Comments »
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