Facing Challenges

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					Facing Challenges

    Chi Schive

   April 16, 2001
      Changing Environment
• Globalization
  World trade has been expanding much
  faster than world production
• Weightless Production Technology
  The quickly developed IT technology has
  changed the way of manufacturing and
  doing business.
       Merge: An Industrial
• Merge Waves of the U.S. Economy
• Merger in the Financial Sector
     Merge History in the U.S.

1989-1910, Merge for Monopoly
  1. 15% of plants and employment involved.
  2. U.S. Steel came from emerging 785
      plants--combination of combinations.
  3. Standard Oil acquired 20 of 25 refineries
      in the Cleveland area.
• 1923-1931, Merger for Oligopoly
  The formation of GM
  2,750 utility companies, 43% of total, were merged.
• 1960-70’s, Merger for Growth
  The market boom encouraged inter-industry
• 1980’s and After, Merger for Growth,
  Diversification and Conglomeration
  Merge caused by deregulations
    Merge in the U.S. Financial
• Riegle-Neal Interstate and Branching
  Efficiency Act of 1994
• Financial Services Competitiveness Act of
Merge in the U.S. Financial Sector
• Chemical Bank and Manufacturers Hanover
  Trust    Chemical Bank
• Bank of America and Security Pacific
  Bank of America
• Chemical Bank and Chase Manhattan
  Chase Manhattan
• Citi Corp. and Travelers Group   Citi
• Bank of America and National Bank
  Bank of America
     Performance After Merger
• About one-third of all mergers failed.
• Benefits of recent financial mergers are yet
  to be seen.
• Merger initiated from outsiders, such as
  banks, tends to be less satisfactory.
• Should merger for survival be given a
  different thoughts?
   Knowledge, Innovations and
• Innovation deals with problem solving.
• The capability of solving problem is related
  to the stock of knowledge held and the
  capability of using that knowledge.
• Knowledge comes from experience, the
  publicly available information and some
  uncodified characteristics and tacitness of
  From Industry to Technology
• The Boundary of Industry Turning Blur
• Technology Paradigm, An New Way of
  Thinking Industrial Development
            Fifteen New Growing Area,
                    Japan (1995)
                                                                      Examples of new products and services

Health and welfare                                          Home care, care equipment, home health,
                                                            telemedicine, advanced medical equipment
Culture and family life support                             Community business, continuing education, leisure
                                                            travel, apparel
Information and communications                              E-commerce, content, GIS (geographical
technology                                                  information systems), electronic government
New manufacturing technologies                              Next-generation new materials, advanced
                                                            production control robots, maintenance-free
Distribution and transport                                  Internet mail order, third-party logistics (3PL),
                                                            distribution information services
Environment                                                 Low-pollution vehicles, recycling, environmental
                                                            equipment, environmental creation and restoration
Business support                                            Outsourcing, authorization business, solutions
Marine business                                             Mega-float project (ultra-large floating structures),
                                                            fishing industry infrastructure
Source: Nomura Research Institute, from Review of the “Action Plan for Economic Reform”, Ministry of International Trade and Industry, March 1998.
             Fifteen New Growing Area,
                     Japan (1995)
                                                                                s     w              e
                                                                         Example of ne products and s rvices

Biotechnology                                                  Pharmace       ,
                                                                       uticals food, chemicals,
                                                               e rgy/environme  nt

Urban environmental facilities                                   w         ys ms
                                                               Ne traffic s te , cable burying

Ae pace (private demand)                                          xt- ne                          , s
                                                               Ne ge ration aircraft, hub airports te ting aircraft

  w ource of e rgy and e rgy
Ne s       s  ne        ne                                     Solar e rgy, w
                                                                      ne           ne       te to- ne ys ms
                                                                              ind e rgy, was - e rgy s te ,
cons rvation                                                      an ne      ne     e               s
                                                               cle e rgy, e rgy s rvice companie (ESCOs )

Human re ources                                                 e
                                                               T mp s taffing, vocational training, recruitment

Internationalization                                           International trans port, fore             s
                                                                                             ign companie ,
                                                               inte              ine s
                                                                   rnational bus s cons     ulting, support for
Housing                                                        Renovation, pre vious ow d hous
                                                                                    ly ne              t, w
                                                                                              ing marke ne
                                                               building materials

Source: Nomura Research Institute, from Review of the “Action Plan for Economic Reform”, Ministry of International Trade and Industry, March 1998.
        Technology Paradigm

Technology paradigm affected by three
  l. Certain needs to be fulfilled.
  2. Some scientific principles to be applied
      for that task.
  3.Certain supportive or material
      technology to be used.

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