Suitable
A Western company that enters a new market will typically start by trying to attract customers to its existing product, to transfer what it already has developed.
In particular, it can be hard for a company that’s used to adding more features and moving upwards in price every year, but now instead, has to try to make simpler and cheaper solutions.
An Asian company will be more likely to start by listening closely to market needs and identifying an opportunity. If the users’ circumstances are different – because of culture, or simply because they don’t have as much money – the Asian company will make adjustments and offer features and a quality that matches the customers’ need and budget precisely. Not too much, and not too little to be of use. The key word is suitable.
This sounds obvious, but for an established Western company it can be hard to be responsive, because it may mean that it will have to let go of some of its usual ideas of how to do things - even letting go of some of the core values that made the company successful, well-known and trusted in its home market.
Letting go
When you enter a new market, it’s often necessary to find local partners. When you cooperate, you need to be flexible and find solutions that works for both parties.
Asian companies will typically be ready to make even large changes in the way it operates in order to make the alliance succeed. Western companies, on the other hand, are often stuck in an old-fashioned colonial mindset, where they expect the foreign company to change, but it considers itself above adjusting to others.
The key word for the Asian company is letting go – being willing to change in order to follow new opportunities.
Fluidity
Generally, mature Western companies aim for stability and predictability. Their system is not geared for fast and ongoing changes. In Asia, the culture is much more tolerant to change. Business plans are not meant to be a strategy for forever, contracts can be adjusted if circumstances change, the production is much more flexible because it’s based on manual labor. All in all, there is a much more fluid business environment which supports a very dynamic economy.
So the keyword is fluidity.
Catch up context
Finally, we have to consider that Western and Asian companies come from very different positions. Western companies are still usually the leaders when it comes to technology. Their strategy is to keep developing radically new solutions in order to justify that their products are typically more expensive. So they spend a lot of resources on research, development and analysis.
Their Asian competitors are catching up. They look at what the Western companies offer, and try to come up with versions
that are cheaper or better suited for their home market.
But catching up, by imitating or adjusting your competitors solutions, is a lot cheaper and faster than innovating from scratch. When you follow others, you know where you need to go – until you catch up, and you have to take the lead.
For now, Asian companies are in catch up mode – but as Japan, Singapore and Korea have experienced, that is a passing phase.