Product Description

Japan has been in an economic slump for more than half a decade. Why did this once-strong economy topple? What do its troubles tell us about competing in the new global marketplace? In Can Japan Compete?, world-renowned competition strategist Michael Porter and his colleagues explain why American assumptions about Japan have proved so inaccurate, what Japan must do to regain its strength, and what its journey can tell us about how to succeed in the new global economy. The research behind this book began in the early 1990s, at a time when Japan's economic success was overwhelmingly credited to the Japanese government and its unique management policies. Porter and his colleagues started by asking a crucial but previously overlooked question: If Japanese government policies and practices accounted for the nation's extraordinary competitiveness, then why wasn't Japan competitive in many of the industries where those policies had been prominently implemented? The authors and a team of colleagues surveyed a vast array of Japanese industries. This surprising book is the result of their work. The continuing influence of Japanese government and management strategies worldwide makes Can Japan Compete? a must read for anyone competing in the global economy.

On The Competitive Advantage of Nations:

Product Details

• Amazon Sales Rank: #627557 in Books
• Published on: 2000-09
• Original language: English
• Number of items: 1
• Binding: Hardcover
• 208 pages

Review
" Porter has done for international capitalism what Marx did for the class struggle....a real achievement." -- The Economist

"American executives are grasping for a logic to global competition... Mr. Porter has given them one." -- New York Times

"Porter's books on competitive strategy are the seminal works in the field." -- Philip Kotler, Kellogg Graduate School of Management, Northwestern University

"Rich in lessons about why and how industries, regions, and nations succeed or fail." -- Business Week

"Three overarching game plans that work... explain how thousands of real-world competitors come out on top." -- Fortune

About the Author
Michael E. Porter is the C. Roland Christensen Professor of Business Administration at the Harvard Business School. He is the author of a number of books on competitive strategy and international competitiveness, including the Competitive Strategy: Techniques for Analyzing Industries and Competitors, now nearing its sixtieth printing. Hirotaka Takeuchi has taught Competition and Strategy at Harvard Business School. He is co-author of The Knowledge-Creating Company. Mariko Sakakibara is an Assistant Professor of Strategy and Organization at UCLA, and former deputy director of Japan's Ministry of International Trade and Industry.

Customer Reviews

Dead On
I work for a Japanese company that is mentioned in this book and the book is a dead on diagnosis of how Japanese companies are managed. For anyone familiar with the current Japanese economy (which is in a huge depression) there are some major problems with how the Japanese economy operates. There is nothing inherently genius about the solution that Porter offers, which is simply a call for a true free market system in Japan; free of tariffs, trade barriers, cartels, and collusion. However, if you work for a Japanese company I strongly suggest buying this book to understand why your company is managed the way it is.

Japan¡¯s success and failure in light of business strategy
...

Michael Porter become the celebrity in the field of business strategy with his two books, ¡®Competitive Advantage¡¯, ¡®Competitive Strategy¡¯. Takeuchi and Sakakibara secured their name in organizational learning school with their book, ¡®The Knowledge-Creating Company.¡¯ With this book, ¡®the word, ¡®knowledge creation¡¯ has been widely circulated within business schools.
This book poses the question, ¡®Why does Japan stumble?¡¯ it¡¯s the single most popular subject in Japanese studies. Numerous books come to mind on that issue. The approach this book takes is, nonetheless, unique. While others have tackled it in the view of macroeconomics or political economy, authors of this book take the view of microeconomics, or more precisely business strategy. They argue that more-than-decade-long deflation and liquidity trap are not the fundamental problem, but just symptoms. The underlying problem must be hunted for elsewhere: the eroded competitive advantage of Japanese companies. There has been warning signs since 1980s well before bubble bursting:
1. Since 1980s, no new internationally competitive industry has emerged.
2. The profitability, or capital productivity has long been low. Export share has been achieved and maintained partly by sacrificing returns to capital.
3. Japan¡¯s share of world exports peaked in 1986 (10%). But it has fallen since then to below 8%.
Bubble and subsequent financial meltdown certainly is serious trouble. But above reveals much deeper crisis: the loss of competitiveness.
Michael Porter maintains that firms initially gain competitive advantage by altering the basis of competition. They won not just by recognizing new market, or technologies but by moving aggressively to exploit the,. A firm¡¯s local rivalry in home nation plays a critical role in shaping manager¡¯s perceptions about the opportunities that can be exploited. Firms that survive vigorous local competition are often more efficient and innovative. In the 1970s and 80s, Japan set the world standard for operational effectiveness, that is, for improving quality and lowering cost: TQM, JIT system, lean production, cycle time reduction. Japanese companies pushed the productivity frontier well beyond the capabilities of many Western companies. Japanese companies¡¯ competitive advantage was obtained through cut-throat local competition. But starting in the mid- and late 1980s, the gap between Japanese and Western companies began to narrow through so-called restructuring or reengineering. Now Japan¡¯s source of competitiveness has been eroded away. As a result, international competition has ever more vigorously intensified not in the behalf of Japan. Worse, what drove Japan to be competitive now serve as drag on it. Fierce local rivalry degrade into competitive convergence. It means that all the competitors in an industry compete on the same dimension. As rivals imitate one another¡¯s improvements in quality, cycle time, or supplier partnerships, competition becomes a series of unwinnable races down identical paths. This occurs because Japanese firms believe that by mimicking competitors¡¯ technologies and products, they can avoid being in a weak positioning in the market. Because, as a result of mutual benchmarking, Japanese companies cannot but think of competition only in terms of operational effectiveness for their product lineup converges, the have made it almost impossible to be enduringly successful. The more benchmarking, the more they look alike. To avoid such a stalemate, they try to diversify product lineup. But it inflames only to another round of convergence. This kind of local rivalry has finally led to excess costs to over-differentiation for products as well as their components. Such costs have become too high, thus leading to a considerable waste of resources. When they set the best practices, such a cost could be dissipated at the expense of Western competitor¡¯s market share. But now such an advantage rarely exists, if any. Competitive convergence leads to the lack of focus. The lack of focus results in no obvious competitive advantage for they are over-diversified. Authors recommend to compete on strategy: Operational effectiveness is just one of two ways a company pursues superior performance. The other is through strategy, or competing on the basis of a unique positioning involving a distinctive product of service offering. The essence of strategy is to perform differently from rivals. It¡¯s choosing not to do something. They succumb to the temptation to chase easy growth by adding popular features and taking on product lines or services that do not fit their strategy. Or they target new customers to whom the company offers noting unique. But attempting to compete in several ways at once creates confusion and undermines organizational motivation and focus. Profits fall, so more revenue is seen as the answer. In sum, authors argues that the problem of Japan is more in mind-set than in unchangeable circumstances in Japan.

Insightful but faddish after all
A decade seemingly is a long time. Porter, et al.'s conclusion is that Japan's industrial policy and industry regulations as well as Japanese corporate strategy by "imitation" (which I would rather call learning from others when needed) were all wrong after all. Thus, global admiration in the 1980s to global discounting of Japanese governement and business practices... How about the competitive weaknesses of U.S. companies in the 1980s to their glorious revival in the 1990s? Did anything fundamentally changed within U.S. companies in the way of strategies in the 1990s? How about the situation today? In my mind, much of corporate performance still depends heavily on the macroeconomic state of the domestic economy. While Porter, et al.'s book may be "fashionable", it fails to deliver the fundamental that appropriate strategy is dictated by the "climate of the time" and the situations companies are in.