Micro
           Business Strategy and Groups (Firms)                            Messo: Clusters & Innovations            ...
Japan    BIz grps:Keiretsu - Mitsubishi > too much overlapping biz     Build strong clusters:                             ...
India      Tata > Tata industries > Vc funds > funds from other grp           Workforce
           members > later sold to...
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Microeconomic view of asia business

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BSP2005 Asia Pacific Business - Cheat Sheet

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Microeconomic view of asia business

  1. 1. Micro Business Strategy and Groups (Firms) Messo: Clusters & Innovations Demand (Supporting Industries) Generals Focus vs Diversify – western vs Asian > ? unrelated diversify > Level of Coordination dy/dx success To access intermediate pdts / reduce risk of bankruptcy Clusters ↑ productivity and efficiency (shareholders and employees)/ political connection / lack of • Efficient access proprietary technology /increase in competition/ fill in • Rapid diffusion of best practices institutional voids > ? diff > diff stage of diversity and ties > • Performance comparisons Grps > create barriers to MNC, dev own internal mkt for $$, Stimulates and enable innovation talents and goods(make own pdts), less transparency > coz fund • Innovation opportunities is route around(-) • Knowledge creation & sharing Firm’s Org > Centralize (Samsung) (+) share knowledge & ↑ • Experimentation capabilities (-) info overspill / Decentralize(Sony) Facilitates commercialization As firm move up tech chain • new biz & new lines of established biz Unrelated (low P)> related > focus (High P) 3 processes: local dynamism, attractiveness & link to world mkt JV to Acquisition Y clusters decline: rising cost, discontinued technology, buyers’ needs Family control 2 profession manager changes, lack of rivalry & regulations Diamond framework Different type of innovation • Radical Innovation > completely new > NASA>need scientist • Incremental innovation > small improvement > need engineers • Process innovations > JIT Readings Focus strategies wrong? -Information problems, misguided Tiger and the tech: regulations & poor judicial system (emerging mkts) Advantages Institutional voids are 1.Affordable labor Capital - Lack VC / $$ constrain 2.Center for IT components Labor - unskilled 3.CA in applied technology Product – little info & limited liability law Obstacles Government Regulation - ↑ 1) Environment Contract enforcement - Weak • Lack of home base market Roles of Grps: > cannot filled all voids still • Lack of experience and frame of mind to compete with technology Tale – Grps help countries to catch up by RE, FDI and 2) Lack of Innovative Workforce licensing but as they grow > Hard to RE and No one provide • Education 2 Faces – Grps helps to innovate > ↑ productive > ME F > • Culture that the government ↑Capital, political ties & brand attract foreign firms, Share promote knowledge 3) Shortage of Venture Capitalist How to rebound(Japan) > performance related scheme to get • Poor financial backing new ideas and compete by dy/dx in pdt and quality (Deming) > • Strong Gov. Restriction build strong clusters (same language) & they love to make > Ipod inside all japan items Location matters: a ext factor. (See pic) 1.Built talent and $$ 2.IPR & tax incentive for Inno. 3.Diamond – creates need and opportunity for Inno. ↑ competitive pressure 4.UNI system 2 link
  2. 2. Japan BIz grps:Keiretsu - Mitsubishi > too much overlapping biz Build strong clusters: Citizen> started with Now Sony > shift towards focus + foreign managers> energy biz strong engineers copy swiss tech & help (toyota) relationship suppliers with swiss tech> applied ↑ buyers own knowledge > excel Biz culture > managers lack of empowerment Knowledge sharing and dy/dx to win long working hours > unproductive Seniority pay system strong areas In clean Tech & Silver Tech Less woman on top management > men stubborn more risky Korea Chaebols: Samsung, Daewoo, Hyundai > political & financial Highly skilled, tech savvy workforce tend to support local brands connections > Koreans are proud of their success, global Rigid education system>rote learning over recognition but dislike e huge amt of power they weld > gradual creative approach>harder to shift 2wards new restructuring (foreign owned, corporate governance) after 1997 form of knowledge-based growth crisis But Biz group limit new firm growth •Hsin-Chu Science-based Industrial Park (HSIP) •Dense business network allows a company •Local (B2B mainly), Global Taiwan Taiwan & China > need •One of the world’s main centers of IC manufacture, to source easily for new components from (B2B & B2C) demand each other to grow > a computers, and peripherals local subcontractors •HSIP -Attracts MNC and war both suffer •Major Taiwan companies such as Acer, Mitac International, and •Firm can specialize and innovate more thus needs to be innovative UMAX Data Systems are located here rapidly to cater to the needs of Taiwan & Japan & korea • •SMEs in Taiwan make up for the marketing global audiences. > need to move up tech •With HSIP as an industrial cluster, intense competition among inefficiencies of each undersized member •75% of Taiwanese electronic chain these firms accounts for rising productivity and innovation. productions are sold under •Supported by government who do not restrain their someone else’s brand name. freedom in doing business •US is the 2nd largest importer of Taiwan’s good. A country that is at the forefront of technology. China Old > bad coz dev in SOE > SOE not performing & band having Improve private sector: huge (NPL) - no transpancy & corruptions among old employees • guan xi 2 real biz to ^ replace ironbowl, privatization culture > bnw Growing SME but no innovations + firm engage in copy & fakes • legal reform > SME short of capital > no microfinance • accounting reform coz prevented by gov (getting too big no good) > so get fund • IPr from overseas by selling stake(JV)
  3. 3. India Tata > Tata industries > Vc funds > funds from other grp Workforce members > later sold to Jardine > Tata get capital & Jardine get IIT graduates (intellectual capital) plays an exposure impt role in the economy > CEO Tata > selective hiring> provide training> grp them as corhort > SunMicrosystem > confidence & as they spread > stay in touch and info flow entrepreneurship > brain drain Workers (construction) contribute e most % to GDP Major constraint: poor infrastructure > power shortage, telecommunication Bangalore is known as the Silicon Valley of India > India's leading IT employer & exporter SEA: why no grow so well > Gov Malaysia protect malay > grew lazy > eg easy to get into uni and special privileges (bumiputras) Indonesia Lippo Group > able to lobby Gov > influence gov Thailand Product Mkt Advantages • Potential in petrol • > free mkt (asean) chemical and car parts than China • Net exporter of both pdts • China will need to import from Thai too if it grow big • tax incentives

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