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2020 | Book

Rising Asia and American Hegemony Read chapter Read first chapter

Rising Asia and American Hegemony

Case of Competitive Firms from Japan, Korea, China and India

Authors: Prof. Paul Hong, Prof. Young Won Park

Publisher: Springer Singapore

Part of: Springer Professional "Wirtschaft+Technik" , Springer Professional "Technik" , Springer Professional "Wirtschaft"

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About this book

This book provides an overview of evolving patterns of trade partnership with historical perspective. It presents changing requirements of industry competitiveness and explains the vital relationships between trade partnerships and industry competitiveness. As well, it further examines the interactive relationships between trade partnerships and industry competitiveness.

In recent years, with decreasing strategic alliances among nations and less visibility of international governance mechanisms (e.g., WTO) and counter to globalization, preferential trade agreements and free-trade agreements have proliferated among nations. At the same time, industrial competitiveness is becoming a serious strategic policy priority of nations—both advanced and emerging economies.

Theoretical discussion focuses on the practices of global network capabilities for the top of the pyramid (ToP) and base of the pyramid (BoP). Special focus is on trade partnerships and industry competitiveness in the Asian economies (China, Japan, South Korea, India, Indonesia), three ASEAN nations (Vietnam, Thailand, and Malaysia), and Mexico. Extensive industry and firm-level case studies discuss ToP and BoP interface capabilities in the form of manufacturing and services life-cycle management, which extends value creation and delivery of manufacturing and services. This extension integrates the cloud ecosystem, such as timely data/information/knowledge flows via the virtual world; and ground value chains, such as the flow of complex real goods and services in the visible world.

Table of Contents

Frontmatter

Liberal International Order, Global Trade and Industry Competitiveness

Frontmatter
Chapter 1. Rising Asia and American Hegemony
Abstract
This chapter defines liberal international order (LIO) in terms of three crucial elements: liberal with free and independent nations, international with effective flows of capital and goods through international markets, and order with shared governance rules in pursuing national interests. It also discusses how America’s transition from absolute advantage to relative advantage impacted the nature of international order after 1991.
Paul Hong, Young Won Park
Chapter 2. Liberal International Order and Global Trade Growth
Abstract
The relationship between liberal international order and global trade has evolved over the years. International trade sectors that emerged in both the 19th and the 20th centuries reflect the interest of the hegemony. The agreements that lowered tariff barriers between nations established global orders that contain strong mercantilist and protectionist practices. Even so, the international order after World War II have been much more liberal than is usually assumed and provided the basis of expanding global trade in 20th century. Although the rise of Asian nations, Japan and China in particular, has contributed to the growth of the global trade, they have not yet made real drastic changes in liberal international order. It is to be seen how Japan’s initiatives of TPP renewal and Chinese OBOR efforts play out in establishing new international order that defines the patterns of global trade.
Paul Hong, Young Won Park
Chapter 3. Rising Asia: Case of Japan, South Korea, China and India
Abstract
This chapter examines Rising Asia. Special focus is on the economic growth of four countries: Japan, South Korea, China and India. The cases of high growth economies (e.g., Japan, South Korea, China and India) suggest unique patterns of growth, challenges and transitions. Economic growth movement in Asia assumes unified efforts of domestic capabilities and international liberal order for expansion beyond national boundaries. Government mandated investment plans work well during this early period of growth up to $10,000 GDP per capital economy. As economy moves into mid- or advanced level, innovation in every level becomes increasingly important. Necessary conditions include free flows of information, private property, free movements, and demographic support. First level of rapid economic growth is attainable through disciplined execution of controlled economy. The next level into advanced maturity stage involves the transformation of liberal economic governance rules. Naturally, advanced level of sustainable growth requires national system that is conducive to international liberal order.
Paul Hong, Young Won Park
Chapter 4. Growing Rivalry: China’s Rise and American Hegemony
Abstract
China has been growing for more than 30 straight years. From 1990s, there has been consistent predictions about China’s rise and America’s decline in mainstream researchers. This is based on extrapolation of China’s 30+ years of growth records. However, as the trade tension between US and China intensifies, a new stream of research suggests that such may not necessarily be the case. Since China’s population is about four times of the US, one may argue that China needs another 100 years to exceed the current level of U.S. standards of living. Discussions include the background of American Hegemony and China’s Rise and their impact on liberal international order.
Paul Hong, Young Won Park

ToP and BoP Interface Capabilities (TBIC): Cases for Competitiveness

Frontmatter
Chapter 5. Evolution of Business Models
Abstract
This chapter discusses changing requirements of industry competitiveness in terms of five flows: (1) Productivity; (2) Quality Excellence; (3) Value Chain Capabilities; (4) Ecosystem Sustainability; (5) BoP and ToP Interface Capabilities. Each of these flows is explained, with their primary characteristics and associated strategic priorities described.
Paul Hong, Young Won Park
Chapter 6. Network Capabilities: National Innovation Ecosystem
Abstract
This chapter defines issues related to potentially problematic mismatches between evolving patterns of trade partnerships and changing requirements of industry competitiveness. This chapter summarizes the theory of network capabilities. Two previous books (i.e., Park and Hong in Building network capabilities in turbulent competitive environments: Practices of global firms from Korea and Japan. CRC Press, Boca Raton, 2012; Hong and Park in Building network capabilities in turbulent competitive environments: Business success stories from the BRICs. CRC Press, Boca Raton, 2014) examined the theory and practices of network capabilities of global firms from Korea, Japan and BRICs. In this book the new framework of ToP and BoP Interface Capabilities (TBIC) are presented along with the concept of technology, customer, and linkage competence.
Paul Hong, Young Won Park
Chapter 7. Chinese Global Firms: Challenges and Opportunities
Abstract
The rise of Chinese global firms has been quite noticeable since 2000. This chapter examines challenges and opportunities of Chinese global firms. Since 2000s, there has been a significant increase of Chinese firms listed in Global Fortune 500. Amongst major nations, China’s growth speed is most prominent. This chapter examines the strategic process of rapid catch-up and global competitiveness and provides illustrations of Chinese global firms for illustrations. Challenges and opportunities of Chinese global firms are also discussed.
Paul Hong, Young Won Park
Chapter 8. The Self-contained Localization Strategy: Case studies of Japanese firms
Abstract:
A huge number of middle-income groups are distributed in China and the Association of South East Asian Nations (ASEAN). In this context, global firms recognize the need for localization strategy. The practical upcoming challenge of global companies is to determine the best way to accomplish localization. This chapter presents the development of a self-contained localization system based on organizational capabilities and suggests the self-contained localization strategy through case studies of Japanese firms. The foreign subsidiaries with self-contained units have their own R&D, operations, marketing, service, and human resource functions. Therefore, the self-contained localization strategy allows the foreign subsidiary a large degree of autonomy in responding appropriately to local competitive conditions with locally responsive strategies. For Japanese firms that implement self-contained localization strategy, they allow a larger degree of autonomy and achieve a higher global market share of their products.
Paul Hong, Young Won Park
Chapter 9. Changing Industry Competitiveness: Case of Asian Automotive Firms
Abstract
This chapter uses the paradigm of SCP (structure, conduct, performance). We introduce important structural contexts (e.g., demographic patterns, economic growth and middle class size), automotive industry-specific characteristics (e.g., innovation-based and growth-oriented practices) and discuss the performance of automotive industry (e.g., competitiveness, sales and market share). Global firms from four Asian countries show distinct patterns of growth and expansion to emerging markets based on strategies for domestic advantage, global competitiveness, and global prominence. This review is useful in analyzing and evaluating their competitive performance in emerging markets and predicting their future moves focusing. Case illustrations primary focus on automotive market strategies of global firms from four major Asian economies (i.e., Japan, South Korea, China, and India).
Paul Hong, Young Won Park
Chapter 10. The United States-Mexico-Canada Agreement (USMCA) and Japanese Firms
Abstract
Building production networks is important for expanding value chains and achieve “locational interdependence” between advanced (e.g., USA) and emerging (e.g., Mexico) economies to achieve “location-specific advantages” within North American market region (Suder et al. in J World Bus 50(3):406–416, 2015). Internationalization decisions aims to achieve “institutional diversity and international dispersion” for regional market integration (Arregle et al. in J World Bus 53(6):896–910, 2018). In this aspect, regional free trade agreement such as NAFTA support the goals of business decisions for internationalization. Recently, U.S.-Mexican tensions remain high with Trump’s proposed building of border wall and Peña Nieto’s cancellation of a trip to Washington. In this fluid trade partnership context, this chapter examines how NAFTA talks affect global firms in MEXICO in general and those of Japan in particular. Japanese and Korean firms maintain their operations both in USA and in Mexico. Impacts of changes in NAFTA and other free trade agreements are discussed.
Paul Hong, Young Won Park

ToP and BoP Interface Capabilities (TBIC): Network Interactions

Frontmatter
Chapter 11. BREXIT: Case of Japanese Firms
Abstract
Europe’s long-term sluggish growth is structural. Traditional fiscal policy options are limited and the prospects for healthy level of growth are becoming more unattainable, especially in the context of Brexit and increasing fragmentation pressure on international order. The prospect of Brexit, with enormous political uncertainty, has a serious impact on UK’s economy in multiple fronts (e.g., immigration, financial regulations and flows of goods and services) and strategic practices of global firms.
Paul Hong, Young Won Park
Chapter 12. Free Trade Agreements (FTAs) and Korean Firms
Abstract
Firms increasingly utilize global supply chain (GSC) management to expand their resource base and integrate diverse network capabilities in global markets. According to Kawai and Wignaraja (J Asian Econ 22(12):105–128, 2011), many Asian nations vigorously pursue “global free trade agreements” (FTAs) with advanced nations (e.g., USA and Europe). In view of increasing demands and requirements, Asian nations pursue FTAs within their regions at large such as China-Japan-Korea FTA, ASEAN + 1 FTAs, and extend to Australia, India, and New Zealand, UK (2019) and Israel (2019). In this way, FTAs between countries or regional blocs provide added competitive advantages to global firms. This chapter explains the relationships (1) between FTAs and GSC strategies (2) supply chain costs and business impact results. Case illustrations highlight how Korean firms apply the potential benefits of multi-FTAs for achieving their GSC management strategic priorities and goals.
Paul Hong, Young Won Park
Chapter 13. Competitiveness of Korean Small and Medium Enterprise (SMEs) in ASEAN Region
Abstract
This chapter identifies competitiveness of Korean Small and Medium Enterprises (SMEs) in ASEAN Region. Emerging markets invite opportunities and challenges for both global local small and medium enterprises (SMEs). Particularly, the rapid growth in the Southeast Asian countries including India, Thailand, Vietnam, Malaysia and Indonesia, requires effective innovation strategy. The nature of these emerging Southeast Asian markets is somewhat different from the other markets in North America, Europe and North East Asia. Emerging markets in southeastern countries deserve adequate research attention. We summarize the globalization trend of Korean SMEs through case study.
Paul Hong, Young Won Park
Chapter 14. Supply Chain Integration in China: Case Study
Abstract
This chapter examines the strategic and operational issues related to supply chain configurations between set-makers and back-end suppliers in China. The case studies examine supply chain practices through low cost module (LCM) and demand chain management (DCM) strategy, which includes the movement of production facilities in China, integration of upstream and downstream suppliers, and vigorous distribution network building. The case study suggests that these firms respond to the growing domestic demand in China while it addresses the competitive challenges in global markets outside of China with their supply and demand network capabilities. This chapter also shows how Korean global firms in China address customs and border crossing issues between suppliers and hosting countries.
Paul Hong, Young Won Park
Chapter 15. TBIC (ToP and BoP Interfaces Capabilities): Case for SMEs
Abstract
How can individuals and firms seek a new source of radical innovation? Necessity is a mother of invention. In a sense, the bottom of the pyramid (BOP) markets provide huge opportunities for “creating awareness, access, affordability, and availability” of products and services. Innovation outcomes achieved in BoP markets may turn out to be “dramatic changes in value, use of hybrid technologies, lean management, market development, deskilling of work, collaboration with NGOs and the public sector, and distribution and logistics in hostile conditions” (Prahalad in J Prod Innov Manag 29(1):6–12, 2012). This chapter discusses the importance of TBIC (ToP and BoP Interfaces Capabilities) in SMEs. It is crucial to manage interfaces between Top of Pyramid (ToP) and Base of Pyramid (BoP) for the global competitiveness for individual firms. This chapter discusses how small and medium enterprises (SMEs) expand their market scope in emerging economies. Through the case of Ace Technology, we will look at TBIC (ToP and BoP Interfaces Capabilities) in SMEs, and look for strategic issues to be solved for future growth and future directions.
Paul Hong, Young Won Park
Chapter 16. Beyond Rising Asia and American Hegemony: Prospect
Abstract
This chapter discusses the future prospect of trade partnerships and industry competitiveness in global markets. In addition to the summary of the book, the final chapter presents lessons and implications—both theoretical and managerial. It also provides a roadmap for future research related to TBIC (ToP and BoP Interfaces Capabilities) and manufacturing service lifecycle management (IMSLM) that that integrate cloud ecosystem (e.g., timely data/information/knowledge flows via virtual world) and ground value chains (e.g., complex real goods and services flow in the visible world). We end by placing future research issues rising Asia and American hegemony in a new light. A rising Asia is causing the international order to evolve and adapt while American hegemony will operate in the world governed by a new type of capitalism. These changing dynamics of global order requires firms to pay attention to their linkage roles of creating, delivering and capturing value beyond their direct customer base. Huge technology changes (e.g., AI, block chains, 5G, IoT) provide both challenges and opportunities for future world of work and entrepreneurial innovation.
Paul Hong, Young Won Park
Metadata
Title
Rising Asia and American Hegemony
Authors
Prof. Paul Hong
Prof. Young Won Park
Copyright Year
2020
Publisher
Springer Singapore
Electronic ISBN
978-981-13-7635-1
Print ISBN
978-981-13-7634-4
DOI
https://doi.org/10.1007/978-981-13-7635-1