Distribution channels in the United States versus Japan: low and high context cultures

¶ … International Distribution

There are significant differences between creating a distribution structure in the United States vs. Japan, with many of these differences attributable to significant differences between low and high context cultures. For purposes of this discussion, the creating of a distribution channel in the United States relative to Japan is profiled. The U.S. market is by definition a low context culture that requires a high level of granularity and performance measurement (Columbus, 2003). This concentration on quantifying the performance of channel partners and measuring the relative performance of transactions also is evident in how customized products are sold through U.S.-based vs. Japanese channels. In the former, there is a concentrated effort to measure financial performance and efficiency very closely specifically in quote-to-order processes (Columbus, 2003a). These measures of performance are attributable to the low context cultures of U.S.-based channels that concentrate on high attention to detail and directness and efficiency of communication.

These attributes are antithetical to the high culture environment of Japan, where distribution channel strategies are based more on trust and longer-standing relationships over purely a reliance on measures of performance (Rawwas, Konishi, Kamise, Al-Khatib, 2008). Further, high context distribution channels concentrate more on the credibility and accountability of many trading partners keeping their word to each other vs. highly legal enforcement through written contracts and covenants.