Japanese manufacturing
Once global leaders, Japanese electronics firms are tumbling
Why I picked up the article
Do you agree with the article?
Certainly, Japanese electronics companies don’t seem so lively today but we
have experienced their attractive products for decades since we were born. I think
it is temporary and they can reach the summit again if they can change.
Discussion topics
(1) Japanese electronics industry
A former executive at a electronics firm said in the article“Everyone knows we need to change, and no one
can make the changes”. Who do you think can change and how?
(2) Competition and monopoly in the market
Should the government facilitate M&A that sometimes cause a
monopoly of the market? Or should it encourage players to compete with each
other making fairness of the market?
Summary
Japanese electronics firms
are loosing their revenues and shares. Meanwhile America’s Apple and South
Korea’s Samsung enjoys their prosperity. Since 2000, the big five Japanese
electronics firms have lost two-third of their values. Not because of high
costs, strong yen nor tax changes but the sickness runs deeper. Too many
Japanese firms make similar things that cause inefficiency of the market and
waste huge amount of capital.
※The story of NEC
NEC was the world biggest IT
company but it failed to adapt changing world. Its shares have fallen by 90%
and they forecast a \100 billion loss and would have to cut 9% of their
workforce.
(1) Since foundation in
1899, its main customer was the state so NEC’s own culture has long been
bureaucratic. (2) A business for NTT was a cosy arrangement for NEC but it was
difficult to modify the specific technology for other client and it did not decide
drastic reforms. (3) It also had little experience to make any business outside
Japan. (4) Its brilliant technology was used to build the world fastest
supercomputer and satellite network but these market were too small to make
certain profit.
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