What are the problems and issues faced by companies operating overseas?

Overseas expansion is an attractive path for SMEs and venture companies.
Problems related to market development and sales
shortage of human resources
Lack of understanding of local legal systems and business practices
For SMEs and venture companies to overcome problems and advance overseas
Summary

Overseas expansion is an attractive path for SMEs and venture companies.

Subsidies, consultation services, and information services provided by public organizations are a major boost for companies seeking to expand overseas. Consultants for overseas expansion, platform businesses connecting companies with necessary support, and communities are also active.

In addition, the expansion of the Asian market has increased opportunities for entry, and infrastructure improvements such as the Internet have made it easier to gather information. As a result, even small- and medium-sized companies and venture companies with limited funds are now able to expand overseas, reducing the hurdles and taking advantage of opportunities.

As a result, many small and medium-sized companies and venture companies have started to expand their businesses overseas, and in the process, some companies have faced some problems. It is important for SMEs and venture companies to overcome their particular problems and difficulties in order to succeed in expanding overseas.

First of all, let’s identify and analyze common problems.

Problems related to market development and sales

One of the advantages of overseas expansion is that it is possible to conduct business against the global market, but it is meaningless if we cannot develop markets. Small and medium-sized and venture companies do not have sufficient human resources with expertise in market development, and the small size of the company in Japan makes it difficult to gain the trust of local partner companies.

In addition, due to a lack of funds, you may not be able to spend enough money to get advice from consultants and various experts and to conduct detailed field surveys. Because information and research are essential to market development, use affordable public services and use grant and grant programs to obtain sufficient information.

As a result of force majeure overseas, we may be forced into financial difficulties due to changes in the local economy and environment. A sharp decline in sales could deal a serious blow to small and medium-sized and venture companies, and could also have an impact on our headquarters in Japan.

shortage of human resources

Overseas business requires human resources with expertise, foreign language skills, and a global perspective based on overseas business experience. Therefore, in order to expand overseas, it is essential to recruit and develop human resources and to organize specialized departments and teams called overseas business divisions and planning offices.

However, securing and developing human resources takes time and money, and it is sometimes difficult for small and medium venture companies to secure such specialized human resources and form teams.

Specialized departments plan, gather information, conduct research and analysis, negotiate with external support agencies, and conduct field visits to prepare for overseas business. Because these processes are costly both qualitatively and quantitatively to carry out in parallel with domestic operations, it is desirable to have a full-time assignment.

This lack of human resources for overseas business is also a problem for SMEs and venture companies. This lack of human resources can cause delays in overseas expansion or problems in management after expansion.

Lack of understanding of local legal systems and business practices

Understanding of local business practices is likely to be a problem for SMEs when they expand their business overseas. There are also problems with local recruitment and management.

If this is the first time for a company to expand overseas, it is necessary to gain an understanding of the local market through information gathering and market research regardless of the size of the company.

However, at the stage of information gathering and research, the quality of information and research may differ depending on the size of the company. Companies with limited funds start their businesses without enough information.

If you don’t understand business practices, you can’t have effective marketing strategies, and local companies have no chance of winning. Localization is also necessary for foreign companies to survive in the host country, but it can be difficult because of the difference in temperature between Japanese and local employees.

For SMEs and venture companies to overcome problems and advance overseas

It is important for SMEs and venture companies to solve these problems one by one in order to successfully expand overseas. Subsidies and grants can help address the lack of funds underlying many problems.

It is also important to ensure the stability of the domestic business in order to expand overseas. Looking at the future of the market, I think it would be desirable to expand overseas in a few years or 10 years.

It is also important to clarify the reason, purpose, and vision for advancing into the market and to proceed with the plan. It is necessary to respond flexibly to changes in local needs without changing the direction solely based on the will of management and certain employees. We need to avoid missing business opportunities on the ground to wait for Japanese decisions.

As a result, a sense of speed, which is the strength of small and medium venture companies, is an important factor in successfully expanding overseas.

Summary

As described above, it is necessary to assume that there will be a number of issues that must be resolved before overseas expansion is put into practice and on track. Even if it was a small problem in the beginning, the problem can grow as the site grows, so you should always try to solve the root of the problem while it is small.