Please read this brief Case Study and Evaluate options. In your opinion, what are the ramifications of being heavily dependent on a specific trading partner such as Japan? What differences might apply if you are a heavy importer of goods versus a heavy exporter of goods to a single trading partner who runs into misfortune, as Japan did in this case?

Still Made in Japan

On March 11, 2011, Japan suffered from a triple disastera 9.0 earthquake (its worst in recorded history), a huge tsunami, and a nuclear power plant accident. From a global standpoint, a lot of non-Japanese firms that relied on Made-in-Japan products were ill prepared for such a sudden catastrophic event. Despite the widely noted migration of manufacturing jobs to low-cost countries such as China and Malaysia, Japan has remained an export powerhouse. In 2010, it was the worlds fourth-largest merchandise (goods) exporter (after China, Germany, and the United States), with US$765 billion exports. For example, Japan produces approximately one-fifth of the worlds semiconductors and 40% of electronic components. While low-end products tend to be made overseas, Japan has higher and higher market share of specialty materials as you go up the value chain, noted one expert. For example, Boeing outsourced 35% of the work on its newest 787 Dreamliner to Japanese manufacturers. Among them, Mitsubishi Heavy Industries built the 787s wings, and no one else in the world could do the jobBoeing had no plan B. On March 17, 2011, General Motors closed two US-based factories for a week, due to a lack of components arriving from Japan. For planes, cars, laptops, and phones assembled outside of Japan, the Made-in-Japan components may represent a relatively small amount, but they tend to be mission-critical. If the Japanese cannot supply, noted another expert, then no one is going to get their iPad because no smart factory can build an iPad with only 97% of parts.