Entering Foreign Markets Truth and Myth

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Entering Foreign MarketsTruth and Myth

• Examples from Japan
• MGMT 5903
• Katsu Shimizu

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Conventional wisdom says,

• To be successful in foreign markets, US companies
  need to fully understand the unique culture and
  immerse themselves to the local tastes/practices.
  
• How true is this?

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Coca-Cola vs. Pepsi

• Coca-Cola entered Japan in 1957.
• Huge success.
• Six bottlers are publicly-traded.

• Pepsi entered Japan in 1958.
• Had been a loser.
• In 1998, Japanese subsidiary was sold to a local
  company (Suntory).

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Coca-Cola Japan

• Identity
• Delivery (Distribution Channel)
• Extension

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Other Examples

• Dell (entered Japan in 1993)
• Starbucks (entered Japan in 1995)
• General Motors (first entered Japan in 1927)

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Lessons

• Stick with your unique identity, strengths, or
  raison d'etre.
• Think about the US market long time ago.
• Japan is a very competitive market.
• Distinguish what should be changed and what
  should not be changed
• e.g., adjust channels and logistics to local
  practices.
• Extend after a solid foundation is built.

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Lessons (continued)

• First, focus on basics/commonalities and then
  move to differences (not vise versa).

US
Japan