Japan’s Market Strategy: Key Insights from Competitor Analysis Frameworks

Marketing Strategy: The Necessity and Considerations of Competitor Analysis

Starting a new business involves various risks. Especially for foreigners considering expansion into Japan, there exists information asymmetry, leading to higher risks. To minimize these risks and ensure success in the Japanese market, thorough competitor analysis is essential. This approach allows the construction of digital marketing strategies that surpass the competition.

The objective of competitor analysis lies in comparing one’s company with others, enabling a clear understanding of its strengths and weaknesses, leading to effective strategy formulation. By comparing with competitors, it’s easier to grasp the current position and identify elements for differentiation and uniqueness within one’s own company.

However, a critical point to note in competitor analysis is that competition isn’t limited to existing companies alone. As represented by Michael Porter’s Five Forces, various threats exist for a company beyond existing competitors, including substitute products and new entrants. Conducting competitor analysis while considering the potential emergence of new rivals is essential.

Frameworks for Conducting Competitor Analysis

There are various approaches to conducting competitor analysis, but one method that is easy to execute and offers reproducibility is using frameworks. While there are numerous frameworks available, let’s explore four representative ones: “3C Analysis,” “SWOT Analysis,” “4P Analysis,” and “4C Analysis.”

3C Analysis

The 3C Analysis involves three elements: Customers, Competitors, and Company. Under Customers, one examines who the customers are and what their needs entail. Competitors entail factors such as market share and the direction of competing companies. The Company section comprises evaluations from customers, existing strengths and weaknesses.

• Customer: Who are the customers? What are their needs?
• Competitor: Competitor companies’ market share and direction
• Company: How are customers rating the company?

Considered a cornerstone of marketing, 3C Analysis is integral in devising marketing strategies. By analyzing this, one can grasp points for differentiating their company, paving the way for product or service improvements and the development of new offerings.

SWOT Analysis

SWOT Analysis derives its name from Strengths, Weaknesses, Opportunities, and Threats, enabling the analysis of the internal and external influences on a company.

• Strengths
• Weakness
• Opportunities
• Threats

Internal elements involve factors like brand strength, capital, and service quality, while external factors include competitor analysis, market trends, and legal regulations. Analyzing the external environment and aligning it with internal analysis proves beneficial in shaping marketing strategies.

4P Analysis

The 4P Analysis encompasses Product, Price, Place, and Promotion, allowing for an analysis from the perspective of the company’s sales side.

• Product: Performance, quality, and design of products/services
• Price: Selling price of the product/service
• Place: Sales area, distribution channels, delivery speed
• Promotion: Methods for product awareness – publicity, PR, advertising

For constructing marketing strategies, the 4P Analysis serves as a helpful framework to check for balance. Since it enables organizing information solely from the company’s standpoint, it aids in identifying issues efficiently and devising market strategies effectively.

4C Analysis

The 4C Analysis includes Customer Value, Cost, Convenience, and Communication, forming a framework for planning and developing marketing strategies.

• Customer Value: The aspects where customers perceive value
• Cost: The cost customers are willing to pay and find acceptable
• Convenience: How convenient it is for customers to use
• Communication: Information customers seek

An inherent feature of 4C Analysis is its thorough examination of customer perspectives in selecting services. While the 4P Analysis centers on the company’s viewpoint, the 4C Analysis focuses on the customer’s viewpoint, making a combined use of both frameworks beneficial.

Competitor Analysis of Market Leaders in the Japanese Market

Competitor analysis is indispensable when crafting a digital marketing strategy. Applying the frameworks introduced earlier to one’s own company and competing entities can lead to discovering new insights. At this point, conducting competitor analysis specifically tailored to the Japanese market necessitates research into Japanese competing companies.

For publicly listed competitor companies, gathering information in English is often feasible through investor relations (IR) materials. Even for non-listed companies, several major firms also provide information in English. Identifying and analyzing competitor companies to the best extent possible remains crucial, as even amid challenges, conducting competitive analysis against market leaders can yield valuable discoveries.

Furthermore, it’s essential to analyze not only the Japanese market, where expansion is targeted, but also one’s domestic competitors and global market leaders. This analysis aids in identifying the strengths and challenges of one’s own company.

At BizMOWA, we conduct research services specifically for foreign businesses interested in Japanese companies. We offer research on specific industries, companies within those sectors, and business models, aiming to facilitate your effective entry into the Japanese market.

If you need further assistance with your research, feel free to ask here.