Keywords: social systems, high-profit resilient structures, global coevolution, fusion, network externalities, patent data, entropy, chemical industry, Japan, high technology firms, high-tech firms, best practice
Global coevolution as a source of a high-profits resilient structure: a lesson from Shin-Etsu Chemical
Dynamic changes in external circumstances in a mega-competitive environment have prompted high-technology firms to pursue a high-profit resilient structure for their survival. Among Japanese chemical industry firms, Shin-Etsu Chemical has constructed a highly profitable and resilient structure by focusing its business segments into four core fields. This was made possible by fusing indigenous strength and lessons learned from global best practices primarily from its US subsidiary, Shintech. Shin-Etsu's success in this global coevolution strategy, which has led to efficient fusion and enabled its noteworthy establishment of a high-profit resilient structure, provides constructive suggestions for firm survival strategy in a mega-competitive environment. On the basis of trends in patent data and utilising concepts of entropy, centrality and network externalities, this paper attempts an empirical analysis of Shin-Etsu's efforts to construct a global coevolutionary mechanism and demonstrates the foregoing hypothetical view.