SUCCEEDING IN THE ASIAN MARKET: OPPORTUNITIES AND CHALLENGES
FACING U.S. FIRMS IN THE WAKE OF THE ASIAN CRISIS
The Asian economic and financial crisis of 1997-1998 presents American international business firms with a unique set of opportunities and challenges. That crisis has lowered asset values and costs in many East Asian nations thereby presenting many attractive investment and operating opportunities while at the same time accelerating structural reforms which provide the basis for more dynamic internal growth, more open competition and transparency from which well positioned American firms can benefit. However, the Asian crisis has also intensified competition within Asian markets and is likely to generate more focused and stronger competitive rivals as well as the continuation of some trade and other barriers to the entry of American products and services. No single formula for American business success applies to the variegated markets of East Asia. The keys to success or failure are likely to be found in the ability of American firms to develop long term strategies to penetrate Asian markets and to sustain themselves there, to accommodate to the distinctive characteristics of the business and investment climate in each nation and to adapt their strategies and operations to a rapidly changing competitive environment. Special attention will need to be given to modulating the high political and other risks associated with doing business in certain areas especially hard hit by the Asian crisis, such as Indonesia, and the unpredictability of developments in mainland China.
Rapid Economic Growth in East Asia. From the 1960s and through the early 1990s, most nations in East Asia rapidly developed their economies. According to Thurow, Japan, largely because of its penetration of American export markets, which had a GNP of only 50 percent of U.S. GNP in 1970, had by 1991 become the world's largest creditor nation and s...