Where Agencies Fear to Tread

TOKYO Japan may be the most difficult, complicated operating environment in the world for an international agency. There is the obvious disadvantage: The three largest domestic shops—Dentsu, Hakuhodo and Asatsu-DK—control 65 percent of media billings. But there are other unique challenges. The business culture in Japan still largely adheres to lifetime-employment practices; the difficulty of firing staff or making layoffs, coupled with the price of real estate, makes for higher costs of doing business. Also, there are so many strong local brands in Japan, foreign rivals must battle harder for share.