GLOBALIZATION, ALLIANCES AND INNOVATION IN LARGE JAPANESE FIRMS - COMPETITIVE ADVANTAGES THROUGH ECONOMIES OF SCOPE

This paper analyses the process of creating and sustaining competitive ness used by large Japanese firms. The strategies used by these firms have been to use globalization and alliancing for strategic reposition ing. They have created intrinsic competitiveness through a series of m easures such as collaborative R&D, globalization of RED and horizontal innovation transfer. The internationalization of skills has been very quick, and because of this they are able to extend the core competenc e rapidly. The complementary use of strategic networking, globalizatio n and innovation, along with intrinsic competitiveness, help the Japan ese firms to respond to competition in an effective manner. Managerial visions, quick skill internalization, horizontal coordination and eco nomies of scope form the basis of creating and sustaining competitiven ess and these characterize the innovation system of the 1990s.