Global value chains and the lost competitiveness of the Japanese watch industry: an applied business history of Seiko since 1990

Abstract

An applied business history approach offers particular insights into the lost competitiveness of the Japanese watch company Seiko and its causes. Although Seiko was the world's largest firm in the watch industry in the mid-1980s, the company experienced a huge decrease in sales during the next decade and became unable to compete effectively against Swiss watch companies that had repositioned themselves in luxury business. The focus on the evolution of global value chains (GVC) in the industry, which saw a shift from producer-driven GVC to buyer-driven GVC, highlights a major change in the 1990s. Seiko did not change its strategy despite this paradigm shift and has continued to run its foreign subsidiaries according to the producer-driven model.

Keywords::

• Japan
• MNC
• watch industry
• Seiko
• global value chains

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

^1. Fossil Inc., annual reports (www.fossilgroup.com, last accessed 10 December 2014).

^2.Ordonnance réglant l'utilisation du nom «Suisse» pour les montres du 23 décembre 1971, Berne: RS 232.119.

^3.Kaisha yoran, Tokyo: Nikkei shimbun, 1980–1995.

^4.Nihon keizai shimbun, 29 May 2001.

^5. “Abenomics” led to a high growth of stock prices at the Tokyo Stock Exchange and consequently triggered increases in luxury good consumption among individual investors who made some gains. Financial Times, 18 June 2013.

^6.http://www.omegawatches.com/stores (last accessed 20 September 2014).

Additional information

Notes on contributors

Pierre-Yves Donzé

Pierre-Yves Donzé is an Associate Professor and Hakubi scholar at Kyoto University. His research focuses on global business history, industry history, and technology transfer.