IJMB Journal – Abstracts

International Journal of Management and Business

IJMB Volume VI, Issue 1

Can Both Competitiveness and Profitability Be Sustained?

An International Comparative Analysis of the Performance of Japanese Automakers (1980s to 2000s)

Daniel A. Hellera*, Mihail Marinovb, Yumi Katoc

aGraduate School of International Social Sciences,
bCenter for Economic Growth Strategy
abYokohama National University, Japan. daheller@ynu.ac.jp
cGraduate School of Economics, The University of Tokyo, Japan


This paper combines publicly available financial and sales data with data that was gathered systematically over a 25-year period through extensive company visits. The paper shows that, unlike in the first two decades, for the last decade of the 1980 to 2009 period, Japanese automakers were able to add industry-leading profitability to their long-standing competitiveness in organizational processes and product markets. The academic literature reveals that there are likely two principal reasons for Japanese automakers raising their profitability: (1) the elimination of excessive engineering of vehicle components that are invisible to the eyes of the user, and (2) the thorough and persistent implementation of front-loaded problem solving in the development of new vehicles. To preserve the co-existence of both competitiveness and profitability, the paper argues that Japanese automakers need to extend the elimination of excessive engineering into those components that are visible to the eyes of the user. In addition, the headquarters of Japanese automakers need to be transformed such that they can lead balanced capability building, the driver of both competitiveness and profitability, not only across all organizational functions, but also into the extended enterprise of suppliers and dealers.

Keywords: World Auto Industry, Operating Profit Ratio, Market Share, New Product Development, Vehicle Assembly, Productivity, Lead Time, Production Engineering, Front-loading Problem Solving.

Click for full manuscript (PDF) or back to Volume 6-1, Table of Content.