- What are the reasons for withdrawal, and to what extent was it influenced by Japan being a mature economy?
- Were there any barriers to market withdrawal and what role did these barriers play?
- What influence did company specific factors like activities
along the value chain, partner involvement and size, have on the
reasons to withdrawal?
The focus of this exploratory research project is on production industries in which more than 400 exit cases were identified for the period between 1999 and early 2005. Additional interviews with top management of companies still present in Japan have enhanced the findings of the project. Results of the study suggest that weak performance and a poor future outlook were significant influences in the decision to withdraw. Furthermore, low growth in Japan during the period of withdrawal cases included in the survey added additional pressure on the FACs in Japan. Nevertheless, most companies have not left Japan completely, but have instead switched to a mode of lower market involvement or restructured their presence. Other reasons for withdrawal and barriers to withdrawal had a significant influence on the choice made by international companies of whether to withdraw the former affiliate’s activities completely from the Japanese market, to continue by restructuring, keeping a stake in the affiliate, or to change the mode of market involvement to importing. Furthermore, the results of the study suggest that there are significant difference in the importance of withdrawal factors depending on the specifics of the affiliate and the parent company.
Steffen David is Doctoral Student at the Institute for East Asian Studies, University of Duisburg-Essen. He is currently on leave of absence from McKinsey&Company where he has consulted clients in the automotive and telecommunication industries in Europe and Asia.