Learn about trends and predict the future of overseas expansion

Japanese companies have been actively expanding overseas, mainly in the manufacturing industry, which is seeking cheap labor. Also, based on the Economic Partnership Agreement, Japan’s overseas expansion will increase in the future.

However, the benefits and benefits of overseas expansion are changing with the times. In the past, there were cases in which companies that entered the country to obtain cheap labor withdrew due to soaring local labor costs.

By learning about these changes and responding quickly to them, we can lead our overseas expansion to success. There are a lot of risks involved in expanding overseas, so be careful not to miss any changes so as not to fail.

Along with changes in the global situation, trends in overseas expansion are also changing, and we can understand changes in the world by looking at trends.

Trends in overseas expansion to date

It was in the 1990s when Japan’s overseas expansion became active. There had been such a thing, but this was an opportunity for Japanese companies to expand overseas more and more every year.

After the collapse of Lehman Brothers in 2008, some companies temporarily refrained from expanding overseas, but since then, they have been growing steadily.

The trend toward overseas expansion has been driven by manufacturers that have entered the market in search of cheap labor. Expectations for the Trans-Pacific Partnership (Trans-Pacific Strategic Economic Partnership Agreement) are also part of the way Japanese companies are expanding their businesses overseas.

The situation in Japan was also difficult to increase employment and produce due to the significant appreciation of the yen and higher corporate taxes and labor costs than in other countries. These factors led to an increase in overseas production and an increase in the number of companies expanding overseas.

Trends in the past regional trends

China, which was once called the world’s factory, has been attracting attention in Japan’s overseas expansion. Many Japanese companies have entered China in search of cheap labor, and many Japanese companies are still doing business in China.

Japan has also been actively advancing into other Asian countries. As Japanese companies began to gain attention from around the world, they began to consider expanding into other Asian countries.

Many of the ASEAN countries are friendly to Japan and have the potential to attract Japanese people and Japanese companies. That’s why it’s easy to start as your first overseas or first step to a global expansion.

As a result, the number of Japanese companies expanding into other Asian countries gradually increased.

There are also Japanese advances to Europe, America and South America. European expansion is becoming an attractive option as the EU market grows in size.

The United States is also expected to expand its market as a huge market.

Current trend of overseas expansion

China, which has been a popular destination for Japanese companies to expand overseas in order to reduce manufacturing costs, is no longer a highly profitable destination due to rising personnel costs and the attention and entry of foreign companies. Therefore, there was a movement to develop other Southeast Asian countries as a new destination.

However, education in ASEAN countries has also progressed as a national policy, and other Asian countries are also facing difficulties, such as the soaring personnel costs resulting from the training of engineers in Vietnam. On the other hand, China and other Asian countries began to attract attention in terms of market development due to the rise in GDP and active consumption.

Even in Japan, where domestic consumption is declining, Asia’s powerful market is attractive. Because other countries besides Japan are also paying attention to Asia’s huge market, there are many competitors, but this is a must when considering future overseas expansion.

Also, more and more Japanese companies are advancing into the US, Europe and South America. Japanese companies’ entry into Europe and the United States can be disadvantageous in competing with each other on the basis of their brand power, but the United States, a huge market, is a place of great interest as a foothold for entering the world market.

Some companies aim to export to America by advancing into South America such as Mexico.

Summary

Although it may be difficult for companies looking to expand overseas, there is still room left for them to do so, making it inevitable for companies dealing with shrinking fields in Japan to expand overseas. However, if we want to expand overseas in the future, we need to look at the trend of the past and look for the next step.

In some ASEAN countries, personnel costs have already begun to rise, and it is important to recognize that any increase in personnel costs may occur in any country in the future. We need to take that into account and see if we can get the benefit.

Also, if you are planning to expand overseas in search of an active market, you may not be able to accept the existing products in Japan as they are, so you will need to take measures such as sufficient research and localization. It is also necessary to consider the use of human resources capable of doing so in projects for overseas expansion, and the use of consulting companies and human resources platform businesses that provide useful information and support.

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