AEA Guiding US Firms to a Soft Landing
By Simon Mansfield
For US software houses--big and small--considering entry into the Japanese market, the smart first step is a call to the American Electronics Association (AEA). The AEA was founded in 1943 and is headquartered in Washington, DC. Its 3,700 members represent all areas of the US electronics industry.
The AEA's Japan office, established in 1984 with cooperation by the US Department of Commerce, is the focal point of more than 400 US electronics companies. It is the only US trade association representing software houses in Tokyo. Over the past decade, A EA Japan has helped numerous US software houses establish and grow their operations in Japan.
Despite a small budget and zero US government funding, the AEA's liaison office in Tokyo has been highly successful in its major roles of assisting US companies to expand their markets in Japan, projecting a positive image of the US electronics industry, and representing the industry in public policy matters. The advisory services offered by AEA Japan include help with setting up an oftice, introductions to potential distributors, infermation on local hiring and labor practices, and advice on localizing p roducts for the Japanese market. The office also maintains a comprehensive library on the Japanese electronics industry and prospective business opportunities for American firms.
Educating companies to succeed
While the AEA's main role is to act as a lobby group for US com panies, David Pollack, director of Japan market development says that the association is very serious about educating US companies on the opportunities in Japan. "Japan is now the largest sin gle market outside of the US, and the fastest growing worldover," he emphasizes, adding that over 100 US software houses are now selling in Japan.
Because the association is completely member-funded, its services are available only to members. Full membership is open to subsidiaries, branches, representative offices, and joint ventures of American electronics companies. Non-US electronics companies can become associate members.
One of the major benefits of being a member of the AEA is the opportunity to build upon an established institutional framework. As some companies have found to their chagrin, success in the US market is no guarantee of similar success in Japan. There are major hurdles to translating home country achievements into similar success in Japan, especially for the newcomer expat manager with no clue about how to adapt to the market or manage local staff. Through the AEA, that executive can tap into the network of US companies that have gone through the process before to help grow his business.
Softening the impact
Although AEA Japan can provide essential information and help to make the initial steps easier, director Pollack cautions that the association is not a consultancy. The individual company must be fully committed to bringing its products to Japan.
For member companies who are so committed, the AEA can offer unique sales opportunities. AEA Japan sponsors networking luncheons and dinners where, for example, US telecommunications companies can meet with the Japanese common carriers. The opportunities for US businessmen to meet their Japanese counterparts can occur in informal settings as well. On an April onsen trip to Kyushu, representatives of regional power companies and US telecommunications companies sat through formal presentations interspersed with sake parties and golf. Other annual events include seminars, the "American Electronics Show in Fukuoka," and a job fair for engineering students.
The AEA also works closely with the Japan Personal Computer Association to bring together US companies with Japanese distributors or other likely partners, and it attempts to provide member companies with access to the Japanese government computer mark et through contact with the relevant ministries. It has arranged local representation on over 25 different policy and standards committees that cover the full breadth of the electronics industry. "Wherever possible, we offer the position to one of the maj or US companies, under the proviso that they represent the AEA, and if any member has a question, they can call and get a direct answer," says Pollack. The key to successful input with policy and standards committees is "making sure pressure is applied at an early stage to ensure that foreign interests are not locked out, as has happened before."
AEA publications
The AEA has two informative (and pricey--Y15,500 each for nonmembers) guidebooks to the Japanese software industry. Software Partners: The Directory ofJaeanese Software Distributors provides detailed descriptions of nearly 300 Japanese companies who ar e open to proposals from foreign software vendors. Companies are indexed by application and OS/platform. Soft Landing In Japan is a guide to what a company will need to do to "crack" the Japanese market. It devotes a full chapter to Japanization and cover s other essential "local" topics, such as distribution, marketing, customer support, and legal issues.
Although some industry experts have criticized the current conditions as containing errors or being outdated, Pollack stresses that both publications are periodically updated, revised, and expanded.
Localizing Software
One of the most important services that the AEA provides to software manufacturers is a clear explanation of how to localize English-language programs for the Japanese market. While some types of software programs may achieve moderate success with virt ually no localization for Japan (popularly known as "Japanization"), they nevertheless remain at a significant competitive disadvantage compared to similar products that support the national language. Some foreign software makers have learned that lesson the hard way, losing valuable time and ceding golden opportunities to competitors who modified their products to suit local requirements. Even a company targeting Western multinational firms should consider that a majority of the employees in such firms a re Japanese.
Although Japanization is a time-consuming process fraught with countless difficulties, several major US computer makers--including, Sun, IBM, Apple, Hewlett-Packard, and DEC--have set up divisions in Japan that are directljl responsible for third-party management of the localization process. For companies such as software giants Microsoft and Lotus, successful localization has helped boost their Japan sales to 10% or more of worldwide revenues.
At the basic level, to Japanize a program, a software house must "doublebyte enable" the software. This is necessary to allow it to accept Japanese kanji, for which a dictionary of 8,000 characters or more is necessary for most commercial software.
Another form of Japanization involves porting the program to the NEC PC98 series of computers, still by-far the most popular platform in Japan. Not releasing a PC-98 version of a program can reduce the potential market of a program by half.
New opportunities
In spite of the impact that DOS/V has had on the Japanese software market, from a software perspective Pollack feels that the current hot issue is not DOS but Windows. "Windows buffers the independent software vendor from OS issues. Because of this, Wi ndows provides huge opportunities [for foreign software houses]."
Despite the recession, Pollack believes that Japan offers immense opportunities for foreign companies. "In fact, it's because of the recession that Japanese companies, which previously would not talk to a foreign company, are now talking to many smalle
r software houses." The opportunities are here, and the American Electronics Association is on hand to help US electronics firms make the most of them.
