1. Global Business #1 April 8, 2012
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

2. 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

3. 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.
International study tour will be planned.
Bilingual teaching will be tried, this year.

4. “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)

5. What is this?
Galapagos islands
Infosys：Bangalore

6. 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

7. Is the world really flat?

8. 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)

9. 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?

11. Sources of Economic Growth?

12. Changes in the world population
Financial Times

13. GDP size comparison

15. What is Globalization and why?
US/Europe
US/Europe
Toyota
Motors
IBM
Toyota
Motors
Infosys
Japan
Japan
China
China
Microsoft
India
India

16. What is competitiveness? (Japan, 1995=1.00)
“Productivity in Asia”
(Jorgenson, Kuroda and Motohashi)
2007, Edgar Elgar

17. Catching up of Korea and China (TFP in electronics industry)
RIETI-ICPA Project, Motohashi (2006b)

18. What happened in PV module production?

19. Growing “Good Enough Market”
Driving forces
Aircraft
(CoPS)
Growing “Good Enough Market”
Size of value added
Protection of propriety technology (IPR), increasing complexity, strategic investment in complex system innvation
EV?
Auto-motives
PV panel
Scientific approach for innovation (digitalization, modularization..) and technological catching up PC
Level of complexity (difficulty in imitation)

20. 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