Strategies of gaining competitive advantage at the generic and business unit level: A study comparing American, Japanese and German companies operating in the United States

Multinational Business Review, Spring 2000 by Shah, Abhay, Zeis, Charles, Ahmadian, Ahmad, Regassa, Hailu

Data Analysis

The data was analyzed using means, medians, analysis of variance (ANOVA), and KruskalWallis test of significance.

RESULTS

The Response Rate

Altogether, 160 (18.6%) completed questionnaires were received. However, only 136 of these were usable, resulting in a usable response rate of 15.8%. 63 of the usable questionnaires came from US firms, 48 from Japanese firms, and finally, 25 from German firms. Table I shows the characteristics of the companies.

Table I shows that currently in the US, Japanese and German companies tend to be much smaller than their American counterparts, and consequently their sales are also smaller. Profits for US companies have increased in the last 5 years, while that for Japanese and German companies have remained the same. Japanese firms consistently underestimate their achievements (Johansson and Yip, 1994) and thus their low response on profits. It Is also very likely that Japanese companies are at the initial stages of penetrating the US market, and are trying to build market share at the expense of profits. Japanese companies see other Japanese companies as their major competitors. This is also supported by the findings of Hanssens and Johannson (1991), who state that Japanese firms pattern their overseas strategies on their Japanese competitors. It is a little surprising to find that Japanese companies have a planning horizon as short as US or German companies. Maybe they are adjusting to the volatile and rapidly changing environment in the US, and do not see the advantages of long term planning.

Next, the strategic choice of companies from the three countries was analyzed. Table 3 reports the findings. Only product design, price differentiation, backward integration and forward integration were statistically significant. Although other items were not statistically significant, there are differences among firms from the three countries signifying that they attach different levels of importance to them.

Except for cost reduction, and Superior quality and reliability, the Japanese are consistently higher than both the US and German companies. This is not very surprising, and it is consistent with the findings of earlier studies. American companies seem to be getting more cost conscious and are putting more emphasis on reducing cost than their Japanese and German counterparts. Japanese companies still put more emphasis on R&D, product differentiation. product design, product variation and process development than their US and German counterparts.

Table 2 shows the mean response of American, Japanese and German companies on the issue of strategic objectives. Consistent with the findings of previous studies, Japanese companies in this sample have less of a short- term profit goal than their German and American counterparts. However, they do have a goal that is more longterm oriented towards increasing market share. Finally, LIS companies seem to have a goal that is more oriented toward beating competition than their German or Japanese counterpart.