N-Partner s.r.o.

     contents

• EAST ASIA vs. JAPANESE MARKET

• Overview of East Asia economy
• Japanese domination in the region
• Why Japan is an attractive place to be?

• JAPANESE BUSINESS ENVIRONMENT

• Facts and Advantages when comparing to European practices
• Threats you might face when starting in Japan.

• HOW CAN N-PARTNER HELP YOU TO SUCCEED AND BE MORE EFFICIENT

EAST ASIA vs. JAPANESE MARKET

# East Asian market grows rapidly with the highest growth of GDP and strong impact to the world's economy.
# Economic integration within East Asia strengthens in every level of the industry.
# Demographics of East China, Japan and Korea is a significant factor of sales potential.

   As seen from the figures, Japan still dominates East Asia and will continue to grow in terms of R&D investments nevertheless China will take the first place in GDP very soon. Japan is a Market of Enormous Potential with Sophisticated Consumers, High Purchasing Power and Discerning Tastes. Here is the Gateway to the East Asian Market with Mature Investment Infrastructure, a Secure and Comfortable Living Environment. Japan leads the world of technology and innovation. Being in Japan is not only Matter of the prestige, but also Great lecture to learn and contribute to the business new perspective. Therefore many international companies prefer the regional headquarters and R&D centers to be located here.

JAPANESE BUSINESS ENVIRONMENT

[ Interesting themes by our experience ]

Economy :

# Japan welcomes investors to bring new business models and creative solutions.
# Ownership of the foreign companies increases until 2008.
# Japan is still the 2nd largest and mature economy.
# Service oriented country with high proportion of manufacturing among OECD. General services contribute by approx. 30% to GDP income.
# High R&D spending
# Japan inward FDI low, changing.
# Majority of the companies doesn't pay the highest corporate income tax among OECD. Consumption tax is 5%.
# Lack of entrepreneurship -> Aging Japan needs entrepreneurship.
# Negotiation process - Japanese don't like rigid contracts. when signing the contract with Japanese both sides must be satisfied, there is still space for renegotiation.
# Common entry strategies - join venture dominates in B2C, B2B commonly with presence in Japan.
# Banking - commonly used banks - City Bank oriented on foreigners, Japan Post Bank - ATM work with western Master and Visa, UFJ Bank.
# Stay in Japan : Absolute minimum to survive in 20m2 apartment, commuting by train with no additional entertainment costs starts from approx.. 160000 yen in Tokyo, 130000yen in smaller cities. Standard life in Tokyo accounts for min. 300000 yen / month.

Politics &legal principals :

# Japan has very stable political system with no change over many decades. New democratic party following prime minister Hatoyama promises major change.
# In principal "What is not allowed is forbidden" in contrary to western world where "What is not forbidden is allowed".

Employment :

# Very low unemployment rate 2-5%
# In general there are no "bad" employees in Japan. Any personnel you choose will try hard to satisfy you and contribute.
# Almost no labor unions.
# Female population hides high potential in full time work force offer.
# Competency might be one of the problems on recruitment of the right HR.

Consumers :

# recommended target - Baby boomers [ Dankai sedai ] :
- 8 million people born In Japan from 1947 to 1949 -> reached statutory retirement age -> have time and money -> concentrated spending power -> high focus specially by the life insurance and travel businesses to lure boomers.
# Consumer behavior:
- Japanese appreciate perfection of the detail, handcraft - monozukuri.
- Highly sensitive, emotional and harmonious - "WA".
- In marketing, history and signs e.g. Chinese characters are often used in associations to be linked with promoted products.
- Believe in continuous improvement therefore tradition and the age is very important.
- No concept of the luxury + "follow" culture = massive retail of the luxury goods.
- Customers are loyal but quality and services demanding.

[ Threats you might face when starting in Japan ]

   Entering Japanese market without sufficient experience brings many threats. In the near past, many "GLOBAL" big players e.g. IKEA, VODAFONE, P&G etc. did not succeeded in Japan on their first stroke or suffered tremendous loss getting a tough lecture from the local market. Those who finally succeeded had to revise their business strategy and admit that Japanese market is absolutely different to the one in western world. So cooled digital persuasive methods and arrogance, did not work at all on sensitive and in many cases irrational customers. The keyword for Japanese consumers behavior from our point of the view would be: "FEEL the QUALITY".

The most significant threats you might face when entering Japanese market:

# language: less than 3% of 120mil population speaks fluent English.

# starting costs are extremely high. According to JETRO`09 starting cost for "Kabushiki Kaisya" = "Ltd." rises up to min 100 000EUR and monthly approx.. 8000EUR excluding employees wage.

# very different customers behavior requiring new unique approach, special strategy and business plan.

# difficult to recruit staff mainly due to the life employment system

# lack of the network, contacts, distribution channel.

# different legislation, business culture, acceptance to the business community.

HOW CAN N-PARTNER HELP YOU TO SUCCEED AND BE MORE EFFICIENT

   N-Partner is here to find the most appropriate business solution and location for our customer`s business. We tempt to soften or solve the major threats mentioned above, giving our clients more space for realiazation of the business idea.
# We speak the language. All of the deeply involved consultants fluently communicate in Japanese and have actual experience of living in Asia.
# We succeed by understanding the differences : We are capable to negotiate with Japanese partners in sophisticated way, bringing the value of the smooth deal.
# Also we understand the real needs of Japanese customers in general, followed by detailed marketing research on the selected target or great feedback on product from the customers.
# We shorten the time, bring to the business effectiveness - It took us years and fortune to understand and learn! That's the time and the capital you don't want to spend, as time in Japan is very expensive.
# We are at home in both Europe or Japan.
# Personal contacts in both Europe and East Asia in wide range of the industries and social communities.
# Network of partners.
# Real time information and brainstorm we want to share.


Our strengths:
# The best selection of the personnel to cooperate with - we have special company and methodology to capture the best talents.
# Professional well trained staff - excluding our internal education program, majority of our consultants went through Japanese education and feel to be experts in their field.
# Internal education program - part of the N-Partner policy on capitalizing human resources.
# Synergy with other activities we have.
# Minimal cost policy - any YEN we spend must be invested wisely with no waste, so that the final value of the services we provide brings the highest possible profit / IRR.