Evening Sessions #3: Keiretsu

So today I’m going to introduce one of the first Japanese strategic concepts I ever encountered.

Keiretsu.

Now we all the know that there’s a range of Japanese management techniques which have been marketed to within an inch of their lives, namely Six Sigma and Lean. There’s such an endless list of firms promising to revolutionise your firms’ productivity and efficiency that it’s easy to become a little cynical.

Instead of exploring these methods I have decided to look at philosophical concepts that are very much unique to Japanese corporate cultures.

So.

Let’s get a move on.

Keiretsu are groups of firms which in the strictest sense hold stakes in each other and operate as a group sharing research, competitive strategies and protecting each other from foreign firms (chiefly from takeovers). They normally have a bank at their centre which ensure their is liquidity available for group projects. Their cartel like function have through the years heavily influenced the abilities of foreign firms to enter the Japanese markets creating a profitable control of the market for Japanese firms.

Leading firms involved in Keiretsu include Mitsubishi, Sony, Asahi, Mazda, Yamaha and Sapporo.

How does this apply to healthcare?

In an ever competitive environment where trusts are increasingly expected to run their own budgets and prove their excellence by hitting government targets with ever diminishing resources, we require new strategies to keep moving forward. I would advocate increasing collaborations between hospitals and trusts to create greater ‘buyer’ power. In doing so, they can receive the best prices from their suppliers but even greater than this is the sharing of research and audit data. In doing so, hospitals and trusts can together investigate the different ways they manage and approach best practice in order to maintain costs while achieving clinical excellence.

The market isn’t a battlefield anymore. It’s an ecosystem where it’s possible to work together and still be profitable.

If you found this of interest, please share it!

Dr Saif Abed

CEO and Co-Founder

Abed Graham Healthcare Strategies Ltd

www.abedgraham.com

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3 thoughts on “Evening Sessions #3: Keiretsu

  1. in a sense this may be interpreted as collusion and not permitted by law. Then there is another risk that hospitals in forming such cartels may also influence the prices of their services which is against all the goals we as populace want from health reform.

    • I have worked in the National Health Serivce (NHS) where healthcare is provided free of charge so this is not really an issue. There are no prices to control per say.

      I am not advocating cartels as much as I am advocating the sharing of ideas and innovations.

      Beyond that I don’t think that there is any harm in taking a collaborative view in setting standards to ensure that healthcare organisations are not strong armed by their suppliers. You must remember that many hospitals and clinics do not have the business acumen to negotiate with the private sector effectively.

      If collaboration improves patient care, improves public-private sector relationships and means healthcare services can become financially sustainable then surely this is a positive thing?

  2. Pingback: Evening Sessions #13: I Believe in Co-opetition (Part 1) | Dr Saif Abed

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