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Handbook of Research on Asian Business

Edited by Henry Wai-chung Yeung

The rise of Asia as an important region for global business has been widely recognized as one of the most significant economic phenomena in the new millennium. This accessible and comprehensive Handbook brings together state-of-the-art reviews of Asian business in an expansive range of areas including: business organizations; strategic management; marketing; state–business relations; business and development; and business policy issues.
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Chapter 11: Global Retailers and Asian Manufacturers

Gary G. Hamilton and Misha Petrovic


Gary G. Hamilton and Misha Petrovic The principal thesis of this chapter is that the single most important driver of Asia’s economic growth has been, and continues to be, the symbiotic relationship between large American and European retailers and brand name merchandisers, on the one hand, and Asian manufacturers, on the other hand.1 In the past 40 years, East Asian countries have become the world’s chief site for sourcing manufactured consumer goods. The most important firms that source goods from Asia are the large retailers and brand-name merchandisers. At first, many of these were American firms, but, since the 1980s, European retailers and merchandisers have also increasingly sourced goods from Asian manufacturers. As these American and European retail firms have become larger, more globally oriented and more competitive with each other, they have increasingly come to rely on Asian manufacturing to supply them with high-quality, but relatively inexpensive, goods. Beginning in the late 1970s, Asian firms, although remaining very competitive with each other, gradually worked out a division of labour, so that some economies in the region developed large vertically integrated conglomerates specializing in producing finished products, and other economies developed extensive inter-firm networks specializing in producing small to large batches of goods designed for niche markets. In the 1990s, responding to difficult market conditions, many of the leading manufacturers from throughout the region (namely, from Taiwan, Hong Kong, South Korea and Japan) began to relocate some of their factories to China, leading to extraordinarily rapid growth in...

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