Growth Strategies for Small and Medium-sized Companies in Japan
The recent recession has hit Japan’s small and medium-sized enterprises hard. But attendees at the Swedish Chamber of Commerce and Industry in Japan’s recent Knowledge Evening also heard how three companies have not only survived the downturn, but set the stage for growth too.
Fujio Ota, president and CEO of Tumlare, said that investing in his employees has paid dividends. “Once outside conditions improve, employees function as the driving force, bringing about the smooth recovery of business,” he said. Tumlare is a European tour operator with 65% of the Japanese tour market to Scandinavia.
Ota knew he had to cut costs to survive, but he found an alternative to culling his workforce. The results were astounding. The plan reduced costs by ¥1 million per employee.
“Many companies cut their training budget in severe times,” said Ota, “but we did the opposite – we invested in training.” His sales team gained the skills to negotiate with suppliers, using empathy and understanding to help them close deals. “Of course some suppliers are tired [of negotiation],” he said, “but in exchange for short-term concessions, our salespeople offer long-term business.”
Ota joined the training sessions and attended staff meetings at all levels, while dipping into his own pocket to pay for company events. “Success for the company was no longer about me,” he said, “but about us.”
Jacob Laurin, Japan country manager of Sweden’s Smoke Free Systems, which sells innovative open-design smoking cabins, likes to keep things simple. With a staff of just four, he sells a single product, and outsources much of his work to local partners. “We don’t want to build up huge sales organisations; we want to give our partners tools for service and installation,” he said. This has made operating in Japan easier, especially at a time when the Japanese yen – Swedish krona exchange rate went “a little haywire.”
With limited financial resources, Laurin doesn’t advertise his product, and instead approaches customers directly. Being a small, little known company certainly doesn’t help. “You have to be a sales person that sells the opportunity for the meeting, not the product,” he said.
Like Ota and Laurin, Takeshi Fujiwara, president of medical equipment manufacturer Gambro K.K., stressed that capable staff were essential. “I must have a team who can make it happen,” he said. Fujiwara, however, has no qualms about weeding out unproductive employees. In 2006, he replaced 80% of management. His smaller team focused on a single product, resulting in a 40% increase in sales.
Gambro also revamped its sales system. “We need a good weapon,” said Fujiwara. All employees have access to an internal database of medical information, while the sales team is updated daily on any new developments. Customers were sorted into categories and plotted on Google maps, allowing sales members to make a maximum 80 calls per month.