Shimano, Inc.
Shimano Inc.
Case Questions:
1. Does Shimano's home base fit Porter's definition of an advantaged location? 2. 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? 3. 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?
November 16, 2011
International Business MBAD 6244
Professor Rafael Lucea
George Washington University School of Business
Introduction. Over Shimano’s lengthy history, shifts in factor conditions; demand conditions; supporting and related industries; firm strategy, structure, and rivalry; and government and regulatory factors (see Exhibit 1) have heightened and dulled Sakai, Japan as an advantaged location for its home base. This analysis examines Shimano’s competitive advantages over four distinct periods in the company’s life: early history (1920-70), rise to industry leadership (1971-79), explosion of the mountain bike market (1980-1990), and recent competition with SRAM (1991-2001) (see summary in Exhibit 2). Using Porter’s Diamond framework, this paper dissects the events and conditions contributing to Shimano’s successes and struggles during each of the aforementioned periods and prescribes a global strategy to add value to the firm for the future.
Early History. (1920-1970) As a major center of bicycle production in Japan, Sakai provided favorable factor conditions such as local expertise in bicycle manufacturing and highly skilled, innovative workers. The long tradition of samurai sword-making provided a strong related industry, given that both require skilled metalworking. Furthermore, the presence of bicycle manufacturing in Sakai since the introduction of the bicycle to Japan in the late 19th century strengthened its advantage as a location from the perspective of both supporting industry and competition.
Case Questions:
1. Does Shimano's home base fit Porter's definition of an advantaged location? 2. 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? 3. 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?
November 16, 2011
International Business MBAD 6244
Professor Rafael Lucea
George Washington University School of Business
Introduction. Over Shimano’s lengthy history, shifts in factor conditions; demand conditions; supporting and related industries; firm strategy, structure, and rivalry; and government and regulatory factors (see Exhibit 1) have heightened and dulled Sakai, Japan as an advantaged location for its home base. This analysis examines Shimano’s competitive advantages over four distinct periods in the company’s life: early history (1920-70), rise to industry leadership (1971-79), explosion of the mountain bike market (1980-1990), and recent competition with SRAM (1991-2001) (see summary in Exhibit 2). Using Porter’s Diamond framework, this paper dissects the events and conditions contributing to Shimano’s successes and struggles during each of the aforementioned periods and prescribes a global strategy to add value to the firm for the future.
Early History. (1920-1970) As a major center of bicycle production in Japan, Sakai provided favorable factor conditions such as local expertise in bicycle manufacturing and highly skilled, innovative workers. The long tradition of samurai sword-making provided a strong related industry, given that both require skilled metalworking. Furthermore, the presence of bicycle manufacturing in Sakai since the introduction of the bicycle to Japan in the late 19th century strengthened its advantage as a location from the perspective of both supporting industry and competition.