Has your Japanese subsidiary begun to show structural losses in recent years? This can happen, even after a successful start-up. Japan Interim Management staff becomes your local management to get the subsidiary on track again.
If your subsidiary is showing losses, you need to act quickly. However, hiring a new managing director takes time, and you may have trouble finding a good person willing to assume responsibility for a loss-making operation. Such a person may doubt the viability of the company and may hesitate to stake their own future on it.
With JIM's Turn-Around Management services, improvements can be made quickly. Mr. Enters is appointed as managing director and manages the company for a predetermined period. Assisted by his Japanese team, Mr. Enters can usually turn the company around in two years.
JIM's management fee for such service is similar to the cost of a local managing director salary. This means that operating costs should not increase substantially as a result of JIM's involvement.
In addition, head-hunting cost to find a new managing director are normally at least 5 million yen. You can save time and money by using our management service before you hire a permanent manager.
JIM can usually introduce a permanent managing director for the company by the time the JIM contract is about to end. This assures long-run continuity for the company. Such introduction is done at no extra cost.
Examples of Turn-Around management assignments Turn-Around #1: Consumer Goods Manufacturer
A major European consumer goods manufacturer had arranged to sell its product in the Japanese market via a joint venture with a major Japanese corporation. Staffing of the joint venture, as well as all sales channels, were taken care of mostly by the Japanese partner.
However, the Japanese partner was producing and selling products competitive to the European product via their own sales channels. This conflict of interest resulted in losses and declining sales. If the structure remained unchanged, the venture would surely continue its downward spiral.
To regain control, the company negotiated to obtain a 51 percent majority in the joint venture. Managing the business themselves meant hiring management, sales, and administrative staff on short notice. It also required setting up sales offices in four major cities in Japan.
Within 14 months, the company, under management by Mr. Enters, hired 70 people, started up all four sales offices, set up all computer administration, and created all personnel functions. The European company did well on its own and continued to grow.
Turn-Around #2: Corporate Training Center
A major European corporate training organization had become very popular with Japanese executives, who would travel to the UK to attend training programs. In the mid-80s, the organization decided to open its own training center in Japan to service Japanese multinational corporations better. After a few years, the Japanese center began to show red figures.
During the first few years, the European head office covered the losses, hoping the situation would improve over time. However, by the beginning of the 90s, it became evident that the losses were structural and that the Japanese management was not able to remedy the problem.
The company asked the Japanese managing director to retire and called in Japan Interim Management to start a turn-around operation, with Mr. Enters appointed as managing director for a two-year period.
During the first year of the turn-around, costs (and losses) went up temporarily as corrective measures were put in place. However, in the second year, the company broke even for the first time in six years. It now prospers and has started to grow.
Turn-Around #3: Industrial Production and Sales Facility
In the late 80s, a major industrial service company started its own production and sales facilities in Japan. With the turn-down of the Japan economy in the early 90s, the company started to show huge losses.
For many years, the Japanese management was asked to keep strict cost control. This did not yield results, and personnel began to protest against this style of management.
To save the operation, a turn-around effort was launched. The Japanese managing director was asked to retire, and Mr. Enters and his management team were put in charge of the company. Mr. Enters was appointed as managing director for a two-year period. Staff changes were made, and money was spent to improve production facilities.
As a result of the turn-around operation, customer satisfaction increased, as did turnover. The company broke even in the first year of the turn-around and became very profitable from the second year on. The company is now gaining market share, in spite of a very competitive environment.
Turn-Around #4: Seed Technology and Processing Factory
A European company in the seed technology business had set up their own seed processing factory in Japan.
After six months of operations, the results were not as expected, because the product USP was not yet well understood by Japanese customers. Strong competition from similar Japanese products also kept customers from buying.
JIM was asked to assist. For a period of six months, practical help and assistance were given in marketing and sales. Simultaneously, JIM staff negotiated a takeover of one of the Japanese competitors.
By adding the turnover of the competition to the operations, this takeover provided an instant increase in market share for the company. It also allowed the company to acquire some very good executives from the competition. This gave the company an instant increase in credibility and volume sales in the market.
Quick start-up for your Japanese business presence.
JIM provides a comprehensive office start-up service. This service allows clients to set up their own office quickly and efficiently. Many of our clients are not satisfied with their Japanese sales agents. Once the client decides to cancel the agency contract and continue on their own, JIM provides a comprehensive service and eventually hands over the operations to an expatriate or locally appointed manager.
The whole process usually takes 6 months.
Office set up
Marketing, Sales and PR activities
Coaching of the client's permanent general manager after the JIM assignment ends
Start-Up Example #1: Japanese Partner for Manufacturer
A European manufacturer of conveyor belt systems wanted to export their product and license their application technology to a Japanese partner. The company asked Mr. Enters to assist in negotiations and give advice on the structure of the export/license contract. After six months of negotiations in Europe and Japan a contract was made. The Japan Interim Management staff assisted during the first deliveries of the product and saw to it that the project got off to a good start.
Start-Up Example #2: Testing and Certification Lab
A Dutch semi-government institute asked JIM to set up a testing and certification laboratory. Testing and certification is required for type approval of Japanese export products to the EU under the European directives.
For a period of two years JIM managed the company. We set up the test facilities, incorporated the company, rented the office facilities, purchased all the equipment, recruited six test engineers, and set up the administration, accounting procedures as well as the social security systems. Subsequently we trained a full-time manager from the Dutch head office to run the company on a day-to-day basis.
After the first two years of operations, Mr. Enters remained on the board as an outside director to assist the company on strategy matters.
Start-Up Example #3: Automotive Software Company
A Dutch semi-government research institute had been selling automotive crash simulation software in Japan via an agent. They wanted to set up their own sales office and cancel the agency contract, because the agent was not able to give sufficient technical assistance for the product to the Japanese car industry.
JIM negotiated with the agent to cancel the contract. We then for a period of six months managed the company. We set up the test facilities, incorporated the company, rented office facilities, purchased all equipment, recruited engineers, and set up the administration and accounting procedures, as well as the social security systems. Subsequently we trained a full-time manager from the Dutch head office to take over the management and together made a business plan for the next three years.
The transfer from the agent to a 100% owned company went very smoothly and the new company gained respect from the Japanese automotive industry for its effective technical assistance. The company became a success.
Start-Up Example #4: Children's Wear Sales Office
A well-known brand of Dutch children's wear was sold in Japan via a sales agent. The agent ran into financial difficulty and the Dutch manufacturer took over their operations, including management and sales staff.
The management was not trained to operate as a full daughter company of a multinational corporation and management information and accounting systems were inadequate. This caused friction between the head office and the local staff.
For a period of six months JIM staff assisted in creating company rules and regulations, set up the management information and financial systems, set up computerization for warehousing and the direct shops, trained management and reviewed salary scales.
This solved the problems between the local staff and head office management, and the company continues to do well in spite of a very competitive environment.
Sending one of your
own staff members to live in Japan may eliminate
the first two problems. But then you will find yourself with a few new
Liaison Example #1: Candy Manufacturer
A European manufacturer of confectionery was approached in the late 1970s to sell a well-known brand of candy to a major Japanese candy manufacturer. Initial purchases were large and very important for the European exporter. However, after one year the volume started to drop drastically, and this trend continued for two more years.
The European manufacturer decided to appoint Mr. Enters as liaison officer to monitor the market and to coordinate marketing and sales activities with the Japanese manufacturer. Very quickly, Mr. Enters learned that the Japanese manufacturer had only used the European brand for a one-time sales campaign and had no further interest in positioning the brand in the market. In fact, they refused to discuss the matter with Mr. Enters.
Another Japanese importer was recruited as import agent. But again, after a large initial volume, sales dropped sharply after the first year.
Next came a major change in strategy. Mr. Enters coordinated an agreement with a major U.S. distributor of similar products to handle marketing and sales in Japan. A well-balanced cooperation agreement was made, and the product has now become one of the best-selling imported items in the confectionery trade.
In this situation, the Japan liaison office was absolutely essential for keeping in touch with the market, monitoring the agent's commitment, and taking decisive action at the right moment.
Liaison Example #2: Automotive Component Manufacturer
After almost ten years of negotiating and submitting samples, a European automotive component manufacturer finally landed contracts with two major systems makers in Japan. The price for the
European product had become extremely favorable compared to the Japanese competition.
As part of the deal, though, the Japanese buyers insisted that the European supplier give them the same level of service as the Japanese suppliers. Production, quality control, and purchasing staff needed to be able to send faxes to the supplier in the Japanese language and to receive responses in a reasonable time.
The only way to achieve this level of service was to set up a liaison office in Japan to keep in daily contact with the buyer's staff on all levels. Japan Interim Management was contracted to operate the European company's liaison office. In the beginning, JIM staff did not know the product at all. But very quickly, they were able to get up to speed and provide good customer service in a timely manner. Over time, JIM staff gained the expertise to conduct all but the most technical discussions.
In the first year, many problems arose with the quality and delivery time of the product. However, because of the local coordination these problems could all be overcome. The sales volume quickly reached substantial levels.
Liaison Example #3: Fruit Exporter
A US-based company exporting oranges, lemons, and cherries to Japan wanted to expand its customer base. The bigger Japanese trading houses all have offices in the U.S. and don't need to buy via a U.S. exporter. However, the smaller trading houses in Japan do buy from exporters.
By setting up a liaison office, the company created a local presence in Japan, which greatly increased its credibility in the market. All other things being equal, the Japanese importers decided to buy from the US exporter, who had shown a real commitment to Japan. Trade increased dramatically.
Liaison Example #4: Packaging Product Company
For a period of three years, JIM ran a "virtual" office for an international packing company to import and sell their products in the Japanese market. We incorporated a local Japanese company and set it up in the JIM office. JIM staff managed to hire away from the competition one executive with intimate knowledge of the product.
The JIM staff provided guidance and management to this one person. All secretarial assistance and administration/accounting was handled by our JIM staff for a fixed monthly fee.
After the initial three years of operation via imports from the JIM premises, a local production contract was negotiated with a prominent Japanese producer of packing material.
Market Research Example #1: The Right Market?
A European producer of bottle-filling equipment was interested in the potential Japanese market for their product. Japan Interim Management carried out a study of the market, the local competition, and the potential for the product. JIM also advised the European producer about the pitfalls of selling this kind of product in Japan.
Market Research Example #2: Technology Transfer
A major European engineering firm had licensed some of their technology to a Japanese company. They were now interested to know if there were more opportunities for their technology in the wastewater treatment sector. JIM advised them on the state of the market in this field and on the scope of future governmental budgets for their kind of technology.
Market Research Example #3: Competitive Analysis
A European manufacturer of industrial safety devices was selling its products on a small scale in Japan. Some of their major competition in the global market was Japanese. Japan Interim Management was asked to analyze the market and the competition for these products and to advise on the launch of possible new technology in this field.
Sytze Enters has the Dutch nationality. He studied business administration at Nijenrode University in Holland and continued his studies in the U.S.A. at the University of Oregon. In 1973 he came to Japan and studied the Japanese language.
In 1974 Mr. Enters founded ENMARLI Ltd., a company specializing in assisting European (mostly Dutch) companies' operations in the Japanese market.
In November 1992, Mr. Enters established Japan Interim Management, a company providing management services for start-up, turn-around, and corporate restructuring. JIM staff assumes full management responsibility for its clients' Japanese operations during contract periods up to two years.
In his capacity as interim and start-up manager, Mr. Enters has served as managing director of Heineken Japan, Balzers Japan, Van Melle Japan, Canning Japan, Precision Fibre Optics Japan, Nmi Japan, Airpack Japan and Michael Weinig Japan. He is a director of the Netherlands Chamber of Commerce and is active as a committee member of the European Business Council.
Profile of Teruyoshi Mukoyama
Mr. Mukoyama is a Japanese national. He studied at the Rikkyo University in Tokyo.
In 1972, he founded 3P, an advertising and promotion company working mainly under contract with Dentsu and other major Japanese advertising agencies. Mr. Mukoyama served as account executive for major Japanese clients, such as Nissan, Yamama, Kao, and others.
Having sold his company in 1988, he served as
director of marketing and advertising with Heineken Japan from 1989 to
In 1992 Mr. Mukoyama joined Mr. Enters in a
partnership to establish Japan Interim Management.