Japanese automakers thrive with diverse suppliers, outperforming rivals in industry.
Japanese automobile manufacturers benefit from a strategy that involves spreading out their component sourcing and sharing suppliers. This approach, known as the quasi-market strategy, helps these firms perform better than others. Contrary to popular belief, having a wide range of suppliers and close relationships with them can be advantageous for these manufacturers. This study suggests that a few leading Japanese automobile companies have the management skills to make the most of this approach.