What Is Meant by the Term 'Keiretsu'? Why Is the Concept

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The Answer is Keiretsu is a term used to describe a form of business organization in Japan where a group of companies, often with interlocking ownership and business relationships, work together for mutual benefit. These relationships can include cross-shareholding, joint ventures, and long-term partnerships.

The concept of keiretsu is important to firms interested in penetrating the Japanese market because it provides a framework for understanding the business landscape in Japan. By forming relationships with existing keiretsu members, foreign firms can gain access to distribution channels, suppliers, and potential business partners. This can be crucial for navigating the complex and often insular Japanese market, where trust and long-term relationships are highly valued.

Additionally, being part of a keiretsu can provide a level of stability and support for foreign firms entering the Japanese market. By aligning with established companies and leveraging their networks, foreign firms can benefit from the reputation and resources of the keiretsu members, which can help them gain credibility and market share in Japan.

Overall, the concept of keiretsu is important for firms interested in penetrating the Japanese market because it offers a strategic framework for building relationships and accessing resources that can be essential for success in this unique business environment.

What Is Meant by the Term 'Keiretsu'? Why Is the Concept

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