Explanation of Japanese Electronic MNE's Global Expansion Pa
Explanation of Japanese Electronic MNE's Global Expansion PatternDuring the late 1970's leading up to the 80's and early 90's, Japanese electronic firms expanded their organisation vigorously. As well as domestic expansion, the firms also spread globally in all regions. However, a discernable pattern can be found among the relationship between the nature of the activities and the target countries. In this essay, I will first assess the possible expansion strategies that were possible to the Japanese multinational enterprises (MNE's) and suggest my personal recommendation. This will be done through the use of several frameworks, most notably the OLI (ownership, location, and internalisation) model to describe the firm's motives for expansion, and Porter's Diamond of National Advantage and the PEST framework to explain the benefits of different regions. Then I will draw from the article "Global Location Behaviour and Organizational Dynamics of Japanese Electronics Firms and Their Impact on Regional Economies" by Masahisa & Ryoichi for supporting empirical evidence.The firms in question are nine Japanese electronic companies; Hitachi, Matsushita Electric, Toshiba, NEC, Mitsubishi Electric, Fujitsu, Sony, Sanyo Electric,
Thus, irrespective of where the MNE might decide to operate, the ownership benefit of its strong knowledge-based asset will make it competitive against local rivals who cannot match the MNE's knowledge based superiority. When applying the Diamond model, one can see that the regional competitive advantage (or lack of competitive advantage thereof) was that the local competition in the electronics sector was low in the EU despite having strong demand conditions from high standard of living. Similarly, the same analysis can be extended to fit the PEST model. The national competitive advantage for the SEA countries is the availability of resources - yet in this case the resources serve labour-intensive activities rather than knowledge-based activities that can be found in Japan's case. In the EU, the advantage was to capture the market in the region. from transportation and costs from trade protectionism, etc. However, another advantage of the US and the EU is its human capital, and hence, we can expect that the nature of the activities in the regions will be knowledge-based activities as well as labour intensive activities. one plant building two products can share the same R&D costs resulting in lower average cost compared to when the plants are separate entities. The pattern that we observe is that most of the R&D remained in Japan, and more importantly, within the Tokyo and Osaka MA's. This is crucial since the knowledge-based activities greatly benefit from agglomeration economies. By looking at the MNE's ownership characteristics, first I would like to separate the activities of the firms into two core activities: the knowledge-based activities and the labour-intensive activities. However - here we revert to the omission earlier - there existed very strong political barriers in the form of trade restrictions to Japanese exports. This is supplemented by the availability of high calibre human capital in Japan.
Common topics in this essay:
Electric Sharp,
South America,
Osaka MA's,
Yen SEA,
Porter's Diamond,
Expansion Pattern,
Japanese MNE's,
Japan MNE's,
Japan Similarly,
Tokyo MA,
competitive advantage,
knowledge-based activities,
knowledge-based assets,
human capital,
sea countries,
knowledge based,
porter's diamond,
agglomeration economies,
labour-intensive activities,
diamond model,
quality human capital,
benefit agglomeration economies,
organizational dynamics japanese,
dynamics japanese electronics,
behaviour organizational dynamics,
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Acceptance Essays
