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Are we all global now? Local vs. foreign sources of corporate competence: the case of the Japanese pharmaceutical industry

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  • L. G. Thomas

Abstract

This study links the highly distinctive national contexts of the pharmaceutical industry to the evolution of innovative capabilities for Japanese drug firms from 1975 to 1995. During these two decades, the Japanese domestic environment for pharmaceuticals changed radically, encouraging a ‘bubble’ of trivial innovations. Experience by Japanese firms in their domestic market predominantly determined their innovative capabilities, pushing these firms towards trivial innovation. Corporate experience in the socially ‘proximate’ markets of Southern Europe served as a strategic complement for significant innovation by Japanese drug firms, and thus as a partial counterweight to the home market. Unfortunately, corporate diversification was a strategic substitute for significant innovation, and many Japanese drug firms are significantly diversified. The resulting degradation of innovative capability for Japanese drug firms has locked most of them into an increasingly unattractive home market. Copyright © 2004 John Wiley & Sons, Ltd.

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  • L. G. Thomas, 2004. "Are we all global now? Local vs. foreign sources of corporate competence: the case of the Japanese pharmaceutical industry," Strategic Management Journal, Wiley Blackwell, vol. 25(8‐9), pages 865-886, August.
    • Handle: RePEc:bla:stratm:v:25:y:2004:i:8-9:p:865-886
    DOI: 10.1002/smj.420
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    Cited by:

    1. Bowen, H.P. & Wiersema, M., 2007. "International and product diversification: their interrelationship and impact on firm performance," Vlerick Leuven Gent Management School Working Paper Series 2007-6, Vlerick Leuven Gent Management School.
    2. Bowen, Harry P. & Baker, H. Kent & Powell, Gary E., 2015. "Globalization and diversification strategy: A managerial perspective," Scandinavian Journal of Management, Elsevier, vol. 31(1), pages 25-39.
    3. Herrmann, Andrea M., 2008. "On the discrepancies between macro and micro level identification of competitive strategies," MPIfG Discussion Paper 08/6, Max Planck Institute for the Study of Societies.
    4. Hsu, Sean Tsu-Hsiang & Iriyama, Akie & Prescott, John E., 2016. "Lost in Translation or Lost in Your Neighbor's Yard: The Moderating Role of Leverage and Protection Mechanisms for the MNC Subsidiary Technology Sourcing–Performance Relationship," Journal of International Management, Elsevier, vol. 22(1), pages 84-99.

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