Clarification of business model to be developed
In order to expand our overseas business and expand our sales channels and business opportunities, we must carefully conduct market research and clarify the business model that will ultimately be realized through overseas business expansion.
In other countries, the same business model as in Japan may not be applicable, so it is dangerous to continue business that has been conducted in Japan. When considering overseas expansion, it is necessary to first clarify the target customer base, local needs and the value of the service, and how to provide it. It is also important to investigate cultural and consumer behavior different from that in Japan, differences in the way local workers think, and legal regulations.
As you can see, the business models required in Japan and overseas may differ, so it is important to identify them. Market research is conducted with a comprehensive awareness of these issues and uses information in an appropriate manner.
analysis of market size
Analysis of market size is also essential when expanding overseas. In analyzing market size, you need to know not only the size of the market, but also the presence and threat of competitors that may become competitors depending on their size.
It is not impossible to investigate the size of overseas markets using the Internet. However, there is a possibility that there is information that is different from the actual situation.
For this reason, it is also important to find ways to collect information that can be reliably obtained in line with local realities.
Find out how mature the target country’s market is at the moment, and measure its growth and the market potential it can capture when entering. Therefore, it is necessary to consider the scale in which the company’s services and products can enter the market, and depending on the results, it may be necessary to decide to reconsider entering the country.
analysis of consumer needs
When expanding overseas, analysis of consumer needs is a necessary part of market research. This is because services and products that were required in Japan may not be accepted overseas.
It is necessary to gather information on the lifestyles and preferences of local foreigners, as well as the needs of companies, and analyze whether there is a need for our own services and products. Overseas, each country has its own unique culture and consumption behavior.
It is necessary to pay attention to these points and understand the characteristics of consumers and local companies. If you are thinking about expanding overseas as a new business, you can take a step closer to the success of your business by clarifying what you are looking for based on these points.
In conducting market research for overseas expansion, it is essential to obtain and analyze information on competitors. The presence of competitors, together with the needs of local companies and consumers and the size of the market, constitutes an external threat and hinders overseas expansion.
Also, by analyzing and knowing the competition, you will be able to see the business opportunities in the countries you plan to expand into. Information on competitors’ sales, distribution networks, and transaction status can be used as a reference material for developing future business goals and strategies.
Market research can help clarify risks and potential by analyzing competition along with market size and market maturity. However, this information may not be available to companies that do not have market research expertise.
Going to the local area is one way, and it’s also important to look for a service or information gathering platform to get the support you need.
Analysis of laws and regulations
In order to conduct business overseas, it is necessary to analyze laws and regulations such as foreign capital regulations and industry regulations surrounding the market. You have to pay special attention to the difference from Japan.
What you should be careful about when you go abroad is the case that foreign capital is totally restricted or the investment ratio is restricted. On the other hand, some companies are required to invest more than a fixed amount of capital.
You need to be careful about the case that you can establish a corporation but you don’t have a license to do business. If you are going to expand overseas under these laws and regulations, you need to take measures such as establishing local partner companies.
Furthermore, even if we are able to start a business, we will not forget that there may be restrictions on profits made overseas, dividends from acquired companies, and royalties.
analysis of partner companies
There are many advantages to using partner companies to conduct market research for overseas expansion, such as overcoming language barriers and distance, and acquiring local expertise.
On the other hand, there are many cases where business does not proceed smoothly because of the inability to establish good relationships with such partners. When you look for an overseas partner company, you may choose the wrong company and cause trouble. Emerging countries, in particular, have a high risk of fraud, and there are many cases of being deceived by local partner companies.
Collect information while recognizing potential differences such as high ethical standards, differences in business practices, and workers’ sensitivity. In countries where accounting, tax and internal investigations are not functioning, bribery and other forms of bribery are rampant in business, and companies are exposed to the risk of trouble without even knowing it.
It is necessary to confirm the existence and basic information such as affiliated companies. Also, you should be careful when you collect information while you are in Japan because information is old and may have already merged or gone bankrupt.
As described above, when conducting market research for overseas expansion, it is possible to make the research more meaningful by examining business models suited to the local market, confirming market size and consumer needs, understanding competition and local legal systems, and utilizing reliable partner companies.