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Michael E. Porter

Hirotaka Takeuchi

Can Japan Compete? Hardcover – October 1, 2000

by Michael E. Porter (Author), Hirotaka Takeuchi (Author), Mariko Sakakibara (Author)

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In Can Japan Compete?, world-renowned competition strategist Michael Porter and his colleagues explain why American assumptions about Japan have proved so inaccurate, what Japan must do to regain its strength, and what its journey can tell us about how to succeed in the new global economy. The research behind this book began in the early 1990s, at a time when Japan's economic success was overwhelmingly credited to the Japanese government and its unique management policies. Porter and his colleagues started by asking a crucial but previously overlooked question: If Japanese government policies and practices accounted for the nation's extraordinary competitiveness, then why wasn't Japan competitive in many of the industries where those policies had been prominently implemented? The authors and a team of colleagues surveyed a vast array of Japanese industries. This surprising book is the result of their work. The continuing influence of Japanese government and management strategies worldwide makes Can Japan Compete? a must read for anyone competing in the global economy.

Print length

224 pages
Language

English
Publisher

Basic Books
Publication date

October 1, 2000
Dimensions

6.14 x 0.56 x 9.21 inches
ISBN-10

0465059899
ISBN-13

978-0465059898
Lexile measure

1370L
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Editorial Reviews

Review

" Porter has done for international capitalism what Marx did for the class struggle....a real achievement." -- The Economist

"American executives are grasping for a logic to global competition... Mr. Porter has given them one." -- New York Times

"Porter's books on competitive strategy are the seminal works in the field." -- Philip Kotler, Kellogg Graduate School of Management, Northwestern University

"Rich in lessons about why and how industries, regions, and nations succeed or fail." -- Business Week

"Three overarching game plans that work... explain how thousands of real-world competitors come out on top." -- Fortune

About the Author

Michael E. Porter is the C. Roland Christensen Professor of Business Administration at the Harvard Business School. He is the author of a number of books on competitive strategy and international competitiveness, including The Competitive Strategy: Techniques for Analyzing Industries and Competitors, which has been printed more than fifty times.

Product details

Publisher : Basic Books; First Printing edition (October 1, 2000)
Language : English
Hardcover : 224 pages
ISBN-10 : 0465059899
ISBN-13 : 978-0465059898
Lexile measure : 1370L
Item Weight : 1 pounds
Dimensions : 6.14 x 0.56 x 9.21 inches

Best Sellers Rank: #2,194,425 in Books (See Top 100 in Books)
- #210 in Commercial Policy
- #452 in Exports & Imports Economics
- #3,174 in International Economics (Books)

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Vince Lowe

Japan competitiveness

Reviewed in the United States on January 2, 2012

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This is an interesting book, but it seems to really grasp one or two key elements of Japanese culture and then try to apply it to the rest of the foreseeable future. This book misses the fact that the Japanese people are some of the most hard working and resilient cultures in the world.

Helpful

Suckwoo Lee

Japan¡¯s success and failure in light of business strategy

Reviewed in the United States on August 16, 2002

...
Michael Porter become the celebrity in the field of business strategy with his two books, ¡®Competitive Advantage¡¯, ¡®Competitive Strategy¡¯. Takeuchi and Sakakibara secured their name in organizational learning school with their book, ¡®The Knowledge-Creating Company.¡¯ With this book, ¡®the word, ¡®knowledge creation¡¯ has been widely circulated within business schools.
This book poses the question, ¡®Why does Japan stumble?¡¯ it¡¯s the single most popular subject in Japanese studies. Numerous books come to mind on that issue. The approach this book takes is, nonetheless, unique. While others have tackled it in the view of macroeconomics or political economy, authors of this book take the view of microeconomics, or more precisely business strategy. They argue that more-than-decade-long deflation and liquidity trap are not the fundamental problem, but just symptoms. The underlying problem must be hunted for elsewhere: the eroded competitive advantage of Japanese companies. There has been warning signs since 1980s well before bubble bursting:
1. Since 1980s, no new internationally competitive industry has emerged.
2. The profitability, or capital productivity has long been low. Export share has been achieved and maintained partly by sacrificing returns to capital.
3. Japan¡¯s share of world exports peaked in 1986 (10%). But it has fallen since then to below 8%.
Bubble and subsequent financial meltdown certainly is serious trouble. But above reveals much deeper crisis: the loss of competitiveness.
Michael Porter maintains that firms initially gain competitive advantage by altering the basis of competition. They won not just by recognizing new market, or technologies but by moving aggressively to exploit the,. A firm¡¯s local rivalry in home nation plays a critical role in shaping manager¡¯s perceptions about the opportunities that can be exploited. Firms that survive vigorous local competition are often more efficient and innovative. In the 1970s and 80s, Japan set the world standard for operational effectiveness, that is, for improving quality and lowering cost: TQM, JIT system, lean production, cycle time reduction. Japanese companies pushed the productivity frontier well beyond the capabilities of many Western companies. Japanese companies¡¯ competitive advantage was obtained through cut-throat local competition. But starting in the mid- and late 1980s, the gap between Japanese and Western companies began to narrow through so-called restructuring or reengineering. Now Japan¡¯s source of competitiveness has been eroded away. As a result, international competition has ever more vigorously intensified not in the behalf of Japan. Worse, what drove Japan to be competitive now serve as drag on it. Fierce local rivalry degrade into competitive convergence. It means that all the competitors in an industry compete on the same dimension. As rivals imitate one another¡¯s improvements in quality, cycle time, or supplier partnerships, competition becomes a series of unwinnable races down identical paths. This occurs because Japanese firms believe that by mimicking competitors¡¯ technologies and products, they can avoid being in a weak positioning in the market. Because, as a result of mutual benchmarking, Japanese companies cannot but think of competition only in terms of operational effectiveness for their product lineup converges, the have made it almost impossible to be enduringly successful. The more benchmarking, the more they look alike. To avoid such a stalemate, they try to diversify product lineup. But it inflames only to another round of convergence. This kind of local rivalry has finally led to excess costs to over-differentiation for products as well as their components. Such costs have become too high, thus leading to a considerable waste of resources. When they set the best practices, such a cost could be dissipated at the expense of Western competitor¡¯s market share. But now such an advantage rarely exists, if any. Competitive convergence leads to the lack of focus. The lack of focus results in no obvious competitive advantage for they are over-diversified. Authors recommend to compete on strategy: Operational effectiveness is just one of two ways a company pursues superior performance. The other is through strategy, or competing on the basis of a unique positioning involving a distinctive product of service offering. The essence of strategy is to perform differently from rivals. It¡¯s choosing not to do something. They succumb to the temptation to chase easy growth by adding popular features and taking on product lines or services that do not fit their strategy. Or they target new customers to whom the company offers noting unique. But attempting to compete in several ways at once creates confusion and undermines organizational motivation and focus. Profits fall, so more revenue is seen as the answer. In sum, authors argues that the problem of Japan is more in mind-set than in unchangeable circumstances in Japan.

6 people found this helpful

Helpful

Gerard Kroese

Reviving the competitive advantage of Japan

Reviewed in the United States on December 11, 2001

Michael Porter is Professor of Business Administration at Harvard Business School and a leading authority on competition and strategic management; Hirotaka Takeuchi is Professor and Dean of the new Graduate School of International Corporate Strategy at Hitotsubashi University in Japan; and Mariko Sakakibara is Assistant Professor at the Graduate School of Management at the University of California, Los Angeles.
"This book aims first and foremost to offer a theory that can explain and interpret Japan's postware economic trajectory." This 'theory' follows a mostly academical and economical research method. In Chapter 1 the authors first discuss Japan's economical history, whereby the authors use extensive graphs, figures and tables to prove their point: "Japan's actual competitive performance, then, has been mixed for decades." Expanding on their discussion on the economical history, the authors challenge the Japanese government model. "At the core of the Japanese government model is a particular conception of the process of economic development and the bases of competitiveness. It embodies an implicit aversion to certain forms of competition and an effort to channel competition in various ways." This model goes back to the early post-World War II period, when "the nation was in shambles". There is an 12 developmental policies list which form the building blocks of the Japanese governmental model. The authors discuss the impact of these policies on Japan's successes and failures.
In Chapter 3, the authors discuss Japan's unique management model. "The model stresses attributes such as teamwork, a long time horizon, and dedication to continuous quality improvement, all of which remain important Japanese strengths. But it has also encouraged conformity and a conception of competition that is dangerously incomplete." Again, the authors introduce a list of policies which are typical for the Japanese corporate model. The authors' biggest complaint is that most Japanese companies do not have a strategy, they tend to compete on operational effectiveness. (For more see Porter's 1996-article 'What is Strategy?')
In Chapter 4 the authors try to explain Japanese competitiveness. This model for competitiveness follows the universal model: "vigorous competition in a supportive business environment, free of government direction, is the only path to economic vitality." Most of this chapter is directly taken from Porter's 1990-book 'The Competitive Advantage of Nations', discussing various industries (both successful and unsuccessful).
In Chapter 5, 6, and 7 the authors aim to come up with an answer to move Japan forward. The authors discuss the requirements for both government and companies. "What is needed is nothing short of a new economic strategy, one that builds on the true bases of Japan's past success, recognizes the differences between the country's rebuilding challenges and its present circumstances, and addresses the realities of modern global competition." So can Japan compete? The authors believe it can. "Japan has a history of competing successfully at the highest level and rapidly advancing national productivity, when competition was allowed to proceed unfettered. ... Japan can compete. To do so, however, it will require the systematic changes in both business and government we have described. ... As it has shown in earlier periods of transition, if mind-sets change, Japan has the capacty to move rapidly."
Yes, I do understand the disappointment of some of the other readers. In line with Michael Porter's 'The Competitive Advantage of Nations' (1990) this book is more about governmental issues than the activities within companies as in Porter's bestsellers 'Competitive Strategy' (1980) and 'Competitive Advantage' (1985). In their search for their answer to the title-question (Can Japan Compete?) the authors use an mostly academical and economical approach, which can be daunting to some readers. The book is mostly aimed at Japanese multinationals, economists, and governmental officials, and includes some strong critical comments toward their policies.

7 people found this helpful

Helpful

Top reviews from other countries

John

Strengths and surprising weaknesses of the Japanese system

Reviewed in Germany on January 29, 2013

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Michael Porter and his team of researchers investigated the Japanese economy in great detail over many years. For a long time the Japanese economy was considered a model for industry and commerce, but a detailed analysis revealed that this was due to only a few large companies which were internationally very successful. On the other hand, the economy in general is characterised by innumerable companies with a poor return on capital, no real competition and second-rate goods. Porter showed how the government intervened massively and had an adverse effect on the economy, with the result that the home market is bedevilled by extremely high prices for such basic commodities as food and household goods. The international stars shone because they largely ignored government inflluence. Porter suggested ways in which the economy could be strengthened by a change of government policies.

In some ways this work is academic in its approach, with many detailed analyses of different commodities and even of some individual companies, For the economist this is admirable in its detail. I as a layman found the constant repetitions and the numerous tables of companies and commodities somewhat tiring ("overkill"?). However, the strengths and weaknesses of the Japanese system become clear and explain why so many companies are not as successful as they could be.

I came across this book because it was mentioned in another book on the Japanese economy: "Exposure -- inside the Olympus scandal. How I went from CEO to whistleblower", which gives a fascinating insight into one particular company but also reveals grave weaknesses in corporate policy in general. Also highly recommended.

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