Summary of Japan insights
Conducting business abroad has become slightly more difficult than 3 years ago according to Japanese mid-cap CFOs. Despite the economic and regulatory difficulties facing all businesses, 62% of Japanese mid-cap CFOs we interviewed are confident that their three year plans to expand internationally will succeed. On average, they expect 35% of their revenues in 2014 to come from sales outside Japan, up from the current 29%.
Japanese businesses are focusing on expanding into China, India, Thailand and Indonesia while Japan plays an integral part in the expansion plans of USA, Canadian and Chinese businesses.
Market size, access to new customers and access to local market expertise are the most important opportunities for companies looking to expand into Japan.
Finding the right local management, red tape & bureaucracy and cultural or language barriers are the biggest challenges faced by Japanese companies when expanding internationally.
Japanese businesses act fast once a decision to open a new office is made - 42% open an office in less than a year. According to Japanese CFOs, investment banks (40%) and internal sources (26%) are the most trusted sources when expanding abroad.
Outlook for cross border growth
- China, India, Thailand and Indonesia are important markets for Japanese outward expansion
- Japanese expansion abroad is driven by market size and growth opportunities
- Japanese businesses are more likely to ‘play it safe’, expanding in their core sector and within existing products and services
- Investment in people will be the main focus over the next 3 years for Japanese companies expanding abroad
Factors driving inward Japanese investment
- Market size
- Access to new customers
- Access to local market expertise
Challenges for companies expanding into Japan
- Intensity of local competition
- Finding the right local management
- Cultural or language barriers
Challenges faced when expanding internationally
- Finding the right local management
- Red tape & bureaucracy
- Cultural or language barriers
Top insights for growth
- Do thorough research to improve your knowledge of the market
- Recruitment of good staff is key to success
- Make sure you have language skills in place/ understand the culture
The in-country summaries are given as general commentary only. The global BDO Ambition Survey 2011 is based on 751 CFOs’ responses of mid-cap companies across 13 countries (50 in Japan). The survey was conducted by StrategyOne between 23 May – 8 July 2011