1. Home
  2. News Releases
  3. Back Issues
  4. June FY2024
  5. Report by Study Group on CX for Strengthening Global Competitiveness Released

Report by Study Group on CX for Strengthening Global Competitiveness Released

- Corporate Transformation Required in the Era of Global Competition -

June 3, 2024

As an effort to encourage Japanese companies, mainly those in the manufacturing industry, to further strengthen global competitiveness, the Ministry of Economy, Trade and Industry (METI) launched the Study Group on Corporate Transformation (CX) for Strengthening Global Competitiveness in December 2023 and started discussions with the experts of management strategy and Chief x Officers (CxOs) who are carrying out transformation of their own companies as a practical matter. The Study Group has analyzed the current situation faced by Japanese companies expanding their business globally to identify challenges therein and find specific measures. METI hereby announces that it compiled the discussion results into a report.

  1. Purpose

Over the past around 15 years, the globalization of Japanese companies, mainly those in the manufacturing industry, has expanded their business rapidly. As a result, while the profits of such companies have reached record highs, the profitability, however, remain lagging behind those of U.S. and European companies. One of the largest factors of Japanese companies’ lower profitability may be caused by the conventional, Japan-centric management that may no longer work for such companies with expanding business frontier.
With an awareness of this problem, METI launched the Study Group on CX for Strengthening Global Competitiveness in December 2023.

The study group focused on ideal approaches that corporate core functions should take to succeed in global competition, and from this viewpoint, jointly with experts of management strategy and CxOs who are carrying out transformation of their own companies as a practical matter, it held discussions on how to “CX (Corporate Transformation)”, i.e., ideal approaches to optimization for the core functions in a global company such as finance, human resources (HR), digital transformation, and organization architecture for global management.

2. Highlights of the report

Focusing on the question of why CX is necessary for strengthening the global competitiveness of Japanese companies, the report shows the results of a quantitative analysis of the activities of Japanese companies, mainly those in the manufacturing industry, over the past around 20 years and also raises issues in a well-organized manner based on the results of various literature surveys and interviews with companies.

Moreover, regarding the question of how Japanese companies should achieve CX, the report shows ideal approaches that companies should take to achieve three core functions in a well-organized manner, namely the finance function, HR function, and DX function that work to distribute timely and optimally the management resources of personnel, goods, money, and data. These should be based on company’s purposes and core values as the core of the organizational design philosophy, which serve as the driving force for transforming the conventional operating systems that most Japanese companies have adopted over the past decades. These functions have converged into certain models against the backdrop of Western companies, which have been ahead of Japan in developing global business, engaging in trial-and-error processes involving these functions. This report is intended to serve as a guide for Japanese companies which will help them to consider approaches to operating as global organizations which encourage their overseas subsidiaries to work together and manage their corporate group like a virtual organization while also taking advantage of the good aspects of the conventional approaches that the companies have taken.

One point that the readers should keep in mind is that not all of Japanese companies necessarily need to work on an omni-directional CX. There are different stages of approaches that companies should take in entering the global market and not all of these approaches are always applicable to all companies in the manufacturing industry. The necessary measures will differ among companies, depending on the quality of the products and services that they provide as well as the competitive environment they are in. However, from the viewpoint of macro trends, the global trade volume is leveling off in relation to the growth of the global economy. In the context of semi-globalization, many Japanese companies are expected to face the challenge of how to control global business development while adapting to multinational business development as they increase their ratio of overseas sales.

METI expects that the report will attract the attention of management personnel and those who are in corporate departments and business departments who intend to or need to change their companies from a variety of standpoints and that it will help companies take on the challenge of CX to transform themselves.

3. Report

4. Links to references (in Japanese)

Division in Charge

Manufacturing Industries Strategy Office, Policy Planning and Coordination Division, Manufacturing Industries Bureau