Reasons for the Success of Japan in Global Markets

Reasons for the Success of

Japan in Global Markets

Introduction

Japan has seen unprecedented economic success on the global scale since the end of World War Two, with economic growth at an average of 10% for the 1960’s, 5% in the 1970’s and 4% in the 1980’s (Japan: Patterns of Development 1994). The zaibatsus of early to mid 1900s set the foundation for the prosperous keiretsus to advance on the zaibatsus after the disastrous effects of the second World War on Japan. The successful keiretsus can be described as a “form of corporate structure in which a number of organizations link together, usually by taking small stakes in each other and usually as a result of having a close business relationship, often as suppliers to each other" (Hindle 2008). The success of these companies and the overall economic growth rates seen in the late 20th century can be attributed by the analysis of several major areas of competitive advantage including the focus on market share, the strong government-business relations, the availability of cheap finance, the mutually beneficial ownership patterns between companies and the efficient management of labour.

Creating a Foundation for Economic Prosperity

The government in Japan attempted to be more self-sufficient and industrialises the nation as quickly as possible in the late 1800's. The Meiji Restoration of 1868 is a major turning point of this change that was aimed at Japan matching the Western level of production and development (Chen 2005). Chen also noted that the revolution included privatisation of major state-owned ventures and the opening up of the availability of private capital. Suddenly, people were free to choose their occupation and move about without restrictions. This also included basic knowledge- and skill-building of the Japanese people through the progressive instalment of a compulsory primary education system, which resulted in almost everyone attending free public schools for six years by...