For past several decades, Japan has been famous for its consumer electronics. Nikon, JVC, NEC, Casio, Nintendo, and Sony, just to name a few, are all big brands not only in the Asian market but also in the global one. Japan’s robust economic power also arouse scholars’ interests in investigating its key success factors. A great amount of academic writings and books related to Japan were published, such as Journal of Japanese Studies, Social Science Japan Journal, The Lone Samurai (William Scott Wilson, 2004), and Japan as Number One (Ezra Vogel, 1979). However, since 2008, started with the impact of global financial crisis, Japan has suffered from a series of difficulties. It would be interesting to update our knowledge of the current status of Japan’s economy and specifically to watch over the performance of Japanese consumer electronics companies.
The article took Sharp and Panasonic as the examples of Japanese consumer electronics companies. Recognized by the article, these companies are now facing several challenges: (1) the high technology does not translate into high price/profit, (2) companies from other countries successfully use low-price started to defeat their market share, (3) companies from other countries have also developed competitive technologies, (4) the continued appreciation of Yen, and (5) the weaknesses in product design and marketing. In short, the issues discussed are: (1) R&D investment, (2) marketing and pricing strategy, (3) currency policy, and (4) product design. The consumption of consumer electronics is tied to people’s salaries; meanwhile, people’s salaries are tied to the development of economy. That is to say, to figure out the future market capacity, we first have to precisely forecast whether it will be a bull market or a bear one. Consider the likely economic growth in the future two years (announced by Fed officials), it is quite possible that consumers can accept high-price consumer electronics. Thus, Sharp and Panasonic may keep developing their high technology and charging higher prices. In addition, due to the death of Steve Jobs, Apple’s design and marketing capability has now aroused some analysts’ doubt. I believe that in future three to five years, Apple will not be as prosperous as when Jobs was alive. And these future three years may give them a great chance to catch up their design and marketing capability. I also believe that the low-price strategy adopted by Chinese companies, Taiwanese ones, and Korean ones will keep working in future years -- since they do not possess that high-level technology as Japanese companies do, low pricing is their only exit. All Japanese companies have to do to compete with Chinese companies, Taiwanese ones, and Korean ones is to establish a reasonable price-quality set that the market can accept.
Consider all of the factors above, the practicing managers of Japanese consumer electrics companies still have to do the thorough market research to know what the market expect the quality should be and how it expect the reasonable prices will be before conducting technology development and setting prices. In addition, it would be wise to take advantage of their high technology to produce quality products and to differentiate them from the low-price competitors.
Author: Jeff Uscher
Reference:
1. http://news.cnet.com/8301-1001_3-57547921-92/the-era-of-japanese-consumer-electronics-giants-is-dead/
2. http://www.businessweek.com/articles/2012-11-08/sharps-profits-on-lcd-panels-worse-than-flat
3. http://www.guardian.co.uk/business/2012/nov/11/japan-electronic-money-short-circuits-economy
4. http://www.bloomberg.com/news/2012-11-09/sharp-says-foxconn-talks-could-continue-beyond-march-deadline.html
5. http://www.businessinsider.com/japanese-gadget-makers-need-a-miracle-2012-11
