1. Foreign Business Competing in Japan

2. Unique Features of the Japanese Distribution System
About 18% of Japan’s exports and 33% of its imports were handled by top 10 general trading companies (Sogo Shosha) in 2000; a decline from 50-60% in the mid-1970s
About 50% of Japan’s domestic distribution is handled by top 10 general trading companies (Sogo Shosha)
Sogo Shosha make profits by handling large amounts of products at laser-thin margins.

5. Sumitomo-Mitsui Banking Group UFJ Holdings, Inc.
Tokai Bank
A Possible Alliance
Mitsubishi-Tokyo Financial anking Group
Mizuho Holdings, Inc.

7. Two Types of Keiretsu Horizontal Keiretsu Bank General Trading Co.
Manufac. &
Other Firms
Horizontal Keiretsu

8. Two Types of Keiretsu Horizontal Keiretsu Vertical Keiretsu Bank
General
Trading Co.
Manufac. &
Other Firms
Horizontal Keiretsu
Vertical Keiretsu
NEC
Supplier 1
Supplier 2
Supplier n
Second Tier Suppliers

9. Horizontal Keiretsu: Then and Now
Division of labor and specialization
Increased independence of manufacturers, trading companies, and banks in pursuit of their respective goals
1995-present
Reconsolidation across Banks

10. Why Not Use Sogo Shosha?
Good at High Volume/Low Value-Added Commodities
Personnel Spread Out Too Think to Handle High Value-High Service-Required Products

11. Success Factors for Foreign Entry (1)
Successful Examples
Ajinomoto - General Foods
Hattori Seiko - Schick
Procter&Gamble - Sunhome
Doubtful/Unsuccessful Examples
Tokyo Electron - Computervision
Meiji Milk - Borden Ice Cream
Toppan - Moore
Find the Well Established Partners
that do not Have Competing Products

12. Success Factors for Foreign Entry (2)
How About…?
Yamato Takkyubin - UPS
DoCoMo - AOL
Yanase - Ford and Other Foreign Automobile Companies
Ezaki Glico - Blue Bell Ice Cream
Carrefour

13. Emphasize Total Quality
1. Added Benefit
- Quality and Payment Terms
- Product Modification
2. Appearance
- Packaging
3. Availability
- Proper Choice of Channels
- Promptness of Delivery
4. After-Sale Service
Masami Atarashi, ex-President of
Johnson&Johnson (Japan)

14. Let’s Take A Break!