How Effective Innovative Companies Operate — Lessons from Japanese Strategy

Abstract

Japan's economic miracle results from a combination of factors including governmental support for selected industries, labor factors, cultural factors, management factors, and corporate strategy. When corporate strategy is examined, it becomes clear that to Japanese firms, strategy is a market share game, with constant striving for lower costs and relative differentiation achieved largely through continuous improvement. At the core of this strategy are product and process innovation. This article describes the typical large‐ and medium‐sized Japanese firms' innovation strategies in terms of several decisions which taken together constitute innovation strategy.