SPLL is a division of world famous precision manufacturer of consumer goods in Japan . In the recent years, they have perfected a highly precise manufacturing method for a very expensive major component used in industrial printers. Initially only focused on Japan domestic market, in order to really make the business viable, they needed to deploy a global marketing strategy. Although other product divisions within the enterprise has office set up in the USA , since the resources are already stretched tightly, for SPLL, it meant to find its own resources if they really wanted to enter the US market.
Initial cost estimation will place enormous burden on the operating budget. Plus it also meant to have someone who is familiar with the US business culture, strong in English communications and knows how to work with US companies well. For basic training of such a person, it will take a minimum of 2-3 years of training to obtain.
Additional problem was in geographic size of the US market. Where to locate the office, which area to focus on, expense required covering the territory, etc. there just seems to be too enormous of a job to start up in US.
SPC simply did not have the luxury of time nor money to make it happen quickly. By letting the situation go, SPC will be suffering from no market share in the US . But if the North America market does not come up quickly and contribute to the bottom line, the very existence of the group can be jeopardized. How does a small division in a large corporation find timely and affordable resources in achieving its corporate objectives?
Luckily, SPC knew someone to depend on. ABC's Mr. Chu paid a timely visit to SPLL. With help from one additional market information consultant, Mr. Chu offered ABC's service to help SPC set up its presence in the US . With Mr. Chu's vast high tech industry background and smooth and collaborative work style, SPLL is reaching major customers in US and building the intimacy it takes for the success of its profitability.
SPLL had another market it wanted to investigate – China . Although Japan and China are close geographically, it is culturally close but no cigar. The two are still as different as day and night on many key issues. Plus, meeting in English between SPLL and any of the prospective customers in China just does not do negotiation of two parties any justice. There was just not enough of the good vibe necessary to precede and close a deal.
One particular case was the issue of pricing. SPLL had very sensitive approach to the quality level and priced the product offering accordingly, but one of the prospective customers in China offered to pay only about ½ of SPC's offer price. SPLL gave up in long sigh and walked away from the negotiation table. It was in SPLL's view that there is no possible way they can close a deal with the Chinese and still make money for them.
Should you continue to deal with the Chinese company at that point?
ABC advised SPLL to proceed in the negotiation, being aware that Chinese practice is to bargain hard for the best price. SPLL team applied one simple yet, not generally known rule in dealing with the Chinese, under the facilitation of Mr. Chu, and the China companies loosened up, and negotiations are proceeding. New levels of understanding are being reached.
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