Thursday, March 29, 2012

article on why J losing the touch.  WSJ.
The immediate cause of the problem is bad product strategy. Japanese firms and the government failed to heed two big lessons taught by Harvard Prof. Michael Porter.
First, as countries mature, their sources of competitive advantage change. At one point, abundant skilled labor, cheap capital and price are keys to competitiveness.  Later on, innovation in products and processes becomes pivotal.
Secondly, strategy is not just about what products to offer, it's also about what products not to offer.  Rejecting these lessons, Japanese firms tried to compete with newcomers like Samsung on cheap capital and manufacturing prowess instead of product innovation. They kept producing formerly world-beating products that now lose money year after year. Forty percent of Japan's electronics output still consists of consumer audio-video products and semiconductors.
pic: tape walkman on Sony Ericsson phone.

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