Choose and Focus: Japanese Business Strategies for the 21st Century (review)

[ 168 ] asia policy Choose and Focus: Japanese Business Strategies for the 21st Century Ulrike Schaede Ithaca: Cornell University Press, 2008 • 304 pp. The book explains how 1998–2006 marked a strategic inflection point during which the old ways of Japanese business were undermined, leading to the emergence of new, focused, and lean competitors in Japan. main argument Political change and legal reform, combined with crisis and the arrival of global competition in Japan, have caused Japanese businesses to realize that their old competitive advantages from quality mass-production no longer guarantee success. Japan’s largest firms have refocused by shedding non‑core businesses and by repositioning for leadership in targeted technologies. This development is spearheaded in high-margin upstream and midstream components and materials. policy implications These changes have undermined what we knew about Japan from the 1980s, regarding banks, business groups, employment, and subcontracting: • Japanese companies will be able to recover more quickly from the current global economic shock because Japan’s new economy features M&As, hostile takeovers, ownership by institutional investors and foreigners, and global parts sourcing, and is driven toward innovation, price competition, and efficiency. The buyout of Lehman Brothers and Morgan Stanley by Japanese banks is a visible sign of an otherwise less obvious reversal. • U.S. firms now have much greater access to Japanese markets because Japan’s new, nimble firms rely more heavily on the outsourcing of products and services. • New leadership in materials and components has made Japanese inputs criticalforU.S.firms.Manyofthesuppliersoftheseinputsarenothousehold names. • To understand the new competitive threat to U.S. firms from Japan, one must look beyond end products and reorient one’s thinking regarding global competition toward new industries. For example, Japan’s new leadership in materials extends to green technologies, ranging from efficient power generation to recycling filter membranes and chemicals. U.S. firms in these industries are facing new competition. ...