Shimano

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Does Shimano’s home base fit Porter’s definition of an advantaged location? Considering the success Shimano had after the bicycle boon starting in the 70’s, Yes. An important piece of the puzzle for business success is the location. Shimano’s location enabled them to service two of the three major markets of the triangle [Japan, China, and Europe]. Keeping R&D close to manufacturing also aided in the efficiency of the operation. Secondly, having the proper factor conditions in place, such as, skilled labor, resources, and technological base contributed to the success of the strategy. Did the advantages or disadvantages of its location change over time? Not in this situation. With the bulk of sales and manufacturing in the Far East [Taiwan, China, and Japan], Shimano was conveniently in the right place at the right time. As technology developed and markets increased, so did shipping routes making it easier to enter emerging markets, as well as, increase supply to distant markets. If so, how did Shimano respond – does it fit Porter’s framework of a global strategy? It utilized the efficiency of economies of scale by accessing the most customers and markets; utilized strategic by cross subsidization between countries; and reputation of having cross over customers that recognition brand and reputation. Would you recommend that Shimano develop additional functions in North America (besides sales and service) as it has in Asia and in Europe? Why or Why not? No. With the bulk of the market close to home and with the resources it needs easily available, my recommendation is to keep it to the central established location. One consideration that is not discussed in the article is the expense of manufacturing in Japan. It is possible that the business could reduce overhead by moving the manufacturing to a cheaper location. A cheaper location may provide reduced building expenses, but skilled labor may not be available. Regardless of the information, the...
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