Adapt­ing to lo­cal cul­ture key to suc­cess of for­eign com­pa­nies

Honolulu Star-Advertiser - - WORLD | FOCUS ON JAPAN - By Shusuke Mu­rai

Ad­just­ing to cul­ture in Ja­pan is of­ten a chal­lenge for for­eign res­i­dents. The same goes for for­eign com­pa­nies.

Some global re­tail­ers have en­tered the Ja­panese mar­ket and es­tab­lished them­selves as beloved brands by adapt­ing to the lo­cal cul­ture, while oth­ers strug­gle to win the hearts and minds of dis­cern­ing cus­tomers.

McDon­ald’s and Star­bucks are two ex­am­ples of global re­tail­ers that have suc­cess­fully taken root in the Ja­panese mar­ket by adapt­ing their ser­vices to the con­sumer mind­set, said Michi­aki Tanaka, busi­ness ad­min­is­tra­tion pro­fes­sor at Rikkyo Univer­sity in Tokyo.

“These com­pa­nies are so deeply rooted in the Ja­panese mar­ket that some cus­tomers may go to their stores with­out notic­ing they are ac­tu­ally for­eign com­pa­nies,” he said.

McDon­ald’s has tasted both sweet suc­cess and bit­ter set­backs in Ja­pan. The U.S.-based ham­burger chain in Ja­pan opened its first out­let in Tokyo’s posh Ginza district in July 1971. Since then, the com­pany has grown to be­come the coun­try’s largest burger chain with nearly 2,900 stores as of Au­gust.

But dur­ing its 46-year his­tory in Ja­pan, the com­pany had it share of trou­ble.

In 2014, McDon­ald’s made head­lines af­ter a sup­plier in China was found to have shipped ex­pired meat used for chicken nuggets. And in 2015, the com­pany sold food that re­port­edly con­tained for­eign ob­jects, in­clud­ing hu­man teeth in an or­der of french fries.

The string of food safety scan­dals tar­nished McDon­ald’s once-glow­ing im­age in the eyes of Ja­panese con­sumers.

The re­sult was a $308.42 mil­lion net loss in 2015, the largest loss since McDon­ald’s Hold­ings Co. (Ja­pan) went pub­lic in 2001.

Kenji Kaniya, a di­rec­tor of McDon­ald’s Ja­pan’s PR de­part­ment, ad­mit­ted that the com­pany’s re­sponse dur­ing the time of crisis was “not sin­cere enough” to give cus­tomers peace of mind. “It is re­gret­table that we did not lis­ten to our cus­tomers’ voice more closely,” he said. “I think we might have been ar­ro­gant at that time.”

Af­ter the scan­dals, McDon­ald’s Ja­pan cre­ated a re­vi­tal­iza­tion plan and tried to cre­ate a sys­tem to bet­ter re­spond to cus­tomers. The ef­fort in­cluded the com­pany’s Kodo smart­phone app, which en­ables cus­tomers to post pos­i­tive and neg­a­tive feed­back and re­ceive a dis­count coupon for the ef­fort, he said.

Thanks to its re­con­struct­ing, the com­pany bounced back in 2016 by earn­ing a $47.39 mil­lion profit. It ex­pects profit will grow to a record $176.5 mil­lion by the end of 2017.

Star­bucks is an­other for­eign com­pany that has gained enor­mous pop­u­lar­ity in Ja­pan. Star­bucks opened an out­let in Tokyo’s Ginza district in Au­gust 1996 — mak­ing it not only the first Star­bucks in Ja­pan but also the first out­side North Amer­ica. Now with nearly 1,300 out­lets in all 47 pre­fec­tures as of Au­gust, Star­bucks’ brand has be­come vir­tu­ally syn­ony­mous in Ja­pan with fast-ca­sual cof­fee shops.

The key to Star­bucks’ long-term suc­cess in the coun­try has been “re­spect for the cul­ture of the lo­cal com­mu­nity,” said No­rio Adachi, a di­rec­tor at Star­bucks Cof­fee Ja­pan Ltd.’s cor­po­rate af­fairs de­part­ment.

“Ja­panese con­sumers like to try new things … so when some­thing new comes from a for­eign coun­try, it of­ten gets at­ten­tion on TV. And peo­ple will stand in a long line in front of the store with­out hes­i­ta­tion,” Adachi said.

Adachi said the key to long-term suc­cess is to gain ac­cep­tance as a part of the com­mu­nity by re­spect­ing the lo­cal cul­ture.

In a change from its stan­dard-is­sue decor, Star­bucks opened a Ja­panese-style coffeehouse in the an­cient cap­i­tal of Ky­oto in June. Housed in a cen­tury-old two-story town­house in Ni­nen­zaka near Kiy­omizu Tem­ple, the store features a tatami-floored room, the com­pany said.

AS­SO­CI­ATED PRESS PHO­TOS

From the Ja­pan News, Yomi­uri Shim­bun and Ja­pan Times

Be­low, cus­tomers have a meal at a McDon­ald’s restau­rant in Tokyo. The U.S.based com­pany has nearly 2,900 stores in Ja­pan, the largest burger chain in the coun­try.

Pedes­tri­ans walk past Star­bucks in Tokyo’s Shibuya shop­ping district Sun­day evening. It is one of the busiest Star­bucks in the world. The comapny now has nearly 1,300 out­lets na­tion­wide.

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