The Rise and Fall of The 'Keiretsus' in Japan

Case Studies | Case Study in Business, Management, Operations, Strategy, Case Study

ICMR HOME | Case Studies Collection

Case Details:

Case Code : ECON012
Case Length : 14 Pages
Period : 1980 - 2003
Pub Date : 2004
Teaching Note :Not Available
Organization : -
Industry : Microfinance
Countries : Japan

To download The Rise and Fall of The 'Keiretsus' in Japan case study (Case Code: ECON012) click on the button below, and select the case from the list of available cases:


For delivery in electronic format: Rs. 400;
For delivery through courier (within India): Rs. 400 + Rs. 25 for Shipping & Handling Charges

Economics Case Studies
Case Studies Collection
Short Cases Studies
View Detailed Pricing Info
How To Order This Case
Business Case Studies
Area Specific Case Studies
Industry Wise Case Studies
Company Wise Case Studies

Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

<< Previous

Introduction Contd...

The Keiretsus played a major role in the emergence of Japan as a leading global economic power after the World War II. The Keiretsu structure protected the companies from the vagaries of the market and this helped them to grow. But on the flip side, it resulted in these companies having a less proactive approach when it came to assessing the changes in the environment and adapting to those changes.

The long reaction time of the Keiretsu companies in relation to external changes gradually became a major disadvantage for them. By the early 1990s, the advantages that a Keiretsu structure provided to its affiliated members began to diminish.

Rise of the 'Keiretsu'

After the Meiji Restoration of 1868,5 large business groups like the Mitsubishi shipping conglomerate, Mitsui trading company and Yasuda banking complex emerged in Japan.

These business groups laid the foundation of the oligopolies6 that came to be known as the Zaibatsus, the precursors of Keiretsus. The Zaibatsus consisted of a mix of firms including banks, trading companies, and manufacturing concerns held together by a holding company under a single family. It was during the Meiji period that Japan began its first phase of industrial development through the export of primary products and import of light industrial goods. During the World War I (1914-18) Japan stayed neutral and this helped the Zaibatsus grow. The Zaibatsus partnered with the government in building the infrastructure of Japan, through large contracts. The Zaibatsus also built up the heavy industries of Japan and their clout expanded.

According to published reports, in the 1930s, the four leading Zaibatsus: Mitsubishi, Mitsui, Sumitomo, and Yasuda, controlled one third of all bank deposits, one third of all foreign trade, one-half of shipbuilding and maritime shipping, and most of the heavy industries in Japan.7 After the World War II, the Allied Forces8 occupied Japan and dismantled the Zaibatsus...

 Excerpts >>

5] The Meiji restoration refers to the restoration of imperial rule in Japan after the Tokugawa shogunate was toppled in 1868.

6] In an oligopoly, a few firms dominate the market.

7] "Zaibatsu",

8] The Allied Forces and the Axis Powers opposed and fought each other during World War II. The Allied coalition consisted of Britain, Russia and the United States, while the Axis coalition consisted of Germany, Italy and Japan.


Case Studies Links:- Case Studies, Short Case Studies, Simplified Case Studies.

Other Case Studies:- Multimedia Case Studies, Cases in Other Languages.

Business Reports Link:- Business Reports.

Books:- Textbooks, Work Books, Case Study Volumes.