Corporate Strategy: New Business Strategies for the 21st century - Choose and focus

(excerpt) In our excitement over China’s ascent, we have forgotten to update our view of corporate Japan. This is understandable, because remnants of the “Old Japan” persist, and we have not yet trained ourselves to look for the “New Japan.” But the reality is that the old keiretsu no longer exist; main banks as bailout leaders have been supplemented by new laws and actors, such as equity funds; 80% of listed Japanese firms have switched to performance promotion and pay; the manufacturing industries have globalized to a point where subcontractor relations have been turned upside down; and global competition and discount mavericks have broken open the retail industry. The most important change of all is that in many industries the household names of Old Japan are no longer among the key players.

The unifying thread behind these myriad changes is the last decade’s transformation from diversification to focus. Instead of each firm like Panasonic (formerly Matsu- shita) producing all products, from toasters to semiconductors, they are focusing on “fewer, but better.” The gestation period is still underway, but the core transformation has already occurred.