CUTTING AGAINST-THE-GRAIN - A CASE-STUDY OF MACMILLAN-BLOEDEL JAPAN STRATEGY

For many Western corporations, Japan poses formidable barriers to expo rt and investment. Although trade policy confrontations with Japan hav e been scrutinized, the strategies pursued by Western corporations in attempting to penetrate the Japanese economy remain poorly understood. This paper addresses this lacuna via a corporate case study. Conceptu ally, we provide an alternative to the established theory of the inter national firm, outlining a model that integrates the related concepts of spatial entry advantages-spatial entry barriers, learning-bargainin g processes, and control-efficiency considerations. We explore the mod el empirically by examining MacMillan Bloedel's (MB's) strategy of exp ort (and investment) diversification toward Japan. The data come mainl y from unstructured interviews with representatives inside and outside the firm. The analysis documents the extensive marketing initiatives undertaken by MB in pursuit of Japanese markets and the substantial ch anges required in its British Columbia-based production facilities. In the terms of the model presented, MB has invested to an unusual degre e (among forest product corporations) in understanding Japanese market s and in gaining bargaining leverage in order to exploit its entry adv antages effectively. More so than rival firms, which have relied on tr aditional ways of tapping into Japanese markets, MB has stressed the e fficiency benefits of having greater control within the Japanese distr ibution system.