International Expansion Strategy of Japanese Firms: Capability Building through Sequential Entry

Abstract

This study examined the sequential entry process of Japanese electronic manufacturing firms into the United States during the period 1976–1989. The firms first entered their core businesses and those in which they had a strong competitive advantage over local firms to reduce the hazard of failure. Learning from early entries enabled them to launch further entries into noncore businesses and into areas of weaker competitive advantage. The overall evidence suggests that Japanese firms are building capabilities to operate overseas through sequential entry.