Are rebounding U.S. corporate profits causing managers to be complacent about the Japanese competitive challenge? Is the world market share of Japanese industry really shrinking? According to this author, it’s too soon to count the Japanese out. Using company data, he has tracked changes in world market shares in various industries since the 1960s. The results of his survey suggest that the current U.S. response to the Japanese global challenge is inappropriate and that managers should reexamine their efforts to position their companies in world markets.
1. R.T. King and S.K. Yoder, “America Ascendant: U.S. Companies’ New Competitiveness,” Wall Street Journal, 8 September 1994, p. A1, and 9 September 1994, p. A1;
“America on Top,” The Economist, 10 September 1994, p. 81;
E. Faltermayer, “Competitiveness: How U.S. Companies Stack up Now,” Fortune, 18 April 1994, pp. 52–64; and
“The Fading of Japanophobia,” The Economist, 6 August 1994, pp. 21–22.
2. L.G. Franko, “Multinationals: The End of U.S. Dominance,” Harvard Business Review, November–December 1978, pp. 93–101;
L.G. Franko, “Global Corporate Competition: Who’s Winning, Who’s Losing, and the R&D Factor as One Reason Why,” Strategic Management Journal 10 (1989a): 449–474;
L.G. Franko, “Unrelated Diversification and Global Corporate Performance,” in A.R. Negandhi and A. Savara, eds., International Strategic Management (Lexington, Massachusetts: Lexington Books, 1989b);
L.G. Franko, “Global Corporate Competition II: Is the Large American Firm an Endangered Species?” Business Horizons, November–December 1991, pp. 14–22.
3. Using 1973 as a base year, Goldman estimated a January–March 1994 PPP yen/dollar rate at ¥216/$ using consumer prices; ¥158/$ using producer prices; and ¥92.4 using Japanese export prices versus U.S. producer prices. See:
Goldman Sachs, “Japan Research: Research Review,” 18 July 1994, p. 4.
4. W. Dawkins, “When Neighbours Make Good Returns: The Yen’s Rise Is Encouraging a Strategic Shift by Japanese Industry into Other Asian Markets,” Financial Times, 15 July 1994, p. 13.
5. See “Cash Is King for Corporate Japan,” Business Week, May 1, 1995, p. 37; and Value Line, various issues.
6. For historical capital expenditure and cash flow patterns of the companies mentioned, see Value Line, various issues.
7. On the importance of R&D as a “driver” of long-term world market share, see: Franko (1989a).
8. “The Global Patent Race Picks Up Speed,” Business Week, 9 August 1993, p. 57.