Sharp Corporation Beyond Japan

Sharp Corporation: Beyond Japan

Case brief

Due to its evolving environment, Sharp Corporation today is concerned about its declining profit, unsubstantial product differentiation strategy and the limitations of its business model to approach overseas market successfully. These concerns are mainly derived from current major shifts that are happening in the firm’s environment such as economic recession, growth of the strong competitors in overseas emerging markets combined with limitations of differentiation in the TV business. Internally, the disadvantages of its long standing business model that does not fit the corporate’s overseas market strategy, also seem to cause a big problem for the firm to approach those markets.

Current economic recession and maturity of the markets of high-income countries steadied the Sharp’s growth opportunities whilst the firm was spending large amount of money on R&D and capital investments. Market forecast in high income countries expected to fall because customers already replaced their old TVs with flat panel TVs. Therefore the firm had to seek new growth opportunities in overseas.

Booming markets such as China present growth opportunities but Sony and Samsung were strongly pursuing big market shares in global stage especially in China. Not to mention it has been difficult to pursue product differentiation in the TV industry, Sharp’s bigger screen size product differentiation was unsubstantial. In addition, good quality and better image could not fully address the need of Chinese customers. Cost effective production became absolute requirement for Sharp in order to maintain growth and compete in emerging markets.

However the firm’s current business model, centralized operation within Japan, presented a few disadvantages in terms of cost efficiency, logistics, currency risk, high infrastructure cost and high tax cost. These factors are positioning the firm in uncompetitive state compared to Sony and Samsung. On the other...