When we look at the history of consumer electronics, it has witnessed periods of domination from different geographies. First it was american and european. then it was followed by the japanese era. after a disastrous devastation in world war 2, the latter years of the past century were memorable for the land of the rising sun. just as in the automotive industry, the made in japan brand name stood for excellence and nothing less in the consumer electronics sector. but the korean wave was devastating, and took the japanese quite by surprise, particularly in the indian market. even as brands like samsung and lg strengthen their leadership positions in the country, a new chinese wave is gaining ground, which has compelled the koreans to move towards more premium positioning (blue ocean strategy). however, in the midst of these developments, we could witness a blast from the past, for the japanese are back! And this time, they are looking for the volume game, based on aggressive pricing. but can they win in a mode of warfare that is not their trademark strength? Neha Saraiya of 4Ps B&M takes a closer look...
 
The samurai class of warriors took shape in Japan after the Taika reforms of 646 A.D., which also enforced military service on one in every four Japanese adults. And the Japanese people have imbibed and retained much of their fighting spirit as well as their preference for honour above everything else till today.

So it’s not at all surprising that Japanese products matched, and even bettered the world class technology standards of the day in the 1970s and 80s. Even in the Indian market, Japanese companies like Sony and Suzuki had the brand power and presence to conquer the market long before the Koreans even planned an entry.

While Suzuki took the plunge early, brands like Sony and Panasonic were apparently not too optimistic about the Indian market even till the early 1990s. Without volumes and with myriad challenges of penetration, purchasing power and logistics, India was not a priority market. But Korean brands LG and Samsung came, saw and conquered, since they were far more optimistic of the market, and willing to get their boots dirty. That’s why they dominate the Indian consumer electronics market today; a market estimated to be worth around `32,000 crore.

To begin with, the Korean brands came to India after the government embraced liberalisation , which made setting up their operations relatively easier and less frustrating. By the time LG knocked for the third time on Indian doors, the government had made the amendment that would allow a foreign player to set up a 100% subsidiary in the country.

Secondly, home grown brands like Videocon, BPL and Onida were already facing internal glitches. This created a largely vacant place in the market as the Indian brands were not geared up to offer products with the changing times. For instance, the refrigerators sold by Godrej in the 1980s were also quite similar to the models sold by the company in the 1990s.

Thirdly the Japanese companies paid little or almost no attention to advertising, after sales services and distribution, which proved to be one of the key reasons for their failure. Toshiba, for instance, has operated in the laptops space in an association with HCL since the mid-1990s, but had just one liaison office in India till 2001. They have also retained precious few service centres in the country.

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Source : IIPM Editorial, 2011.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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10/08/2011 12:12am

Japan is also the mobile society’s social pioneer. The country created the wireless-data business model with NTT DoCoMo’s iMode service in 2000. Back then, Europeans were preoccupied with wireless-license auctions, Americans lugged around mobiles the size of bricks and Africa was not yet on the grid.
Today, around 25% of Japanese access the internet only from their mobiles. Operators’ revenue tops $90 billion a year. Many customers upgrade their phone every year; last year almost 50m new mobiles were sold. The market is saturated, with 100m subscribers in a country of 130m.
Despite this apparent success, Japan is actually losing the global mobile-phone market. Among the top seven manufacturers, only one is Japanese—Sony Ericsson, at fourth place (and that’s a joint venture with a Swedish firm).

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10/08/2011 1:15am

Japanese mobile makers face other difficulties as well. Their excellence in hardware is not matched in software and usability, areas in which North American firms excel (think of gadgets like Apple’s iPhone and RIM’s BlackBerry). And the West’s “smart phones” tend to have small keyboards, while Japanese kanji characters require just a numberpad. So for cultural reasons, Japanese makers are at a disadvantage when selling to Western markets.

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10/08/2011 1:21am

“We are no longer pussy cats, but hungry tigers,” Ito avers, with a roar, his towering personality almost dwarfing his swank cabin in Panasonic India’s premises at Gurgaon. For those who came in late, Panasonic was one of the first consumer durable companies to have spotted the India opportunity way back in the 90s, much before LG and Samsung soared into the limelight. In Ito’s own words, when he was sent by Chairman Nakamura to take charge of Panasonic’s India operations 18 months ago, he was “shocked” to see Panasonic languishing near the bottom, at 16th position in brand awareness among all its rivals. “In most other Asian countries, we are at the number 1 or 2 positions competing with either Sony or Samsung,” he laments.

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