Competitive Strategy of the Japanese Integrated Steel Firms in Mature Stage

Nozomu Kawabata

MPRA Paper from University Library of Munich, Germany

Abstract: Around the turn of the century from the 20th to the 21st, the inter-firm relations in the Japanese steel industry changed greatly. Within the country, NKK and Kawasaki Steel consolidated all their businesses and chartered JFE Holdings. Nippon Steel, Sumitomo Metals, and Kobe Steel formed alliances. Abroad, all integrated producers formed alliances with foreign steel firms. Did those changes mean a new step forward in prosperity? Did they mean a desperate counterattack to arrest the decline of the industry? What did they reinforce . cooperation or competition? This paper explains the reasons for those strategic choices of the Japanese integrated steel firms as a consequence of the environmental change and market competition in the 1990s and the early 2000s. The changing pattern of competition is considered, as integrated firms sought the best competitive strategy in the mature stage of the industry. In conclusion, the Japanese integrated steel firms have maintained competitiveness since the collapse of the Bubble Economy. However, they have not made stable profits. In other words, they have not reversed the move towards maturity, although they have not reached a stage of decline. After the collapse of the domestic system of cooperative oligopoly and homogeneous competition, inter-firm relations were reorganized through consolidations and alliances at home and abroad. The future of the integrated firms depends on whether they can take advantage of their competitive capabilities in the new inter-firm relations.

Keywords: Japan; steel industry; competitive strategy; inter firm relation (search for similar items in EconPapers)
JEL-codes: L61 (search for similar items in EconPapers)
Date: 2003-01-07
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