Topic_25_E2 - 90 percent of the top value creators receive...

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Topic 25, Exercise 2 Strategies in Asian Markets The traditional organizational form in Asia is large conglomerates as well as asset- intensive local industries. However the model that many of the most successful firms follow is radically different outside of Asia. A recent article entitled, “Winning Asian Strategies,” discusses different strategies and characteristics of some of the most successful firms in Asia. After reading this article, answer the following questions: 1. According to the authors, what sets apart the big, value-creating firms in the region? The largest value creators appear to expand quickly to capture global market opportunities. The top 10 firms in the sample earn over half of their revenues away from their home market. They also tend to atomize, that is, to pick a narrow market sliver and build scale rather than attempt to compete across ranges of sectors or industries. Over
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Unformatted text preview: 90 percent of the top value creators receive 80 percent of their revenue from a single, primary industry sector. Finally, they tend to carry less in assets. The largest value creators need only $1 in assets to generate $1 in revenue. The average Asian company carries $4 in assets to generate $1 in sales. 2. According to the authors, what will be the ultimate consequences if Asian firms do not change from the strategy of using asset-intensive conglomerates? The authors believe that the best run firms in Asia have switched from the traditional conglomerate model. Failure of the firms to adapt will make them less competitive to Western firms. These more efficient global firms will make it tough for traditional firms to compete....
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