Micro Processor Systems, Inc. Strategy Development and Implementation in the Japanese Market

Abstract

In the next six years MPSI should be able to make large gains in the Scan-tool and NOx tester markets. Furthermore, they can expect to make small gains into the very competitive 4-gas analyzer market. As their is excessive competition and few channels of distribution for engine analyzers, I see little or no reason to pursue the marketing of such a product in Japan. As MPSI's initial entry process was flawed by unfortunate timing with Toyota Motor Company, having "sales-in-hand" before opening their Japanese office did not occur. Furthermore, the lack of a product localized for the Japanese market leaves us at a competitive disadvantage. This is a liability that must be overcome before any type of a sales base will be established. Fortunately, the competitive advantage they have sustained by teaming up with Nihon Dynatech K.K., both in terms of office space and management capabilities, will nearly guarantee that further stages of the entry process are not flawed. MPSI has been able to reduce its entry costs to a level well below that of its competition and coat-tail on the success of one of Dynatech's best overseas offices, Nihon Dynatech K.K. The current arrangement has allowed MPSI to properly evaluate the Japanese market. If our commitment to this market increases, MPSI must hire a Japanese sales engineer to service its equipment and push its products to the corners of the market. While MPSI has a product line that is far advanced technologically, it might actually be too advanced for the current Japanese market. As such, MPSI must decide if they are willing to pay the price, possibly lower return on investment, to successfully position itself for the emerging Japanese market. If MPSI is serious about the Japanese market, I strongly recommend keeping the current situation until a Japanese sales engineer can be placed in the Nihon Dynatech K.K. office. That person could then pursue the establishment of sales through a aftermarket distributor such as Iyasaka or Banzai. After MPSI has products designated to the Japanese market and has built its reputation among Japanese distributors (2-4 years), it will be better positioned to go after OEM contracts, evaluate growth estimates, and profit potential in Japan.