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How to Segment the Japan Market


By Davis Huang

Our first challenge was to select a primary target Keiretsu. We focused on Vertical Keiretsu, narrowed the list by surveying our current relationships in Japan, and looked at the total market potentially available within the boundaries of each Keiretsu community.

Keiretsu organizaiton example Example of a Typical Keiretsu Organization

We selected our target Keiretsu segment, and began discussions with the opinion leading business within the Keiretsu - our competitor, the incumbent semiconductor company.

The semiconductor supplier within the target Keiretsu agreed that our FLASH product was unique. As we continued discussions, and began establishing trust within the semiconductor group, the Japanese executives helped us identify promising applications among the Keiretsu system makers, but we understood the long process ahead of us to build relationships within the Keiretsu. We considered our options and the sales development investment implications. We decided to offer the Keiretsu semiconductor a different business model, a true partnership, one that was new to us but that might solve our short term sales problem while building long term trust. We proposed to license our FLASH technology and embed our memory on custom system chips that the Keiretsu semiconductor company would design. Our Company's ultimate goal in entering the Japan memory market was to realize significant growth in standard product volume, but our proposal to license our technology had several advantages.