By Ames Gross, President and Founder of Pacific Bridge Medical
This blog post was also published on MedTech Intelligence.
Strong relationships of trust between Western executives and Asian executives are the key to growing your medical device business in Asia. Here are 3 helpful tips for Western medical device executives to keep in mind when looking to build positive, mutually beneficial relationships with their Asian business partners.
1. Put the Time and Effort to Form a Reliable Relationship Based on Trust
Most American executives can establish a business relationship with another American or European executive through one or several phone calls, or a meeting. This is not the case in Asia, where introductions by mutual friends or hard work building a strong relationship over a number of years are required. U.S. medical manufacturers should be particularly careful in how they approach looking for a distributor in Asia.
Since Asians put their trust in personal relationships, an Asian distributor who does not have some type of personal connection with the foreign device manufacturer may misrepresent himself, copy the manufacturer’s technology, or cheat the manufacturer. In this situation, the Asian distributor’s reputation is not on the line if there were a strong personal connection. For this reason, meeting device distributors for the first time at a trade show and shortly thereafter entering into a contractual relationship is not a good business decision.
Relationships in Asia take time to develop, and getting introductions from friends, colleagues, or classmates is the key. For example, if an Asian distributor is introduced by a friend who went to the same college as an executive at a U.S. device company, a link to forming a relationship is more easily established.
2. Study and Understand Cultural Issues and Trends in Asia
Western medical device executives looking to build a long term relationship with their Asian counterparts must also be sensitive to the cultural differences and distinct business practices in each Asian country. The history of each Asian country and the diversity of ethnicities and religions should be studied in advance. How many Western device executives know that Malaysia consists of three main ethnicities, including local Malay (50 percent), Chinese (24%), and Indian (7 percent)? Or that Indonesia consists of 40 percent Javanese while the remaining 60 percent is composed of over 300 ethnic groups? Or that 43 percent of Singaporeans are Buddhist and 15 percent are Muslim? In Vietnam, 81 percent of the population are atheist, 10 percent are Buddhist, and 7 percent are Catholic.
These are just a few examples of the wide range of ethnic groups and religions that can be found in Asia. Besides cultural issues, Western medical device executives need to make an effort to negate Asian stereotypes. For example, it is widely believed that Asians are highly deferential to tradition and authority. While deference is certainly a large part of Asian doctrine due to the pervasiveness of Confucianism, the younger generation of Asians are less inclined to be deferential compared to their elders. Some do not hesitate to assert themselves or question tradition and authority.
Another stereotype is that Asian women are subservient. However, nowadays, many Asian women are increasingly making their presence felt in the government and civil service, not to mention management boardrooms. The participation of Asian women in the workforce has reached over 50 percent in some of the Asian countries. Legislation that aims to remove discrimination against women has been progressively introduced in many Asian societies, and this has instilled a lot more confidence in women as equal business partners.
Nowadays, the emerging Asian cultural trends lean toward greater emphasis on individual rights, stronger focus on quality of life, and greater willingness for the Asian people to speak their minds. It is important for a Western device executive to be knowledgeable about the diversity and cultural trends in Asia, and not let common cultural stereotypes negatively impact their relationships with potential Asian business partners.
3. Be Sensitive to Appropriate Ways of Speech and Behavior in Each Asian Country
Asians have common perceptions about Americans as well. In general, they may have many positive views about Americans, such as their impressions that Americans as open-minded, generous, confident, and energetic. On the other hand, they also tend to think of Americans as demanding, arrogant, and culturally ignorant. It is crucial for American medical device executives to overcome these negative perceptions when interacting with Asian executives. Don’t be an ugly American!
Western executives often need to change their speaking behavior in Asia. One way to do this is to avoid certain American negotiating tactics. For example, in Japan, it is not a good idea to use the “hard sell” method to negotiate with Japanese medical device executives. Instead, be low-key and let the facts speak for themselves. Rather than saying “We have the top product on the market,” it is better to say something such as, “Our product is the only one on the market with features A, B, and C.”
Another negotiating tactic that will not be as effective in Japan is reminding your Japanese partner of their competition. Do not suggest that there are plenty of other companies if your negotiating fails. Instead, emphasize the benefits of establishing a long-term relationship and the need to start out on a mutually acceptable basis.
It is also a good idea to avoid resorting to direct accusation in Japan. Instead of saying, “We expect better from you,” it would be better to say something such as, “We have accommodated your requests on previous issues (A, B, C) and now expect some flexibility on your part as well.”
A good understanding of and appreciation for Asian cultural traits is essential to building strong relationships with Asian executives. If a Western medical device executive is able to overcome these challenges, your business in Asia will be more likely to thrive.