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The US has fluctuated between conglomerates being in vogue and not. GE being one of the last surviving conglomerates and on it's way out. You can chalk this u

The US has fluctuated between conglomerates being in vogue and not. GE being one of the last surviving conglomerates and on it's way out. You can chalk this up to a variety of reasons including: tax policy, activist shareholders, etc. Many of the Japanese companies you mention don't have the same pressures to break up. This article talks a bit about the conglomerate break-ups of the 70s, which includes a great graph showing the rise and fall of such: article: https://www.cbinsights.com/research/disrupting-management-consulting/ https://www.cbinsights.com/research/disrupting-management-co... graph: https://s3.amazonaws.com/cbi-research-portal-uploads/2018/05/07145033/Conglomerate-chart_0-1.png https://s3.amazonaws.com/cbi-research-portal-uploads/2018/05...

avn2109 8y ago
Traditionally, American conglomerates flourish in high-interest-rate environments, such that the money emitted by profitable verticals can be used to subsidize growing/unprofitable verticals, all beneath a single centralized authority which overtly acknowledges its legal and financial control of the subsidiaries. Conversely, when money is cheap, you can just incorporate all your verticals as freestanding entities (aka "startups"), often beneath a decentralized control structure (aka "cabal of venture capitalists who collude with one another") through which you maintain influence over them without incurring any of the unpleasant legal ramifications caused by explicitly linking the verticals together in the eyes of the law. You can do this latter decentralization thing since you're freed from the frequent need to move money between verticals, and can instead just pump money into them (if necessary) every year or two (aka "funding rounds"). However, I have no clue how Asia works.
- Intermernet 8y ago
  Look up "Mitsubishi Group" on Wikipedia for some interesting insights into how "a decentralized control structure" works. I suspect that this sort of decentralisation is common not just in Japan, but throughout most large players in the global economy. The differences will mostly arise from how much the "home market" of any of these groups (cabals) will care for, or acknowledge antitrust practices. Other good examples are Unilever, Google, Apple, Freeport McMoran, Tata Group etc. Once you bring China into the equation it becomes more difficult to trace the global connections due to massive state ownership, but I'd be surprised if they didn’t have interests in many global conglomerates. This isn't really conspiracy theory, this is just how a global economy is evolving amidst multiple conflicting interests and regulatory bodies.
btilly 8y ago
There are other conglomerates. Berkshire Hathaway is an extremely good example. It includes a wide variety of companies that like to spin off cash, such as See's Chocolates, combined with a core insurance company that could need access to very large financial reserves. According to http://www.berkshirehathaway.com/letters/2017ltr.pdf http://www.berkshirehathaway.com/letters/2017ltr.pdf they are operating under the assumption that a $400 billion catastrophe has a 2%/year probability, and they are prepared to weather such an event. Another good example is Amazon. They are the humble bookstore that does everything from web hosting to delivering groceries.
toss1 8y ago
My understanding is that the Japanese conglomerates are different from US conglomerates. The US ones are largely siloed collections of companies across a spectrum of industries. The Japanese ones are strongly vertically integrated. I was told when I was sponsored by Yamaha for international ski racing competition and at one of their testing camps: 'we mine the ore, make the metal, make the machines that make the tools, make the tools, and then use the tools to make the products'. It's about both controlling the quality all the way up and down the value chain, and also capturing the value-add all the way up the chain (not sure how much of each). I was quite impressed by their quality and technology, which was the prime reason I went with them. At the time, they were one of only two companies worldwide that could make a pair of skiis that was actually indistinguishable left/right to racers at our level (the other was Fischer which dominated the Swiss, Austrian teams and we wouldn't get their best race stock), and Yamaha had amazing ability to tune the performance properties. I'm quite sure that they could do it because of their strong vertical engineering and QA integration. (Always seemed like a superior model to me, but I'm not a big biz guy, so what do I know?) Edit: typos,clarity
- brusch64 8y ago
  What kind of ski racing did you do ? I've never heard about Yamaha skis. But I am from Europe so in alpine skiing (FIS races) I just know the European brands (Rossignol, Fischer, Head, Atomic or even more obscure ones like Stöckli).
  - rjsw 8y ago
    The Olympic Men's Slalom in 1992 was won on Yamaha skis.
  - toss1 8y ago
    Same, FIS Alpine racing. Mostly Downhill for me, but raced all events. Mostly on the Europa Cup and NorAm circuits and a bit at WC level. I'm not sure if Yamaha is still active in racing, but they had some really amazing skis, and they tried out a lot of interesting ideas. One of my favorites was a triple-core construction where two of the cores were a high-energy elastomer pre-stretched in the mold to ~5x their original length. The idea of this pre-load was to have a moderately soft flex but return a lot of energy as the ski un-bent as you exited the turn -- and it worked like crazy -- the best pair of GS skiis I ever had! I also had a pair of 220s to try for DH; they were not fast probably because they had too much energy and vibration on the straights, but they were an absolute blast for hi-speed free-skiing -- just crazy spring out of the turns -- I was sad to have to turn them back in since they weren't going in my race bag. Fun times...

avn2109 8y ago

Traditionally, American conglomerates flourish in high-interest-rate environments, such that the money emitted by profitable verticals can be used to subsidize growing/unprofitable verticals, all beneath a single centralized authority which overtly acknowledges its legal and financial control of the subsidiaries. Conversely, when money is cheap, you can just incorporate all your verticals as freestanding entities (aka "startups"), often beneath a decentralized control structure (aka "cabal of venture capitalists who collude with one another") through which you maintain influence over them without incurring any of the unpleasant legal ramifications caused by explicitly linking the verticals together in the eyes of the law. You can do this latter decentralization thing since you're freed from the frequent need to move money between verticals, and can instead just pump money into them (if necessary) every year or two (aka "funding rounds"). However, I have no clue how Asia works.

Intermernet 8y ago
Look up "Mitsubishi Group" on Wikipedia for some interesting insights into how "a decentralized control structure" works. I suspect that this sort of decentralisation is common not just in Japan, but throughout most large players in the global economy. The differences will mostly arise from how much the "home market" of any of these groups (cabals) will care for, or acknowledge antitrust practices. Other good examples are Unilever, Google, Apple, Freeport McMoran, Tata Group etc. Once you bring China into the equation it becomes more difficult to trace the global connections due to massive state ownership, but I'd be surprised if they didn’t have interests in many global conglomerates. This isn't really conspiracy theory, this is just how a global economy is evolving amidst multiple conflicting interests and regulatory bodies.

btilly 8y ago

There are other conglomerates. Berkshire Hathaway is an extremely good example. It includes a wide variety of companies that like to spin off cash, such as See's Chocolates, combined with a core insurance company that could need access to very large financial reserves. According to http://www.berkshirehathaway.com/letters/2017ltr.pdf http://www.berkshirehathaway.com/letters/2017ltr.pdf they are operating under the assumption that a $400 billion catastrophe has a 2%/year probability, and they are prepared to weather such an event. Another good example is Amazon. They are the humble bookstore that does everything from web hosting to delivering groceries.

toss1 8y ago

My understanding is that the Japanese conglomerates are different from US conglomerates. The US ones are largely siloed collections of companies across a spectrum of industries. The Japanese ones are strongly vertically integrated. I was told when I was sponsored by Yamaha for international ski racing competition and at one of their testing camps: 'we mine the ore, make the metal, make the machines that make the tools, make the tools, and then use the tools to make the products'. It's about both controlling the quality all the way up and down the value chain, and also capturing the value-add all the way up the chain (not sure how much of each). I was quite impressed by their quality and technology, which was the prime reason I went with them. At the time, they were one of only two companies worldwide that could make a pair of skiis that was actually indistinguishable left/right to racers at our level (the other was Fischer which dominated the Swiss, Austrian teams and we wouldn't get their best race stock), and Yamaha had amazing ability to tune the performance properties. I'm quite sure that they could do it because of their strong vertical engineering and QA integration. (Always seemed like a superior model to me, but I'm not a big biz guy, so what do I know?) Edit: typos,clarity

brusch64 8y ago
What kind of ski racing did you do ? I've never heard about Yamaha skis. But I am from Europe so in alpine skiing (FIS races) I just know the European brands (Rossignol, Fischer, Head, Atomic or even more obscure ones like Stöckli).
- rjsw 8y ago
  The Olympic Men's Slalom in 1992 was won on Yamaha skis.
- toss1 8y ago
  Same, FIS Alpine racing. Mostly Downhill for me, but raced all events. Mostly on the Europa Cup and NorAm circuits and a bit at WC level. I'm not sure if Yamaha is still active in racing, but they had some really amazing skis, and they tried out a lot of interesting ideas. One of my favorites was a triple-core construction where two of the cores were a high-energy elastomer pre-stretched in the mold to ~5x their original length. The idea of this pre-load was to have a moderately soft flex but return a lot of energy as the ski un-bent as you exited the turn -- and it worked like crazy -- the best pair of GS skiis I ever had! I also had a pair of 220s to try for DH; they were not fast probably because they had too much energy and vibration on the straights, but they were an absolute blast for hi-speed free-skiing -- just crazy spring out of the turns -- I was sad to have to turn them back in since they weren't going in my race bag. Fun times...