Sharp Corporation - Beyond Japan: Case Study Essay

1944 Words Dec 26th, 2013 8 Pages
Executive Summary:

Faced with major losses from operations, Sharp Corporation’s president, Mikio Katayama, questioned the whether it was necessary to reform the current business operating model. Sharp’s current operating model contained several flaws. It placed sensitive, high-value-added operations such as research, development, and component manufacturing near its headquarters in Japan. Faced with threats such as intense industry competition, currency risks, very high transportation and utility costs, and extremely high infrastructure costs and high corporate tax rates, Sharp Corporation needs resources in the forms of new methods, technology, and approaches to doing business in the modern world. It is recommended that the company
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Japanese markets have become centers of high-value-added-knowledge, meanwhile other productions plants overseas mainly focus on assembly. This is a weakness in Sharp’s operating model because there are many advantages to outsourcing research and development. There are large financial gains associated with outsourcing because salaries in foreign countries can be considerably lower than in the home country. In addition, the materials and actual cost of location for the research center can be less expensive offshore, and companies can build strategic research alliances with foreign companies (Dubovskiy, 2012).
Without a doubt, the largest threat to Sharp Corporation is the intense industry competition that it faces from companies such as Apple, Toshiba, and Sony. The availably of cheaper, more advanced, and more easily accessible alternative products from these manufacturers is damaging to Sharp’s product sales.

Other threats that Sharp is faced with include currency risks, very high transportations and utility costs, and extremely high infrastructure costs and high taxes when producing in Japan (Lehmburg, 2012). The company was spending Japanese Yen to produce products that were shipped abroad and sold in numerous local currencies, generating a currency risk, questionable price stability, as well as questionable business stability and prosperity. Sharp Corporation saw this threat come to life in 2008, when

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