Last Updated 28 Jul 2021

Harvard Business Review Reflection How

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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 falling 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. The aversion to M tells us that Japanese companies are very slow to undertake expansion by different ways than the standard ways such as mergers and partnerships in emerging markets. Japanese companies should undertake action because these mergers and partnerships are the fastest way to gain economies of scale, market share, distribution channels and capabilities. The article gives some examples about the amount of acquisitions 1 OFF 2010 Japanese companies announced Just 387 acquisitions in emerging markets.

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US impasses announced 2,349 acquisitions and 998 acquisitions were announced by the British. Here you can see the big difference between Japan and other countries and you can conclude that decision-making is a slow process in Japanese companies and therefore, in most of the cases, the attractive targets are already snatched up by other multinationals.


Developing countries are growing more rapidly the coming years, but does that stay for a long time and is that worth the investment or are Japanese companies already too late? Does this work for Japan only or also for companies from other countries?

Distance for the middle and low-end segments

Aversion to M Lack of commitment Lack of talent a. What you have learned from this article How important it is to engage in M and to be aware of the local preferences in order to acquire a company's full growth potential b. What managers could learn from the article.

The conclusion serves to restate in a nutshell what you have discussed before and states your final Judgment on the value of the article. In addition, list three questions on or on the basis of the content of the article that you would like to ask the author.

  1. Is the investment in developing countries for Japanese companies still worth it, or are they already too late to get good M&A?
  2. Is this mainly a problem for Japanese based companies or also for companies from other countries?
  3. Do you believe that it is realistic to believe that every Japanese company can focus on the low and middle-end segments?

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