Hirado represented the East India Company's attempt to muscle in to the Japanese market. Portugal and Holland had already had representation and influence for many years before the arrival of the East India Company in 1613. The Japanese Shogunate was extremely suspicious of the Europeans and were conscious of the power of their weapons in particular. They therefore wanted access to the Europeans to be maintained but only as a government monopoly. They did not want potential rivals to get hold of gunpowder and muskets if at all possible. They were also wary of the power of religion - particularly after the Portugese had proselytised with some effect. The result was the curious institution of trading posts. Europeans were confined to these tiny enclaves and had to negotiate with official representatives only. The Portugese would eventually be banished from Japan for their meddling in internal politics. The Japanese hoped that the Protestant nations of Holland and England would represent less of a threat. This was partly thanks to the English adviser William Adams (who would be made famous to the West by the book and film Shogun) and it should be noted a Protestant himself. William Adams negotiated for the trading post to be set up (although he had wanted it closer to Edo). In 1613, the English Captain John Saris arrived at Hirado in the ship Clove.
William Adams became a paid employee of the English East India Company - although he was never in charge of the factory there - this was left to Richard Cocks.
There was a real culture shock from the very outset. The English were grasping around trying to figure out what could make them a profit in these islands so far from home and which could't be supplied by the Portugese or the Dutch. Only four ships ever arrived directly from England and they carried goods which were of poor quality and limited value to the Japanese (broadcloth, knives, glasses, Indian cotton, etc.) Attempts to build up sub offices throughout the Japanese archipelego seemed to offer more opportunities as did links with Siam and Indo-China. William Adams frequently used his knowledge of local customs and influence to keep the factory afloat and going for as long as it did. However, his influence waned when the Shogun Ieyasu died and was replaced by his son Hidetada. Hidetada was even more suspicious of Christianity than his father had been and asked the company to limit its commercial activities to the island of Hirado and therefore closing down all the sub-offices.
Another reason for the abandonment of the post was actually due to events in the Spice Islands. The Dutch and English had gotten on reasonably well as fellow Protestants for many years. However the Dutch East India Company ratcheted up the commercial pressure in the Pacific and tried to close down the smaller English East India Company stations. The disputes started in the Spice Islands but soon spilled over to Japan - what with it being at the end of a very long trading system. Indeed the Dutch and English were neighbouring factories in Hirado. They had gotten along well for most of the time, but commercial and military realities caused a crisis for the English in Hirado as Dutch ships ambushed English ships in the Pacific and brought them as prizes to the island. Things came to a head when a small Dutch fleet came ashore and laid siege to the English factory. It was only saved by the intervention of the local Japanese lord despatching troops to sort out the rival feuding Europeans. The authorities were not impressed.
The loss making Hirado factory was recalled when it was clear that it could not be defended and that it was not making the hoped for profits. In a strange way the English East India Company would ultimately benefit from their enforced retrenchment. They let the Dutch keep their dominance in the Spice Islands and Japan. However the spices grown in the Spice Islands could be grown elsewhere and the Japanese were overly controlling over the flow of goods into and out of their country to make any serious profit - indeed the Dutch themselves would be forced to cut back their factory to a small one in Nagasaki. The English, on the other hand, would turn their attention to India which would ultimately be far more profitable for the company. Within a century the English company would dwarf the power and profitability of the Dutch company.