Global Business (Chap 1)
Dept of Technology Management for Innovation
(TMI), Graduate School of Engineering
Professor Kazuyuki Motohashi
工学系研究科 技術経営戦略学専攻教授
元橋一之
http://www.mo.t.u-tokyo.ac.jp
Today’s Class
• Introduction of this course
– The world is flat? Yes, but….
– Growing importance of global business for
Japanese economy and firms
– Changing the rule of the global business game.
• Introduction to global business studies
– Example: China is your “market” or “factory”?
– CAGE and AAA framework in global strategic
making
Some features of this course
• Globalization studies for Japanese firms to
invest in emerging economies, importance
of partnership with government. (C and I)
• Combination of theory (international
business management) and practices:
Teaching method: lecture and case studies
(active class participation is encouraged!)
• International business plan: Evaluation will
be made with cooperation of Hitachi Co.
Ltd.
“The World is Flat”
by Thomas Friedman
• 1st Globalization Era: 1492: Columbus found the
American continent.
• 2nd Globalization Era: Around 1800: Industrial
revolution (by steam engine) drove down
transportation costs significantly.
• 3rd Globalization Era: Around 2000: Internet and
information technology revolution -> Globally flat
business emerges (like Infosys)
What is this?
Galapagos islands
Infosys：Bangalore
Japan as Galapagos Islands?
• 1990, in “Competitive Advantage of Nations” by prof.
Michael Porter, describes Japan as “a country where you can
find the most sophisticated customers in the world”
• 200X, Japanese mobile phones are called as “Gala Kei”,
stands for Galapagos Keitai (mobile phone)
• 2010, Sharp introduced multi media terminal called
“Galapagos”
• 2012, Samsung hits the profit record by “Galaxy”
• 201X, What happened in Japanese mobile producer in the
international market?
From Sharp’s website
Is the world really flat?
デリー市
ホンダ
ハリヤナ州
スズキ
ホンダ
スズキ
ホンダ
ニムラナ
ラジャスタン州
ムンバイ市
UP州
Wall at the national boarder and economics
of fragmented labor market
Price=wage
Pj
Pc
Japan
China
Quantity
What happened if this wall is lowered?
Changes in the world population
Financial Times
What is Globalization and why?
US/Europe
US/Europe
Toyota
Motors
Japan
IBM
Infosys
Toyota
Japan
Motors
China
China
India
India
Microsoft
Catching up of Korea and China
(TFP in electronics industry)
1.4
1.2
1.0
China
0.8
Korea
Taiwan
0.6
Japan
0.4
0.2
0.0
2001
1999
1997
1995
1993
1991
1989
1987
1985
1983
1981
RIETI-ICPA Project, Motohashi (2006b)
What happened in PV module production?
Size of value added
Growing “Good
Enough Market”
Driving forces
Aircraft
(CoPS)
Auto-
EV? of propriety
Protection
technology
motives
(IPR), increasing complexity, strategic
investment in complex system
innvation
PV
panel
PC
Scientific approach for innovation
(digitalization, modularization..)
and technological catching up
Level of complexity (difficulty in imitation)
Development in emerging economies
Such as China and India
New
markets
New
competitors
Global Business Strategy
•
•
Shift to “good enough market” and
improvement in cost competitiveness
Business model re-organization by
service dominant design
World in not so
flat,
understanding
distance
Consistency
with corporate
strategy
China is market or factory?
China is market or factory?
Off-shore production
Local for local
(地産地消）
Export
(traditional global business)
CAGE framework
• Cultural Distance: language, customs, religion,
cultures etc.
• Administrative Distance: regional integration
administration (FTAs), currency, common suzerain
state, political dispute
• Geographic Distance： physical distance, time zone,
etc.
• Economic Distance： per capital GDP, wages, living
costs
Redefining Global Strategy: Crossing Boarders in a World Where Differences Still Matter
by Pankaj Ghemawat (Harvard Business School Press)
AAA: How to manage “distance”?
Adaptation：Customization of product or
services to local market: McDonald’s vegiburger in India, soundless and compact
fridge in China (by Panasonic)…
Aggregation：Globally (or regionally)
standardized product and services: Toyota’s
pickup tracks for SE Asia, Apple i-phone…
Arbitrage：Making profit out of distance：
Infosys, UNIQLO….
Course organization: 2014
• Intensive classes from July 22 to 25
• Pre-registration should be made by July 18.
(to abe@tmi.t.u-tokyo.ac.jp)
• Grouping information will be provided at
the first day (July 22)
• Text book in Japanese is available (Other
materials such as case studies will be
provided on the first day.