To determine the timing of overseas expansion

Is this the right time to expand overseas?
If we miss the timing of our overseas expansion.
The timing of overseas expansion will be decided by financial reserves.
Timing of overseas expansion depends on human resources
The timing of overseas expansion depends on management’s judgment.
Timing of overseas expansion depends on local conditions
Summary

Is this the right time to expand overseas?

It is important for companies considering overseas expansion to determine the timing based on their own business phases, related markets, and consumption trends. Since the 1990s, an increasing number of Japanese companies have been expanding overseas. In recent years, a large number of SMEs and venture companies have also been expanding overseas.

On the other hand, looking overseas, an increasing number of Asian countries, including China, which has been a popular destination for Japanese and Japanese companies, are experiencing rising personnel costs. In addition, we are losing market share due to business entry from countries other than Japan. Markets and economies will continue to change.

Therefore, we need to find the right time and the right area to expand overseas with reduced risk. In addition to external factors such as the global economy, the political, economic, and social conditions of the host country, we will also look at internal factors such as the maturity of our own company and business, the strength of our personnel and organization.

If we miss the timing of our overseas expansion.

If we do not make the right timing, we may be forced to withdraw from our overseas operations without achieving our full objectives, even though we have invested a huge amount of money. In addition, there is a possibility that the business situation will deteriorate and the business will be tilted.

In particular, venture businesses, start-up companies, and small and medium-sized companies seeking to expand overseas for the first time often cannot afford to use their own funds alone, so they often receive loans. However, if the plan to withdraw the money is aborted, the repayment plan will be derailed.

Even if we find a suitable area for expansion, we cannot proceed with the plan at a time when there is political unrest on the ground. It’s a wise decision to focus on safety and stability and avoid risky areas, even if the market is a little better.

Even if we make a move at the right time, we must constantly monitor the changing world and local conditions, and continue to make quick decisions and respond flexibly.

The timing of overseas expansion will be decided by financial reserves.

It is also important to match the timing of overseas expansion with the timing of securing funds.

Overseas expansion costs a lot of money. Also, it takes time for the business to get on track and achieve the targeted fund recovery and sales growth, so we need sufficient financial strength to sustain until then.

A preparation period is also necessary for overseas expansion. We prepare the necessary staff, make a plan, and carry out investigations and procedures. Also, you need to make an overseas business trip as a field study. If it is manufacturing, the land and construction cost to build a factory in the local area are also necessary.

These costs can be covered by loans and subsidies. In that case, preferential treatment such as low interest rate can be expected, but the size of the company and the purpose of use may be questioned when using it.

Therefore, if you are considering using a loan or a subsidy, you need to check when you can use it. The system for overseas expansion is difficult to distinguish from domestic working capital when the plan is advanced, so it is better to apply at the start.

Timing of overseas expansion depends on human resources

It is also important to decide when to expand overseas based on the level of human resources. It is essential to invest human resources with a global perspective in order to succeed in expanding overseas.

We need people who understand the local situation, localize their services and products, and have a strategy to target local people and compete with our competitors. It is also important to be able to adapt to different cultures, languages and customs, to utilize local people, and to have communication skills that enable you to meet local people.

The acquisition and development of human resources cannot be done overnight. Let’s work on human resource development by utilizing training programs and a platform for meeting mentors. If a company cannot wait until then, it is better to secure human resources by using outsourcing in Japan and overseas.

The timing of overseas expansion depends on management’s judgment.

Overseas expansion requires determination and enthusiasm. In particular, the strong will and determination of the leader and the actions taken based on that will promote the overseas expansion plan. In preparing for and implementing overseas expansion, you may be forced to make a heavy decision in many situations and phases.

If the top management doesn’t come up with a calm and bold answer at that time, the plan may stop. In foreign countries, there are countries where the speed of contract is unthinkable in Japan, and there are many Japanese companies who miss the chance because they can’t catch up with the timing.

Timing of overseas expansion depends on local conditions

Even if you have all your own systems in place in Japan, if the local market or partners are not ready for the entry of foreign companies, you need to reconsider.

Depending on economic conditions, political instability, institutional reforms, and partner company circumstances, local entry may not be the best time for certain industries and objectives.

Summary

As described above, it is important to identify in advance the timing for establishing a corporate structure in Japan and the timing for establishing a business environment in the host country, and to make thorough preparations so that we can advance overseas whenever the time comes.