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keiretsu

Keiretsu is a business network composed of manufacturers, supply chain partners, distributors and financiers who remain financially independent but work closely together to ensure each other’s success.  In Japanese, the word keiretsu means “group.”  In business, the word is often used as a synonym for partnership, alliance or extended enterprise.  

The formation of a keiretsu allows a manufacturer to establish stable, long-term partnerships, which in turn helps them to stay lean and focus on core business requirements.  That same stability, however, can sometimes be a liability and prevent the manufacturer from responding quickly to changes in the economy, culture or technology. Keiretsu are organized around their own trading companies and banks. This allows each major keiretsu to be capable of controlling nearly every step of the economic chain in a variety of industrial, resource and service sectors.

 

This was last updated in March 2012

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