Selecting markets. The Japanese work hard to identify attractive global markets

The Japanese work hard to identify attractive global markets. They look for industries that require high skills and high labour intensity but few natural resources. These include consumer electronics, cameras, and pharmaceuticals. They like markets where consumers around the world would be willing to buy the same product design. They look for industries where the market leaders are weak or complacent

Entering markets

Japanese study teams spend several months evaluating the target market, searching for market niches that are not being satisfied. Sometimes they start with a low-price, stripped-down version of a product, sometimes with a product which is as good as the competition's but priced lower, sometimes with a product with higher quality or new features. The Japanese line up good distribution in order to provide quick service to their customers. They use advertising to bring their products to the customer's attention. Their entry strategy is to build market share rather than early profits. The Japanese are often willing to wait even a decade before realising their profits.

Building market share

Once Japanese firms gain a market foothold, they begin to expand their market share. They pour money into product improvements and new models so that they can offer more and better things than the competition. They spot new opportunities through market segmentation, develop markets in new countries, and work to build a network of world markets and production locations.

Protecting market share

Once the Japanese achieve market leadership they become defenders rather than attackers. Their defense strategy is to continue product development and refine market segmentation.