New Zealand Exporters To Japan Lead The Way
New Zealand Exporters To Japan Lead The Way
New research from The University of Auckland Business School indicates that of all New Zealand exporters those trading with Japan are among the most export-savvy.
The research was carried out by Trade New Zealand representative Eugene Bowen as Visiting Scholar in Global Business Development at the Business School's Department of International Business. Among his research objectives was to inform Trade New Zealand how to better assist businesses trading with Japan.
Japan is New Zealand's third-biggest merchandise export market, worth more than $3 billion in 2000, and growing steadily.
Top line research results indicate that companies trading with Japan are on average more proactive than overseas firms in creating business opportunities, culturally well acclimatised to the Japanese market and larger than their New Zealand counterparts in other markets.
"These findings reflect the resource intensity and the sophistication of the Japanese market," Mr Bowen said.
Sixty-four percent of the 200 surveyed companies had export managers to direct and develop relationships, even more (78%) engaged in product research, while 87% of companies exporting to Japan had traded continuously every year since beginning to trade.
Surveyed companies visited their market an average 1.4 times a year, were visited once a year by their clients, and relied on the internet (email) for three quarters of their business communications. Most companies traded directly with their clients without recourse to intermediaries.
"It is encouraging that the companies surveyed show good levels of strategy and commitment," said Mr Bowen. "Among exporter attitudes surveyed, the strong agreement on the importance of relationships, even over product attributes, is indicative of a lesson well learned. Exporters to Japan also appear to be more pro-active in relationship building than companies trading to other large but more culturally familiar markets.
"In light of the strong reliance on traditional exporting, and the relatively low levels of in-market investment by companies, the study indicates further scope for Trade New Zealand to play an instrumental role in the provision of competitive intelligence and market contacts.
"There is also evidence of a strong networking effect, and the influence on exporter decision-making of supplier and competitor knowledge. Policymaker interest in network stimulation appears to be a cyclical thing - perhaps it is again time for more intervention in this area."
One unexpected result was the increasing speed of internationalisation among New Zealand SMEs (small and medium-sized enterprises). Of the companies that entered the Japanese market after 1997, 43% established Japanese trading ties within three years of establishment.
"This trend needs validation with a larger sample and with other markets, but it could call into question our assumptions about the need for a thorough grounding in the domestic market before internationalising. This in turn has big implications for the national growth agenda."
A second interesting result was evidence of a steady flow of new entrants into the Japanese market by New Zealand exporters during the 1990s, despite significant recent downturns in the Japanese economy and despite the distances involved.
"The consensus on market prospects is optimistic, with the majority of companies predicting higher growth across the next decade."
Professor Barry Spicer, Dean of The University of Auckland Business School, said Mr Bowen's work reflects the School's commitment to developing innovative partnerships with business and public sector organisations.
"Mr Bowen has brought with him a wealth of commercial knowledge and experience that has strengthened our teaching and research relating to Asia and built on the School's existing expertise in this area."
As a Visiting Scholar, Mr Bowen has worked closely with the Department of International Business and the APEC Study Centre. As well as undertaking the research, he has been involved in developing case study material on successful New Zealand companies in Asia and has delivered seminars to postgraduate and MBA students.
Mr Bowen is on secondment from Trade New Zealand where he has held key positions in promoting the Government's trade development activities in Asia since the mid-1970s.
More recently, Mr Bowen was Trade New Zealand's regional manager for North Asia, comprising Japan, China, Korea, Taiwan and Hong Kong. He is well known for assisting hundreds of New Zealand companies to enter this strategic growth market and has an international reputation for his intimate knowledge of business and culture in Japan, where he spent about 20 years.