Courage to Change Japanese-style Business in Crisis (1992)
"Not ‘Torrential Exporting’ but ‘Insatiable Importing’"
After the war I focused my efforts on developing revolutionary technology and a reasonably priced, high quality product for the global consumer that would put me at the forefront of manufacturing. That didn’t just apply to Sony, but was a common goal among all Japanese manufacturers.
Under an ethos of ‘catch up and overtake American manufacturing’, Japanese companies poured all of their resources into technological development, product development, improved manufacturing and quality control, and the surprising competitive strength they achieved in the car, electronics and machine tool industries make them world-class.
Compared to their American rivals, Japan’s high quality and performance products were comparatively cheaper and that allowed them to succeed in a market that had been dominated by the US.
As a result of the competitive strength of Japanese products in Western markets, we today see a backlash of criticism of Japanese companies, and Japan itself, from Western nations. The formidable competitiveness of Japanese products in Western markets has reached the point of becoming a political problem and further forays into those markets by Japanese goods will give further momentum to those calling for legal or political moves to enforce restrictions.
As I have mentioned before the West takes a tough stance on Japan and global criticism of Japan can be seen daily in the World media. For example, the French Prime Minister, Edith Cresson said “Japan is an invader plotting to conquer the world”, and American revisionists stated that Japan is a peculiar country that lives by different rules to the rest of the world. On the other hand, Japan’s top industrialists couldn’t stop wondering “what’s wrong with working hard to produce good products at an affordable price.”
At one point, Japanese products were likened to “torrential rain” and the government advised manufacturers to rein in exports. At that time I remember opposing the Japanese government instructing businesses on how to act. Similar to American companies, Japanese businesses operate in a free market and if consumers don’t want our products we have no controls over forcing them to buy them. Accordingly, I though that Japanese products are sent abroad to satisfy foreign consumer demand, and rather than describing exports as “torrential rain”, isn’t it rather a case of “insatiable imports”.
As an example, the then Vice-Chairman of the EC criticized Japan for allowing its VCRs to flood into Europe. I responded by asking, “Why are you so angry? When European consumers demanded video players, it was largely Japanese manufacturers that could supply their needs. That is why Japan exported them in large amounts. Isn’t it strange to then criticize Japanese manufacturers?”
I would suggest that Japanese manufacturers had predicted 10-15 years earlier that the successor to the color television would be video, at which point they set about developing and patenting their products. At the same time the European manufacturers were little concerned with video, Philips being the only manufacturer working in this field.
Years later when global demand for VCRs grew, only Japanese makers were able to offer a quality and reasonably priced product, which they exported in bulk. Therefore, I think it is strange to complain about Japanese “torrential exporting” when the blame should lie with the European manufacturers that failed to anticipate demand.
( Extract from" Nijuisseki e " (Towards the 21st Century), published by WAC)