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Essay / Research Paper Abstract
This 5 page paper looks at the way in which keiretsu create trade barrier by the complex relationships. The writer considers both horizontal and vertical keiretsu, and how they are able to present such strong barriers. The bibliography cites 7 sources.
Page Count:
5 pages (~225 words per page)
File: TS14_TEkeirtsu.rtf
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Unformatted sample text from the term paper:
are often easily perceived. For a company seeking to compete in Japan, or, to a lesser extent with Japanese companies, there are also hidden barriers in the form of the
keiretsu. It is thought by some that with increased competition that Keiretsu are ties are becoming less important, however, we can argue
the opposite, as the commercial environment becomes harsher these informal ties that are a cultural part of Japanese business create hidden strengths (Lai, 1999).
There are six major keiretsu, some operating horizontally, other vertically, such as Toyota which belongs to the Mitsui Group, and the Sumitomo Group includes NEC (Namiki, 1999). These
encourage long-term relationships suppliers whilst reducing costs and enhancing productivity. It has often been rumoured that the only reason Nissan survived its economic difficulties was due to the a strong
support it received from its keiretsu. Family members my own up to 40 per cent of the shares in each others companies and worked together in research and development (Sakakibara
et al, 1993). However they are totally separate entities legally which benefit from a shield against unexpected market pressures or shocks (Ishinomori et al, 1996). Secrecy shrouds many
of these family groups, and it is difficult to find out many allegiances, especially considering over 12,000 companies may be involved (Ishinomori et al, 1996).
The attitude towards lending also reflctsthis different support system. With different levels of bank involvement in industry (kigyo shudan). This has placed much emphasis on the borrowing of
funds in order to succeed. This, in conjunction their enthusiasm to lend, has resulted in over-lending, gearing of up to 50:1 has been known, additionally there are strong cross
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