Lessons for Companies and Countries
Hindsight is 20/20, and it is easy to weave a series of ad hoc decisions and coincidental events into a theory of grand strategies and master plans. It is also tempting to imitate the successful strategies of another, not realizing that those strategies succeeded under a particular set of circumstances that no longer hold. The East Asian computer industry flourished within a competitive environment that has already changed dramatically and will be very different in the future. The industry itself continues to change rapidly, with new technologies, new markets, and new industry structures developing as the network era arrives. Still, that does not mean that we cannot learn from the past. So before we look at the emerging network era and its implications, we look first at what durable lessons the PC era offers for companies competing in computers. Second, if there is an East Asian model, then what does it say for countries that would like to apply the model's lessons to their own situations? Finally, how do the interests of companies and countries interact, and what have been the impacts of globalization on national interests?
For companies, success can be measured in a number of ways. Profitability, return on investment, increase in shareholder value, growth, market share- all of these are indicators of a company's competitiveness. However, they are only byproducts of underlying competitiveness that is based on fundamental assets and capabilities.
In order to frame our discussion of company competitiveness, we return to the distinction presented in chapter 2 between two broad categories of activities in which companies compete: (1) the diminishing returns manufacturing business that includes PCs and most of the hardware associated with