In Japan, restructuring has taken a different form: internal diversification at home combined with wholly owned direct foreign investment overseas. This strategy is reminiscent of the U.S. MNC's conglomeration fever of the sixties. Japanese firms are leveraging their core skills to branch out into wholly new businesses. Consider these cases.
Suntory Ltd. had been known for decades as the top whisky distiller in Japan. Faced with slowing growth, the firm opened a biomedical research institute six years ago. Now it is the leading biotechnology firm in Japan and is licensing its technology for producing gamma interferon, a promising anticancer drug, to the U.S. pharmaceutical company Schering-Plough Corporation.
Kawasaki Steel Corporation and Nippon Steel Corporation are among several Japanese mills moving into the production of silicon wafers, using licensed technology.
Nippon Gakki Company, whose Yamaha brands have made it the world's largest producer of musical instruments, is today one of Japan's premier makers of integrated circuits, all developed on its own.
Minebea, a miniature-bearing and precision-parts maker, has launched its own semiconductor memory business. Kao Corporation, Japan's largest detergent maker, is starting to make floppy disks for computer memories. About ten years ago, as part of its long-term research into surface reactive agents, Kao put a small team to work experimenting with magnetic powder, the key component of floppy disks. 1
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