The above diagram explains the flow of various categories of goods. Towards the top of the diagram the goods are increasingly "tangible", while those towards the bottom are increasingly "intangible". From left to right, the chart shows how goods flow from their origin to their destination. Japanese products have performed well based on their high-quality, which is important in the area on the right of the diagram, were products reach end-users. However, emerging economies are gradually entering this field.
However, whichever row of the diagram you look at, you can see that the dominant players have rights over all stages from the origin of the goods, on the left, through to the distribution network. Major players in the cereals, water, and petroleum industries, are all controled by capital from the major economies that were first to industrialize. In any field, taking such a controlling position gives these companies the ability to control the market and information flow. Many people expected that the development of the Internet would change the situation, but instead the giants that have emerged, such as Google and Facebook, are from the US.
These major companies represent the post-war order established by the victorious countries, and there are partitions between such major players and other challengers. Even though Germany has become the leading nation in the EU, German companies find it difficult to achieve such dominant status. It will be difficult to break down these structures.
In the meantime, companies emerging economies will be trying to attack from the end user side. What should Japanese companies do? The answer is simple. They should make small encroachments into the distribution network and nodal areas. While they cannot immediately try to control infrastructure, Japanese companies have a chance to succeed by establishing real networks close to the consumer.
In fact, Japanese-style network services, such as parcel delivery services and convenience stores, are already beginning to spread globally. The efforts by Yakult delivery ladies to provide a crime prevention service warning against suspicious people, and of Secom to expand their service to include gardening services and care-giving for the elderly, represent attempts to build networks that harness the unique Japanese spirit of service.
In actual neighborhoods, where people are close enough to hear each other's voices, providing finelytailored services can produce value. These are the kind of areas where Japan needs to expand networks based on the user products where Japanese companies have traditionally been strong. It's not easy for Japanese companies to become dominant players, but various possibilities will open up if companies can begin to gain a firm footing in customer-centered networks.