Sharp Corporation: Beyond Japan
(10 pages of text)
Faced with major losses from operations, Sharp Corporation’s young and unconventional president questioned the company’s long-standing operating model. Sharp was a leader in the area of liquid crystal display (LCD) technology and manufacturing. It also held strong positions in several categories of consumer electronics in the Japanese market. Although Sharp had been increasing its involvement in overseas markets, it had yet to replicate its successes overseas. Sharp’s operating model placed sensitive, high-value-added operations such as research, development, and component manufacturing near its headquarters in Japan. The company jealously guarded its LCD knowhow and had implemented strict security measures at its LCD panel plants. As Sharp’s international sales grew, limitations with its business model became more apparent. Operating primarily in Japan had drawbacks, such as exposure to currency risk, high infrastructure cost, and high taxes. Additionally, the logistics of shipping large items overseas, such as LCDs and solar panels, presented other dilemmas. Sharp needed to reconsider this model and develop an approach that was more suitable to the environment in which it now competed.
This case is suitable for strategic management, international business, or international strategy courses. In a strategy setting, it offers the opportunity to examine the tension between protecting proprietary resources and having efficient operations. It allows for an examination of the tradeoffs between maintaining a technological lead and fully exploiting this lead for financial benefit. In an international context, it provides an opportunity for discussing corporate-level international strategies, as well as country risk and entry modes.
Japan, Large, 2009
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