The first such case involves a mid-sized parts manufacturer looking to establish a distributor in Japan. The manufacturer had an existing sales organization comprised of independent representatives in place. When the manufacturer was approached by a distributor in Japan, it became evident that the distributor was unwilling to work with the manufacturer’s representative organization demanding, instead to deal directly with the manufacturer at the executive level. Because there had not been significant sales in this market yet and in the interests of satisfying the customer, the manufacturer complied, terms were negotiated and the initial orders placed. The customer requested several design changes to the product claiming the local market required these for successful launch. Again, the manufacturer complied. The manufacturer shipped the first order after receiving what they thought was a final approval based upon a pre-production sample. When the first shipment was rejected, it was discovered that the customer had made an undocumented change to the final drawing without calling attention to this change to the manufacturer. This resulted in an expensive re-work of the initial shipment, a delay in the product launch and loss of reputation for both the manufacturer and distributor.

What could have been done differently? Hindsight is always 20-20 but perhaps, this situation could have been avoided had the manufacturer realized the warnings indicated by the distributor’s attitude. The distributor’s rigid and uncompromising manner indicates an inwards focus on the Japanese domestic market without an acceptance of foreign business cultures. These types of businesses tend not to be willing to understand the different business practices they are exposed to as they deal with foreign companies. The manufacturer could have chosen several different approaches at this point: to not do business at all with the distributor, to insist on utilizing his existing sales organization, or at a minimum to understand that all communications should be reviewed with a very detailed eye so as not to allow any misunderstandings resulting from such a culture clash. Had the manufacturer recognized these options ahead of time and adapted his pursuit, mistakes may have been avoided and the cost overruns, and loss of goodwill associated with them, may never have become an issue.

Another case involves a recent intellectual property project. A transplanted foreign national was retained to assist in communications and relationship building due to his stated knowledge of the industry and language fluency. Having been born and raised in the target market and attended college in the US, it seemed like a perfect fit. However, as the project proceeded, it became evident that what seemed like a major asset, was, in actuality a severe liability. After leaving his country at a young age he never gained experience working in the target market. This resulted in a lack cultural fluency that hindered negotiations with potential customers. As a transplant with no previous work experience in the target market, he was between two cultures – not fully immersed in either. This resulted in a lack of respect from contacts in the target market, frustration at the lack of progress from the owner of the intellectual property and missed cues and communications all around. The project ground to a halt while the staff was re-organized.

In this case a more thorough vetting process may have avoided retaining the wrong individual. However, it would have been tough to know the important role that cultural fluency played in this case. That being said, it is important to have some idea of the requirements of the target market before proceeding and prospecting partners. This can only be attained by thorough research prior to considering a launch, research that may sometimes appear to be a needless expense. However, as evidenced by these two cases, proper research has its place in the right circumstances.

These examples illustrate the need to discern carefully before choosing which partners to work with when entering a foreign market. While every case is different and contains its own unique set of challenges, at its core, the methodologies for targeting and launching in foreign markets are similar from industry to industry. Central to this is the need to find valuable business partners for any foreign venture. With the proper blend of market research, careful attention to details and disciplined planning you should be on the road to the success you are looking for. Good Luck.