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Shimano Case Answers

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Submitted By eaglewatch
Words 1275
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Shimano Inc. Case Write-Up

MBAD 6244, March 29, 2011

1. Did the advantages or disadvantages of its location change over time? If so, how did Shimano respond – does it fit Porter’s framework of a global strategy? Exhibit I analyzes Porter’s diamond of national competitive advantage across the four key time periods in Shimano’s history, as outlined below.
Time Period 1, from 1920-1970: The city of Sakai was the epicenter of bicycle production in Japan and was advantageous for the early stages of Shimano’s business development. During the 1930s, Shimano leveraged local demand and expanded to meet regional demand through Asia. However, during the 1940s this centralized location of manufacturing was disadvantageous due to its affiliation with military manufacturing. The decade of rebuilding after the war provided Shimano with new opportunities for production technologies to expand its product line, and then Japan’s economic downturn led Shimano to focus on components, which became their core business. This pressure in Japan to develop advanced technology enabled Shimano to break into the U.S. market in 1965 and dominate the Japanese bicycle component industry by 1970.
Time Period 2, Entry in European Market: Shimano’s success in the home market was enabled by their location in the Kansai cluster (where 65% of all bikes in Japan were produced). Here, Shimano was close to related and supporting industries which spurred innovation and fast delivery of ideas and products. Additionally, Shimano leveraged their location and innovation to expand into production of fishing rods and reels, which required similar technology to that of bike parts. This move proved successful as they were the market leader in fishing rods and reels over the next two decades. However, the advantage of Shimano’s location began to erode with the introduction of the world’s most

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