Case Studies

 
                     Product from domestic deal with Japanese Sumo
                     Association resulting from opening Japan office
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Opportunities in Japan
CMI saw strong potential in Japan’s entertainment market, the second largest in the world after that of the United States.  Furthermore, the interest for U.S. and European entertainment in Japan and for Japanese entertainment in the United States creates a significant area of opportunity for their services.

CMI had long considered business in Japan as a necessity to the company’s global strategy.  “Without the Japanese office,” says Christopher Frey, a managing partner at CMI,   “we really wouldn’t have a full, complete company. It’s also potentially a gateway for expanding our business into other parts of Asia—China and Korea, most notably.”

Market Entry
Before forming their Japanese subsidiary CMI worked through a number of guarantors who assured CMI’s legitimacy to Japanese companies.  But as the company’s business grew, they were finding more and more Japanese companies who would only conduct business with companies who had a presence in Japan.  “It was pretty clear that we needed to set up a Japanese entity if we wanted to be expanding our business,” said Frey, “and that’s why we were attracted to JETRO to help us do that.”

Although CMI had previous experience going into Japan with another venture, Frey said, “We didn’t have support from someone like JETRO, and it was not nearly as good or successful.”  CMI worked with JETRO advisors to determine that the Kabushiki Kaisha (KK) was the best type of subsidiary for them.  CMI then used the no-cost temporary office space at the IBSC to register their company and consult with tax attorneys. 

Working with JETRO also helped CMI recruit a third managing partner, Masaaki Saito, from a major Japanese company.  “That was probably the biggest challenge,” said Brad Gordon, a managing partner of CMI.  “In order to establish a solid foundation for the company, we knew it was essential to recruit an accomplished Japanese native to act as a third partner in the company and lead our efforts in Japan.”  Gordon added, “Certainly, having the support from JETRO made it easier for us to get the right person to join the company.”

CMI felt they gained even more than help through services from working with JETRO.  “Actually, one of the other key benefits that we saw in getting help from JETRO was that it gave us a stamp of legitimacy,” said Frey.  “It helped us when dealing with other companies and even when we were looking to recruit people that we had backing and support from JETRO.”

Results and Outlook
Since opening their Japan office in March 2004, CMI’s annual revenues have increased by over 300 percent.  The company has made some purely domestic deals they felt would not have been possible to do without a Japan office, such as obtaining the brand rights from the Japanese Sumo Association in a licensing deal to produce picture stamps for the Japanese market. 

Not only is having a Japan office adding legitimacy to CMI’s Japan operations, but it is also helping their business in the United States.  “When we’re meeting with the studios in Hollywood, for example, and we tell them that we actually have a Japanese corporate entity that’s been established for a couple of years, it shows that we are truly dedicated to the market,” said Frey.  “They know we’re on the ground in Japan and that we’re really embedded in what’s happening over there.”

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