Chinese tilt at U.S. market invokes past challenges

Japanese executive get a sense of d�j� vu from his experience introducing Panasonic to the US decades ago, and Chinese firms' current pushLaunching foreign-made consumer goods to a hesitant American consumer buttressed by aggressive local competitors and often antagonistic politicians is a challenge many Chinese firms are just starting to grapple with.self storage For Don Hideaki Iwatani it has defined his career.Offer relevant products, build a strong brand, and nurture consumers are his key messages. But the biggest challenge is handling headquarters back home.The former chairman and chief executive of Panasonic North and South America, Iwatani helped introduce the Japanese electronics brand to the United States in an era when "Made In America" was a common appendage on household items.He often got "stupid requests from headquarters" in Osaka regarding sales and strategy. The firm would sell a tonne of product in Tokyo and ask why you couldn't sell it in the US, he relates."Thank you very much for your suggestion," he would reply, before presenting the board with reasons why the US market was unsuitable. One example: in the 1980s, when Japanese favoured ever more compact electronics, US households preferred large ghetto blasters and shoulder-mounted VHS camcorders. He argued that point for two years.His gripes will be familiar to many overseas executives struggling with the dual challenges of managing a company in a foreign land while fending off impractical expectations from head office.Just over 10 years ago he noticed that a resurgent Apple had developed a new micro hard disk for music storage. It was called an iPod. "I reported this to our engineering department in Osaka … the engineer laughed," Iwatani said.Back in Japan, the iPod was seen as too flimsy for Panasonic's exacting consumers. Having slowly climbed the value chain since the 1950s, Panasonic saw the iPod as a step backwards. Returned products was "the one philosophy Japanese companies care about … even one or two pieces [returned] they care too much," he said. "Apple said within 4 to 5 per cent of exchange is OK."But Apple persevered. In the same manner that Panasonic had revised its earlier transistor technology to introduce innovative radios, cassette players, and home recording systems like VHS and DVD, Apple's iPod led to the iPhone, the iPad and, within a decade, domination of the global mobile handset and music device market."I am very emotional to talk about the story of Panasonic," 68-year-old Iwatani warned. "Panasonic was No1 15 years [ago] when I was US chairman."Panasonic was hugely successful in the US from the late 1960s to the 1990s before stumbling under the onslaught of US and South Korean manufacturers. At its peak, Panasonic had 15 per cent of the global television market, and alongside Sony, the firm garnered global respect for Japanese technology. But it reported a US$10.2 billion loss last year, and recently closed several factories, ending production of plasma televisions.The firm's earlier rise to dominance in the US was an uphill struggle. In 1969, when Iwatani first arrived in America, 90 per cent of televisions were locally迷利倉made. By focusing on products and brand combined with aggressive advertising, Panasonic slowly made inroads into the local market and won over consumers.Currently an adviser to Chinese electronic firms selling into the US, Iwatani sees parallels between the two experiences."In 1960 American people did not trust [Panasonic] quality. Trust only price. Price was the cheapest. Made in China, in the past 10 years, pricing is very important … quality is good but people do not appreciate the quality, only the price," he said, suggesting the challenge for Chinese brands is recognition and differentiation.The first step for Panasonic was the name. Known in Japan as Matsushita Electric Industrial after its founder, Konosuke Matsushita, the name Panasonic (from the Latin "all sound") was chosen in the 1950s for an international audience. A good name is important, Iwatani said."China continuously supplies good products with no name … American people buy TCL and Changhong without any respect to the brand," he said. "Now China has to strengthen their brand. This is about image and advertising."To support product development, he suggested Chinese firms source technology and design from Japan.A continuous focus on quality and brand positioning was only part of the battle. Starting in the 1960s, several US competitors aligned themselves with politicians to attack Japanese firms, and in a precursor to the later debate over Chinese imports, accuse them of stealing American jobs. Iwatani said the campaign was led by US manufacturer Zenith and included attempts to sue Japanese firms for dumping. Zenith eventually filed for bankruptcy and was bought by Korean firm LG.While localising the company can win over detractors – Japanese carmaker Toyota stood out early on by opening car plants in the US for example – Iwatani is adamant quality will determine a firm's success."American people said the Japanese are stealing American business but today nobody thinks about that," he said. "American people love 'Made In Japan'. We are making better products than Americans. The only proof is good quality products at reasonable prices eventually [beats] criticism."One Chinese success story is white goods firm Haier, "because people think it is German". Another is the Taiwanese firm Acer, Iwatani said, citing the computer maker's willingness to invest in advertising. Others have met with a frosty reception. One notable case is Huawei, a technology firm, which recently said it would quit the US market after concerns from Washington that the firm posed a national security threat.In Hong Kong to address the Executives' Global Network, Iwatani asked whether "the dinosaur can dance again?"Suggesting Panasonic's tribulations have spurred constant reinvention, Iwatani is excited by the firm's outflow of luxury rice cookers, massage chairs, and more recently, lithium ion battery packs for Tesla electric cars.The real growth potential, he said, can come from new technologies in green energy, robotics and mass transport. Addressing Chinese firms, but with the advice equally applicable to his former bosses, he urges firms to tackle America with confidence.迷你倉