Articles/Columns
New Global Partnerships Support Japanese Firms
A few days ago, the Wall Street Journal reported that Chinese companies have been recently investing into Japanese firms. These investments come at a time when Japanese firms have been struggling with a strong Yen and disruptions in the supply chain from natural disasters; among other macroeconomic factors. Many Japanese firms have been bleeding capital from unproductive business units for some years now, so receiving a fresh injection of capital is needed to stay afloat for many of these firms. In addition, many large Japanese firms are struggling to transform their organizations to better compete in a much more globalized world. Many of these firms have cannibalized their balance sheets by becoming over-dependent on the domestic market; thus competing against each other in a shrinking market rather than transforming to become global leaders. Some Japanese firms are global leaders, such as Toyota and Nintendo. However, the global landscape is changing more rapidly with new innovations and also new competitors arising from developing markets, so leading firms will have to stay dynamic and inventive to remain globally competitive. With so much experience trying to win the Japanese consumers, Japanese firms should be able to shift their strategic focus and market orientation to win the global consumers. Japan was the first Asian nation to become a so-called "developed" country by rapidly ascending the industrial world with their innovation and expertise. Their leadership is the reason many Japanese brands are global brands today. In addition to brand power, Japanese firms have also maintained an edge in R&D. This "soft power" is why Japan's neighbors, who have become the new manufacturing powers, are interested to create strategic alliances with Japanese firms. The new global model could consist of a Japanese firm, such as Sharp, to manage the administrative and marketing operations in Japan, as well as retaining some crucial R&D activities. The operation management, process design, and new product development could be set up in Taiwan in partnership with a U.S. design firm and also a local manufacturing powerhouse such as Foxconn. Finally, the production base and distribution of the finished product could take place in China via Foxconn manufacturing facilities. This new global model is becoming a reality – just last month, Foxconn (Hon Hai Precision Industry Co.) invested more than 800 million USD into Sharp Corporation (about 10% of the company) and became Sharp's biggest shareholder. New global partnerships will become the new norm for many Japanese companies to stay relevant in the 21st Century.
Direct Investment into Japan from China
Source: Wall Street Journal
（2012/4/18 掲載）