Lessons from Japanese Firms’ Strategies in Asia

Vinod K. Aggarwal

Winning in Asia, Japanese Style: Market and Nonmarket Strategies for Success, 2002

The regional Asian currency crises of 1997-1998 complicated but failed to diminish foreign firms’ ardor for the region. Asia includes many of the world’s fastest growing markets, and promises to be a dynamic and fiercely competitive arena for decades to come. Both before and after the crises, firms have attempted to devise trade and investment strategies that would give them a competitive advantage over their rivals.

The purpose of this volume and its two companion volumes has been to present a novel framework to understand the market, nonmarket, and organizational strategies that have enabled many Japanese firms to win in Asia. An economic overview of the performance of Japanese firms, both with respect to trade and investment, sets the stage for specific sector analyses. The case studies in this book—including the banking, auto, telecommunication, chemical, software, and electronics industries—allow us to compare and contrast how firms in these sectors have
attempted to enhance their competitive positions. In many cases, the authors have provided valuable comparisons of Japanese firm strategies with American or European firms, thus providing insight into the impact of national origin on competitive performance. These sectoral analyses also show how firms have attempted to build effective relations with governments in the region, in Japan, and with regional institutions. In doing so, our objective has been to identify the most successful strategies for meeting the unique challenges of Asian markets.

This chapter is organized as follows. Section II begins with a focus on the context within which Japanese firms have operated, concentrating on the economic characteristics of the Asian market and the relative performance of Japanese firms. Section III provides a positional analysis for the six industrial sectors covered in this volume. Section IV reviews the theoretical and empirical aspects of the strategies and tactics pursued by Japanese firms in Asia. The fifth section concludes with a discussion of lessons that emerge from the book’s analysis and offers directions for future research.

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