What are the secrets of success of

Japanese multinationals?
About Japan
Japan is an island nation in East Asia. Located in the
Pacific Ocean, it lies to the east of the Sea of Japan,
China, North Korea, South Korea and Russia,
stretching from the Sea of Okhotsk in the north to the
East China Sea and Taiwan in the south.
The characters that make up Japan's name mean "sun-
origin", which is why Japan is sometimes referred to as
the "Land of the Rising Sun".
Japan has 6852 islands.
It has 10th largest population in the world.
It is the world's fourth largest exporter and fourth
largest importer.
GDP (2010 estimate)  -  Total $4.308 trillion which is
10th in the world.
Per capita - $33,828 which is 24th in the world.
Japan's public debt was more than 200 percent of its
annual GDP (1st in the world).
Japan ranks 12th of 178 countries in the 2008 Ease of
Doing Business Index and has one of the smallest tax
revenues of the developed world.
Japan has a large industrial capacity, and is home to
some of the largest and most technologically advanced
producers of:-
 motor vehicles
electronics
machine tools
steel and nonferrous metals
 ships
chemical substances
Textiles
processed foods
Exports of Japan
Japan's exports amounted to US$4,210 per capita in
2005.
Japan's main export markets are China (18.88 percent),
the United States (16.42 percent), South Korea (8.13
percent), Taiwan (6.27 percent) and Hong Kong (5.49
percent) as of 2009.
Its main exports are transportation equipment, motor
vehicles, electronics, electrical machinery and
chemicals.
Imports of Japan
Japan's main import markets as of 2009 are China
(22.2 percent), the US (10.96 percent), Australia (6.29
percent), Saudi Arabia (5.29 percent), United Arab
Emirates (4.12 percent), South Korea (3.98 percent)
and Indonesia (3.95 percent).
Its main imports are machinery and equipment, fossil
fuels, foodstuffs (in particular beef), chemicals, textiles
and raw materials for its industries.
Japan is a member of the G8, APEC, and "ASEAN
Plus Three", and is a participant in the East Asia
Summit.
 Japan signed a security pact with Australia in March
2007and with India in October 2008. It is the world's
third largest donor of official development assistance
after the United States and France, donating US$9.48
billion in 2009.
- Japanese firms are organized in Keiretsus (conglomerate of
companies that are financially linked to the same bank) .
It enables the different company to have more negotiating power
and to fund their credits on a short-term basis.
This big entities use Sogo shoshas that prospect the foreign
markets.
-the companies usually have many branches
-strong hierarchy, all the positions are doubled by assistants.
-Sales distribution network horizontally integrated by expatriates
-dedicated workforce
Cultural factors
Japanese employees are focused, hard working and
dedicated, because they frequently have a strong sense of
loyalty to their company
Because of the importance of honor in the Japanese culture,
Japanese teams tend to develop an acute sense of
responsibility and commitment in their missions.
Moreover, the willingness to improve the working and
management methods is deeply rooted in the Japanese work
culture, inherited from the Confucianism (concept of
Kaizen).
Economic factors
Just after the WWII, American capitals were injected in the Japanese
economy to keep it from stalling, and support its development and
modernization
It also had a politic and geostrategic purpose, which was to prevent the Japan
to fall into a communist system and ensure good relations with USA). These
foreign investments helped the Japanese economy to rebuild itself and
become very effective (with the rapid emergence of Zaibatsus, which are
highly powerful and integrated companies, both vertically and horizontally).
 Japanese companies have progressively developed a strong culture of
innovation, investing a lot into R&D and into improving their production
plants. This led to the mastery of a very precise manufacturing of high quality
products, which proved to be very profitable. A typical example being the
ability to lead the electronic sector at the time it was booming all over the
world.
Apart from that, low exchanges rates set up by the
Japanese government helped to promote exports, and
fiscal advantages helped entrepreneurship initiatives
and helped companies to invest and grow further and
further.
Japanese companies are focused on improvement and
optimization, which led to management innovations
such as lean management (initiated by Toyota
Production System with Just in Time, and jidoka /
poka-yoke concepts).
The environment
Strategic geographical environment: in between the USA and the
emerging countries such as China, South Korea, Taiwan,

Cheap credit and low taxes for Japanese companies

 The structure of the economy with really strong companies such as

Zaibatsu (Toyota, Mitsubishi, Honda,…) which have strong internal
links which allow them to avoid takeover bid (The majority of the
capital belongs to Japanese shareholders and financial independency
thanks to their own internal bank and the cash they are generating.
The culture
Japanese workforce is well educated, hard-working,
collective and loyal.
The Japanese dedicate “their life” to their job. Thus, it
is a consensual society and as a consequent few strikes
occur
Within the companies everything is done to ease the
well being of the workers (relaxation center, facilities
for babies and children, social activities,…).
Business Model
Toyotism and the five zero model enabled Japanese firm to
compete with EU and US firms.
The five “0”: no inventory, no manufacturing fault, no
delay, no paper, and no breakdown. Thus, it is a just in
time system which allows more flexibility and a better
adaptation to the demand.
 There is a culture of innovation. Indeed, some of the best
ranked companies in the world in the sector of new
technologies are Japanese. There is an integration of
automated machines, robots, computers and interactive
software into manufacturing that allows high quality and
high performances.
Advantage due to keiretsu
keiretsu is a set of companies with interlocking
business relationships and shareholdings, it could
called also as business group. The major keiretsu were
each centered around one bank, which lent money to
the keiretsu's member companies and held equity
positions in the companies. Each bank had control on
each company. The main effect of this structure was to
minimize the presence of hostile takeovers in Japan,
because no entities could challenge the power of the
banks.
Other factors
Workers work in one company for their whole life, so
a lot of money is put into their training and they
become very competent and competitive.
They are highly motivated because of team spirit and
togetherness.
 Companies are regarded as social organizations, not
just a collection of financial and physical assets, as
something that belongs to the employees, not the
shareholders.
Cont….
They have long focused on specific niches, improved
the speed of their business undertaking, and effectively
used information technology.
Japanese companies have traditionally given out very
small dividends and instead kept the bulk of their
profits as reserves and so, could invest a lot in R&D.