              Choosing a Business Partner in Japan
          
          Selecting the appropriate partner in Japan is probably the 
          single most critical factor for your success in the market.  
          Your partner should be someone with whom you can 
          communicate comfortably -- someone who can teach you the 
          subtleties and finer points of the product market in Japan.  
          Your partner should be able to answer most of your 
          questions regarding the sale of your goods.  He should be 
          able to recommend alterations on your product which are 
          required by government regulation or which will make your 
          product more attractive to the Japanese consumer.  You need 
          to maintain a constant dialogue with your Japanese partner 
          for an effective relationship.  You need to be a good 
          listener.  You should also anticipate and respond to the 
          needs of your potential customers. If you are not 
          successful in establishing a good working relationship and 
          trust with your Japanese partner, you will not succeed in 
          Japan.
          
          Occasionally, an American exporter wishes to change 
          agents/distributors/representatives.  The reasons for this 
          decision may vary.  If the U.S. product does not sell well 
          within the first year, the American exporter often 
          incorrectly assumes that their Japanese partner has not 
          done his or her job. However, there are other factors which 
          must be considered such as lack of patience on the American 
          firm's part, poor product quality or after-sales service, 
          or an unwillingness to meet Japanese consumer tastes.  If 
          you have established a good working relationship and trust 
          with your partner, you should be able to determine what the 
          real factors are.  Remember it is difficult to change 
          partners in Japan.  Business in Japan is driven by personal 
          relationships.  Terminating the relationship between you 
          and your Japanese trading partner may alienate you from the 
          business community.  Furthermore, it is very difficult to 
          keep a search for another partner secret from the original 
          partner.  The impact on the existing relationship and 
          overall business in Japan could be fatal.
          
          The following is a 12-point checklist for your company in 
          choosing a trading partner in Japan:
          
          (1)  Does your prospective partner have knowledge and 
               expertise in your product area, and an established 
               network in the specific area that you want to sell to?
          
          (2)  Can you use the distribution network that your partner 
               owns?
          
          (3)  What is the quality of your partner's employees, and 
               what team will be working for you?
          
          (4)  What is the size of the sales force, and what 
               percentage of their time will your product receive?
          
          (5)  What is your partner's corporate culture?  Are you 
               his/her first experience with an international 
               company?
          
          (6)  What geographic coverage can your partner provide?  
               Can he/she help you deliver the product outside of the 
               major cities?
          
          (7)  How does your partner handle strategic planning?  Has 
               he/she performed a thorough analysis of what it will 
               cost to handle your product?
          
          (8)  How is your partner positioned in the marketplace and 
               what are his/her long-term goals? Are these compatible 
               with yours?
          
          (9)  What is your partner's attitude toward advertising and 
               investment?  Is he/she a savvy marketer?
          
          (10) Is there a conflict of interest between your product 
               and your partner's product?
          
          (11) Do you have support from the senior management of the 
               Japanese company and are they accessible to you?
          
          (12) Does the contract provide adequate intellectual 
               property protection for your firm?
          
              Which is the Best Entry Mechanism for Your Company?
          
          Selecting your best entry method requires an assessment of 
          the potential market size, the structure of the market, the 
          complexity of existing distribution channels, your firm's 
          resources, and your willingness and ability to commit to 
          the Japanese market.
          
          In evaluating the alternatives for market entry, you should 
          carefully weigh the alternative costs of various 
          distribution options against the potential market for your 
          products.  The type of product that you are interested in 
          exporting to Japan may make your decision easy.  You should 
          choose a business partner who will profit from marketing 
          your product or service and who is experienced in importing 
          your product line.
          
              More Advanced Market Entry Alternatives
          
          Beyond the agent/distributor relationship, if your firm is 
          interested in establishing a permanent presence in the 
          Japanese market, other options include setting up a 
          representative or branch office, subsidiary, or joint 
          venture.  In choosing an entry option, your company should 
          consider many points, including the volume and type of 
          business to be carried out, costs, and the degree of 
          control you wish to maintain.  Not every entry alternative 
          will suit your company.
          
          You can also enter the market by appointing a Japanese 
          manufacturer of a complementary product line as your 
          representative.  This type of representation allows you to 
          take advantage of product compatibility with the Japanese 
          firm's own lines and to utilize its distribution and 
          service network. Such arrangements have frequently led to 
          mutually beneficial relationships, including licensing 
          agreements and joint ventures for partial or full 
          manufacturing of products in Japan.  Some foreign firms use 
          a freight forwarder to handle some of the details of 
          importing, such as arranging for transportation and customs 
          clearance.  Necessary technical services can be arranged 
          through contracts with specialized technical or engineering 
          firms which possess the required capabilities.
          
          
