The 5 Whys of international expansion
Why is international expansion necessary now?
There is a rising expectation towards overseas demand due to the unlikeliness of an increase in domestic demand considering Japan’s declining population. However, more than half SMBs are yet to begin preparing for international expansion for reasons such as personnel shortages or insufficient information.
Is international expansion a necessary step for SMBs?
Including attracting overseas visitors to Japan, there are many benefits to be gained for SMBs by international expansion and internationalization. In fact, overseas investment and export activities by SMBs have increased 1.5 times compared to the year 2000.
Can any type of SMB achieve international expansion?
Unfortunately, realistically only a very limited number of SMBs are continuing international expansion.
For example, only 3.5% of all small-to-medium manufacturers export directly. That amounts to just 8198 companies.
|Total no. of SMBs in 2016||: 3,809,000|
|No. of manufacturers out of the total no. of SMBs||: 268,552|
|No. of manufacturers exporting directly||: 8,198|
SME’s (Manufacturer) trends in the direct exportings
2016 White paper The Small and Medium Enterprise Agency Japan
Why should an SMB accomplish international expansion "independently"?
Because the actual process involved in acquiring the ability to achieve international expansion independently is precisely the foundation you need to compete in overseas markets.
Requesting a trading company or other sales/expansion support company to gather information, find new customers or engage in local negotiations is one efficient method of accelerating international expansion. However, to achieve stable, ongoing international expansion, it is important not to leave tasks such as these up to a third party because they are cumbersome, but also having the ability to do them yourself, if need be. This is because, only by physically going to the target country, directly seeing and speaking with locals, enduring the process of trial and error and making decisions independently based on an understanding of the risks can you acquire firsthand insight on the benefits of expanding overseas.
7 benefits of taking the initiative and achieving international expansion independently:
- 1. More precise and swift decision-making by ascertaining firsthand information on the local market and customers.
- For example,
- 2. Identifying industries and markets for which prices, players and rules are yet to be established and perceive opportunities to participate in these with your own unique business model
- 3. Predict the future of your competition from competitors’ movements and reflect this into the direction and development of your company’s products.
- 4. Actively and strategically verify those “key points” that you wouldn’t pick up on through secondary information alone.
- 5. Know-how on the process of international expansion will become your company’s intellectual property and enable you to independently export and invest in other countries also.
- 6. More choices regarding sales routes to suit product/country-specific characteristics, such as direct trade by yourself or indirect trade via another company, etc.
- 7. Facing unforeseen circumstances and having to make swift decisions through directly doing business with local companies, you will always have a backup framework in place (e.g. plan B, plan C, etc.) and swift PDCA management, consequently making you stronger against recessions.
What do you think?
For SMBs about to receive overseas demand, having the ability to advance international expansion independently gives you the upper hand over your competitors. Why not try leveraging real strength in overseas markets in the same way as you do in the Japanese market so as not to leave success up to mere chance.
Why is Paccloa the best choice to help the international expansion of your SMB?
Paccloa supports SMBs by helping to realize goals through a trial-and-error process in the form of OJT (On-the-Job-Training).
We speed up the internationalization of your company through harnessing the following three characteristics of our company.
First, by receiving the right feedback in OJT and progressing towards international expansion, the ideas you have thought out in your head can be turned into reality.
Next, you will be able to differentiate between trial-and-error which is unnecessary and the trial-and-error that is essential to achieve your goal, consequently saving you time.
Finally, through OJT that teaches you to constantly hone the ability to draw conclusions, you will become able to make the best choice when encountering unforeseen situations in the future.
You will become capable of international expansion on your own.
Paccloa offers OJT support to facilitate internationalization and make international expansion an achievable goal for SMBs.
Our dedicated consultants will provide thorough guidance to your company through OJT so that you may acquire the ability to start and continue international expansion and become capable of actually engaging in business overseas in three years.
By working with Paccloa consultants,
your company will accumulate know-how
and the mechanisms to achieve international expansion
will remain at your company.
What is international expansion?
international expansion is about building a new pillar for your company’s management.
Let’s get started by objectively ascertaining your company’s current status!
Paccloa will create a future in which your products will be accepted and loved overseas, five or ten years from now.Read More
Product Accepted & Loved Abroad
Paccloa’s company name is coined from key elements of the phrase “Product Accepted & Loved Abroad.”