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Japanese companies could be caught napping as Chinese brands go global

22 Comments

Japanese firms who fail to look over their shoulder for fast-approaching Chinese brands going global are making a fatal mistake, according to new analysis by marketing experts Nirmalya Kumar and Jan-Benedict Steenkamp.

In their new book "Brand Breakout – How emerging market brands will go global," Professors Nirmalya Kumar and Jan-Benedict Steenkamp identify ‘’The Asian Tortoise Route”, which has enabled Japan’s many global brands such as Canon, Honda, Nissan, Panasonic, and Toyota to break into the international marketplace and cause considerable distress to Western companies.

Nirmalya Kumar, Professor of Marketing, London Business School, explains: “Nissan and Toyota are quintessential Asian Tortoises: they crawled into the low end of a developed market and crept steadily upward to the top drawer.

“A golden rule in strategic management is to understand your competitors. This is a crucial prerequisite for being able to develop effective counterstrategies. In the past, companies ranging from RCA and American Motors to Philips Electronics, Thomson, and Peugeot were caught napping while Japanese brands entered the global marketplace.”

Where are these companies now the authors ask? They are either bankrupt or relegated to a minor position in markets they once dominated. “There is less room for complacency and surprise than ever before”, says Professor Kumar.

The authors urge Japanese managers to plot both counter-and cooperative strategies, to forge successful alliances, use mergers and acquisitions, and by no means to underestimate Chinese companies attempting to take their brands global as they break out into international markets.

“The ‘Asian tortoise’ moves slowly but inexorably”, says Professor Kumar. Particularly in the areas of car manufacturing and electronics, the Chinese Asian Tortoises are investing in R&D, upgrading their market research and product development capabilities and setting up design centres in Western markets. These are all hallmarks of successful global brands and a warning to Japanese firms that their Chinese competitors are gaining ground quicker than they might think.

Professor Kumar says: “Haier, South China Tire & Rubber, and Pearl River Piano have demonstrated that the tortoise strategy can work for Chinese firms, as it did in Japan, taking them through a succession of stages: ‘build to cost’, ‘build to volume’, ‘build to quality’ and ‘build to brand.’"

The Asian Tortoise strategy, which the authors describe as “the mother of all routes” to cracking international markets with globally successful brands, is also likely to work in Bangladesh, Myanmar, Vietnam and other emerging markets.

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22 Comments
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Japanese companies could be caught napping as Chinese brands go global

omit 'could be' and everything is perfectly alright.

7 ( +9 / -2 )

The Chinese,(including Taiwan), Japanese, Koreans, and Mongolians could do like Europe and have their own Mongoloid Union. Or call it whatever name you want. Maybe Yellow Union? The problem is that there is more distrust amongst themselves.

-12 ( +3 / -15 )

Haier for sure is getting a bit of the pie. they have chosen a good brand name which nobody would guess it is a chinese brand. in europe, people thought it was a german brand only when they check deeper they found out that it is chinese. Many in Asia thought it was an American brand.

4 ( +5 / -1 )

Some14some, so you agree that state-owned Communist companies are the wave of the future? China is going to collapse. Just give it time. Also, Avigator, the problem is that currency unions never last.

-1 ( +4 / -5 )

Caught "napping"? Sorry, but after this long it's clearly a self-induced coma, not a nap.

4 ( +10 / -6 )

This is complete nonsense. Japanese companies should have gotten out of consumer products a decade ago. There is no profit there for Japanese companies. They have to concentrate on their really strong point: materials and components. Open your Samsung phone and all the advanced materials (screen materials etc.) are Japanese made, and all the advanced circuitry is Japanese made (designed at their R&D center in Yokohama, Japan). Same with the L&G tv. Only Japanese companies have the know-how and capital to make these. Japanese brand names should disappear, but companies president's pride is too strong.

1 ( +5 / -4 )

I don't think China's such a threat, as their economy is on the verge of implosion.

South Korea, on the other hand, are soon going to be the Star of Asia.

1 ( +5 / -4 )

@gokai_wo_maneku

hahahahaha.....

open your toshiba, sony, panasonic, fujitsu Computer, i give one yen for every component you find that is make or develop by a japanese company.

-4 ( +2 / -6 )

@ossanAmerica Let it go. We in Asia are used to it. Japan is an insular, homogeneous society. They can't see beyond their nose! The world is safe if they are weak. Give them strength and we will all be in deep kimchi. Japanese products are good but they are stagnant now. Chinese products are not as good as Japanese products now, but they are a vast improvement over the past 20 years.. 20 years ago, they didn't have useable TVs and fridges, let alone automobiles. Give them another 20 years and let's see what happens. Progress can be easily comparative. In the past 10 months, US and European products as well as Korean products have been making great inroads in China whereas Japanese products are reporting pathetic results in comparison. Continue this for another few years and let us see who laughs last. What is a bit of name calling? If it makes them happy, so be it.

0 ( +2 / -2 )

It should be South Korea, not China.

Rarely does the global market take Chinese brands seriously at this point, and Korean brands are now where Japanese brands once were in the 70s-80s.

Chinese brands will have to wait for Korean complacency to set in (which seems quite far off into the future).

On a related note, Look at Hallyu. That is the coup de grace that killed any potential left for aggressively marketing Japanese pop culture overseas. .

1 ( +4 / -3 )

Chinese brands will have to wait for Korean complacency to set in (which seems quite far off into the future).

No, some Chinese companies are doing better than you think, and very fast. For example, Haier. They make basically evreything, and the quality of their stuff is pretty good. They could become the new Samsung before than you believe. The market changes really fast, specially in these moments of crisis.

1 ( +2 / -1 )

Brands won't be important in the future for small and mid-sized manufactured consumer goods anyway. Items will be 3-D printed locally from downloaded specs. And that's a field dominated by the U.S.

-2 ( +0 / -2 )

Chinese brands are successful in USA. Not TV, not cars but any inexpensive super market products. Napping is better than making manufacturing plants in USA and trying to find people who work for $2 a day labor in USA. China hasn't market even trash bags or toilet papers in COSCO or Walmart yet. Some t-shirts but not even bikinis.

0 ( +1 / -1 )

Items will be 3-D printed locally from downloaded specs. And that's a field dominated by the U.S.

Yes it won't be long before we can 3D print a new TV or fridge ;)

1 ( +1 / -0 )

My frig is Haier. It has worked great for the year I've had it. Still, I noticed that the compressor is Japanese made.

1 ( +1 / -0 )

This is complete nonsense. Japanese companies should have gotten out of consumer products a decade ago.

I like the airy generality of that statement.

0 ( +0 / -0 )

There is nothing out of ordinary with Chinese products at this stage of its development. When I was in Europe in the 70s, no sound minded person wanted to touch a Japanese car, but today Toyota is competing very well against the VW, Opel etc. Give China another 30 years, the story will definitely be different.

0 ( +1 / -1 )

3-d print system is standard with Japanese brand printers in USA. Are there Chinese brand copier or printer? No. Not USA brand, either. It is hard to find USA products in USA. Chinese? Some. Toy and manga stores are with Nintendo and Nintendo, etc. Maybe Chinese food made in U/SA. Nog made in China,

Cars in USA. Made-in-USA Japanese brand cars. Not even Made n China Ford nor GM car..

TV and Laptops? Sorry but only Korean are superior next to Japan.''

-1 ( +0 / -1 )

Chinese brands have a long way to go. In Canada they have a reputation as being cheap junk.

0 ( +1 / -1 )

Japanese companies have been in a coma for decades. They forgot how they got to where they are. Chinese products, junk? That what the West thought of Japanese products in the 50's; cheap junk. Then came SONY with new products and took over the TV market from RCA. What have the Japanese companies done, at the same time that they outsourced or built plants in China; giving away trade secrets, they have gone done in quality. Toyota, Honda, Nissan and Subaru had recalls, design screw-ups. SONY is only a shell of what it was in the 60's. Korean companies seem to be at the top now but they are showing problems. This is giving China an opening. Now is there a company like SONY of the 60's and 70's or even Apple of today? Not yet from China. But with Apple loosing Steve Jobs, there is an opening for a company to take the spotlight. No, Samsung was and is not anything like Apple or SONY of the past. I would bet that next company on the scale of SONY or Apple will come from China. European is and has been innovative in more than a century. China has the talent, the money, and possibly the will to create the next innovative company. We will know in another 10-15 years. SONY died in the 80's, Apple didn't replace the walkman with the iPod until the 90's. Every country and most world leading corporations have established a presence in China. Some Chinese will rise from the gifts of the West, Japan, and Korea to create the next .....

0 ( +0 / -0 )

"Broadcasters ban Panasonic 'smart' TV commercial" says it all for Japan. They may have 'some' very innovative developers but on the other hand the system is against them. Good luck to them....

0 ( +0 / -0 )

Japanese companies tend to create own product by observing products from other nation. Koreans get sued by disassemble and copy (APPLE product etc) China? Neither. Japan has centuries of tradition of such behavior. Kanji words, Tea ceremony, Shinto, Buddhism, camera, computer, telephone, Green Tea, Top Ramen, etc, They even replaced USA auto market and electronics industry. Movies - CBS Sony since late 1940's. Sony bought many Hollywood companies and even now Sony CBS. For older TV series, Sony Entertainment company revitalize at ME TV channel. Japan inc in USA welcome Chinese inexpensive products. They don't have to spend any money to create a factory in USA. They can take nap for more than 10 more years from now on..

-1 ( +0 / -1 )

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