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Ten Big Companies That Failed in Japan


Wendy's is the latest to learn that the Land of the Rising Sun isn't so bright.

From Hello Kitty backpacks to citizens marrying girlfriend simulators, it's safe to say that priorities in Japan are slightly different than that of those in America. Obviously, millennia of distinctive cultures, religions, and development will produce two juxtaposed countries with unique tastes and traditions -- no matter how connected they presently are via the web and social networks.

Concurrently, a brand that finds immense success in one country won't necessarily catch on in another. And the first to discover the differences are often times the brands themselves.

Late last week, Wendy's (WEN) announced it will be shutting down each of its 71 Japanese locations and effectively withdrawing from Japan by the end of the year. Similar to the scenario in the states, Wendy's was being consistently beaten by the business that McDonald's (MCD) generates, but unlike Japan, Wendy's has managed to hold its own against the Golden Arches in the good ol' U.S. of A.

The closure marks the end of a 29-year presence in Japan and is a testament to the differing tastes of Eastern and Western countries. But Wendy's is hardly the only -- or the most surprising -- well-known brand not to garner equal success in Japan.

Despite local buzz marketing and the global stranglehold it ostensibly possesses, Google (GOOG) is having great difficulty catching on in Japan. There, Yahoo Japan (YHOO) controls the commanding share of the market with 56.5% of all search queries, as opposed to Google's 33.7%.

A major reason, analysts say, for Google's struggle is Yahoo Japan's cultural history and local identity -- a problem Google has yet to overcome. Google is still seen as an American company which is a detriment compared to Yahoo Japan's familiarity with the country. Speaking with The New York Times, tech analyst Nobuyuki Hayashi described the dichotomy simply.

"Yahoo Japan is a Japanese company, and most of their employees are Japanese people who fluently understand how the Japanese mind-set and business work," he said. "But Google's still a foreigner who's learned how to speak some Japanese."

Nevertheless, true to the company's character, Google refuses to be daunted in light of any setbacks and continues to produce buzz-worthy stunts and marketing initiatives to sway local trends -- localized splash pages for the search engine, tailored branding ads for the country, and a publicity stunt involving 2,500 balloons and airborne passersby. As long as Google trails anyone in any country, it will expectantly fight the good fight to turn it all around.

For that matter, it wouldn't be the first company to do so. For a while, Apple (AAPL) struggled to gain a foothold in the Japanese cell phone market with its iPhone. Albeit a revolution in technology here in the States, the iPhone and its features were an old hat and somewhat lacking to Japan's hipster set. Before the introduction of the iPhone 3GS, the device's sub par video and camera support were keeping it behind its Japanese competitors which developed those features early on. It wasn't until Apple released the advanced 3GS did locals finally warm up to the smartphone -- making its 8GB and 16GB the top two bestselling smartphones in July 2009. In short, Apple did what Nokia (NOK) and Motorola (MOT) failed to do -- succeed in Japan.

But when a sluggish economy can hinder high fashion outlets like Versace, Sephora, and French Connection -- and money laundering can close the private banking branches of Citigroup (C) -- succeeding and prevailing in Japan is often an insurmountable hurdle for a global brand.

Minyanville presents 10 more companies which -- for a variety of reasons -- failed in Japan.

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