What is keiretsu strategy?
Keiretsu is a business network composed of manufacturers, supply chain partners, distributors and financiers who remain financially independent but work closely together to ensure each other’s success. Keiretsu are often established to share best practices and improve risk management by lowering unknown variables.
What did the keiretsu do?
A keiretsu (Japanese: 系列, literally system, series, grouping of enterprises, order of succession) is a set of companies with interlocking business relationships and shareholdings. It is a key element of the manufacturing industry in Japan. …
What are the general characteristics of keiretsu?
According to Shimotani (1995:54) a keiretsu can be defined as “the close, long- term business relationships established by large corporations with select groups of smaller firms, and they are linked through investment and the exchange of personnel”.
What type of structure is the Japanese keiretsu structure?
A horizontal keiretsu refers to an alliance of cross-shareholding companies led by a Japanese bank that provides a range of financial services. A vertical keiretsu is a partnership of manufacturers, suppliers, and distributors that work cooperatively to increase efficiency and reduce costs.
What is keiretsu and its advantages?
Advantages and Disadvantages of Keiretsu Working closely together can bring many benefits. Companies in the keiretsu can leverage each other’s expertise to become stronger and better; information shared among customers, suppliers, and employees within the keiretsu can lead to increased efficiency.
What is keiretsu system?
Keiretsu is a Japanese term referring to a business network made up of different companies, including manufacturers, supply chain partners, distributors, and occasionally financiers.
Who was the last shogun?
Tokugawa Yoshinobu, original name Tokugawa Keiki, (born Oct. 28, 1837, Edo, Japan—died Jan. 22, 1913, Tokyo), the last Tokugawa shogun of Japan, who helped make the Meiji Restoration (1868)—the overthrow of the shogunate and restoration of power to the emperor—a relatively peaceful transition.
Which is the best definition of a keiretsu?
In other words, a keiretsu is an informal business group. A keiretsu has generally been defined in practice as a conglomeration of businesses associated with cross-shareholdings which are formed around their own trading companies or large banks.
What was the corporate governance in Japan before keiretsu?
Before the keiretsu system, the primary form of corporate governance in Japan was the zaibatsu, which referred to small, family-owned businesses that eventually evolved into large, monopolistic holding companies.
What are the drawbacks of the Japanese keiretsu system?
A drawback of the keiretsu system is the easy access to capital, which can lead a company to take on too much debt and invest in risky strategies. Japan’s corporate governance system dates back to the 1600s but was propelled by the Japanese government’s newly formed Meiji Restoration in 1866 as the world entered the Industrial Revolution.
How are keiretsu firms insulated from market fluctuations?
When member firms of a keiretsu are associated through cross-shareholdings, which is to say that they own small portions of equity in each other’s businesses, they remain somewhat insulated from market fluctuations, volatility, and even business takeover attempts.