Re: [PEN-L:2016] Japanese Business Practice

["Anthony D'Costa" <dcosta@xxxxxxxxxxxxxxxx>]

From:

Anthony P. D'Costa
Associate Professor
Comparative International Development
University of Washington
1900 Commerce Street
Tacoma, WA 98402, USA

Phone: (253) 692-4462
Fax :  (253) 692-5612

On Fri, 8 Jan 1999, Tom Lehman wrote:

> Dear Pen-L,
>
> Enquiring minds want to know how much inter-firm competition is there in
> the Japanese domestic market.  For example, product line competition
> between Japanese steel companies in their domestic market.  Does it
> exist and to what degree?

Inter-firm competition exists.  It is considerable because the Japanese
firms quickly imitate products and standards leading firms use.  But the
peculiarities of Japanese institutions circumscribe inter-firm competition
in some interesting ways.  In the steel industry, for example there is a
division between small, electric furnace based producers and the large
integrated producers, just as in the US.  But unlike in the US, big
integrated producers have "affiliated" firms in the electric arc furnace
segment.  Naturally the level of competition will be different.  In the
1970s, the small independent producers competed vigourously, almost in a
cut-throat manner.  This latter aspect is generally avoided in Japan
through various anti-recessionary cartels.  Lot of firms went bust.  They
have restructured.  But the big firms and their smaller affiliates don't
compete, obviously.  But they too had to restrcuture and continue to do so
in the 1980s and 1990s.  one independent firm (using electric furnace)
that has done extremely well and has even challenged the big firms is
Tokyo Steel.  So there are some markets, the long products markets in
which Tokyo Steel competes vigorously with the other--large firms and
their affiliates.


Is it as cut-throat as in the USA?  I am
> particularly interested in competition in the Japanese domestic steel
> bar and rod market; and any possible spillover into our domestic market.


There is certainly a spill-over, although I have not seen any recent
numbers, since the domestic economy is in a recession and so is the
East/SouthEast Asian region.  Korea is a competitor to Japan in the Asian
region.

>
> We understand that there is ancient bad blood between some Japanese
> firms.  Anyone familiar with these or is this global urban legend?
>
> A special note of thanks to Bill Rosenberg for the New Zealand report.
>
> Your email pal,
>
> Tom L.
>
>