Raw Materials Procurement Strategy: The Differential Advantage in the Success of Japanese Steel

Mohan, Krishna; Berkowitz, Marvin W.

doi:10.1111/j.1745-493x.1988.tb00200.x

Cited by 12 publications

(6 citation statements)

References 11 publications

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“…One possibility is that coordination among the integrated mills was more concerted in terms of efficiency. For example, the integrated mills were able to institute coordinated procurement of raw materials by acting as a single customer in international markets (Mohan and Berkowitz, 1988). Such coordinated actions may have resulted in quick responses to any change by a single member, or the changes were almost simultaneous.…”

Section: Nonstationary Strategiesmentioning

confidence: 99%

Cointegration of firm strategies within groups: a long‐run analysis of firm behavior in the Japanese steel industry

Nair

Filer

2002

Strategic Management Journal

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This paper uses cointegration analysis to study the competitive interaction among firms within the integrated and minimill groups in the Japanese steel industry. The use of cointegration analysis overcomes some of the limitations associated with prior attempts at modeling firm behavior within groups, and allows us to model strategies that take considerable time to adjust. Results indicate that several strategies displayed slow adjustment characteristics. All of the strategies that displayed these properties were cointegrated within the group. Finally, over the long run, the rate of strategic response to 'shocks' in the system varied across members and strategies: some converged, while others diverged from the group relationship. We conclude by discussing the relevance of our findings to research on strategic groups and competitive dynamics among firms. Thus the paper contributes to the literature on strategic groups and competitive dynamics, and illustrates the use of cointegration analyses to study the competitive behavior of firms.

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Section: Nonstationary Strategiesmentioning

confidence: 99%

Cointegration of firm strategies within groups: a long‐run analysis of firm behavior in the Japanese steel industry

Nair

Filer

2002

Strategic Management Journal

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“…J., 22: 221-235 (2001) input raw materials, while the minimills use ferrous scrap, and the differences in the number and size of firms in the two groups (mentioned earlier) have resulted in differences in bargaining power that the two group members have with their suppliers. For example, the integrated mills were able to institute coordinated procurement of raw materials by acting as a single customer in international markets (Mohan and Berkowitz, 1988). In contrast, the market for ferrous scrap, the key input for the minimills, is highly volatile because of the large number of EAF furnaces (carbon and special steel), and fluctuations in supply.…”

Section: Performance In the Jsimentioning

confidence: 99%

Does group membership matter? Evidence from the Japanese steel industry

Nair

Kotha

2001

Strategic Management Journal

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In this study we address criticism that performance differences among strategic groups found in past research may be spurious and attributable to firm effects. The Japanese steel industry provides the setting for the study. Our analysis is based on data from the carbon steel sector of the Japanese steel industry for the periods 1980-87 and 1988-93. A one-way ANOVA indicated that the average performance of firms in the two technology-based groups in this industry-the integrated mills and the minimills-were significantly different during the two periods. Subsequently, we performed a regression analysis to examine the residual group effect after controlling for both environment and firm-specific effects. We found that even after controlling for both environment and firm-specific effects group membership was significantly associated with firm performance.

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“…These include the prices of labor, material, energy, and land, as well as the costs of input processing. Mohan and Berkowitz (1988) noted that raw materials alone account for 60 to 70 percent of the production costs for a steel manufacturer. Because purchased inputs are such a large portion of total product cost, the make-or-buy decisions are often based on production cost considerations (Welch and Nayak 1992).…”

Section: Discussionmentioning

confidence: 99%

The Use of Intermediate Sourcing Strategies

Heriot

Kulkarni

2001

J Supply Chain Manag

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SUMMARY Much of the existing literature discusses vertical integration and competitive spot bidding as sourcing strategy choices, but often neglects intermediate sourcing strategies, such as taper integration and long‐term supplier relationships. This exploratory study examines the extent to which firms use intermediate sourcing strategies, as opposed to the polar strategies, and attempts to improve our understanding of the sourcing choices available to manufacturing firms. Results from a sample of 209 plant managers indicate that firms use taper integration and long‐term supplier relationships more frequently than vertical integration and competitive spot bidding. Further, the choice of a sourcing strategy was found to be dependent on the industry.

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Raw Materials Procurement Strategy: The Differential Advantage in the Success of Japanese Steel

Cited by 12 publications

References 11 publications

Cointegration of firm strategies within groups: a long‐run analysis of firm behavior in the Japanese steel industry

Cointegration of firm strategies within groups: a long‐run analysis of firm behavior in the Japanese steel industry

Does group membership matter? Evidence from the Japanese steel industry

The Use of Intermediate Sourcing Strategies

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