Harvard Business Review Reflection
Introduction to International Business
Dr. M.M. Wilhelm
Date of submission:
14th of November 2012
How to win in emerging markets: Lessons from Japan written by Shigeki Ichii, Susumu Hattori and David Michael was published in the Harvard Business Review of May 2012. The article is about the fact that big firms like Sony, Toyota and Honda were big exporters to developed countries the last decades. But growth in the developed markets has slowed down in the 21st century. The growth at an average annual year rate is much higher in developing countries like Brazil and India than in developed countries. To prosper now, Japanese companies like Sony and Toyota must win in developing countries, something they’re now failing to do.
Most of the Japanese companies moved up from the bottom in the developed countries in contrast to the developing countries where they entered at the top of the consumer pyramid. When they where settled they moved into the middle and low-end segments. In these segments low prices and economies of scale are specific characteristics. The result can be that these Japanese companies fail in the emerging markets of these days. So the Japanese companies have to rethink their strategies and overcome four structural challenges. There are four structural challenges to get a better place in the emerging markets. The first one is distaste for the middle and low-end segments. Most of the companies that are entering emerging markets are also find their spots in these segments of the market. However, the last years Japanese companies are focusing on the high-end. This strategy brings those companies successes in only the established markets. The second challenge of the four challenges consists the aversion to M&A. The aversion to M&A tells us that Japanese companies are very slow to undertake expansion by different ways than the standard ways...
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