Fusing “East And West” For High-Profitable Resilient Structure In Mega-Competition:A Lesson From Shin-Etsu Chemical’s Global Coevolution Strategy | Chihiro Watanabe, Shinichi Yamauchi, Jae-Ho Shin & Yuji Tou

Confronting dynamic change in external circumstances amidst mega-competition, hightechnology firms have been pursuing a high-profitable resilient structure for their survival. This is particularly the case for Japanese chemical industry firms, which have been hindered by a fragile energy and materials supply while their profitability has declined due to the fatal nature of a mature industry. Among Japanese chemical industry firms, Shin-Etsu Chemical has been constructed a conspicuous highly profitable and resilient structure. This can be attributed to the extremely high level of its R&D profitability structure enabled by the fusion of indigenous strength (“East”) and lessons earned from global best practice (“West”). Shin-Etsu Chemical has endeavored to achieve global co-evolution primarily through its US subsidiary, Shintech. The success of Shintech can be attributed to a vertical co-evolutionary dynamism between the surface structure of the institutions common to both countries and the in-depth structure of the institutions identical to the host country, the US. Shin-Etsu’s success in its global coevolution strategy leading to the efficient fusion enabling its conspicuous ccomplishment of a high-profitable resilient structure provides constructive suggestions for firm survival strategy in mega-competition. This paper attempts an empirical analysis of Shin-Etsu’s endeavor in constructing a global co-evolutionary dynamism and demonstrates the foregoing hypothetical view.