Abstract
Overseas investment and penetration by Japanese enterprises has led to increasing industrial hollowing in Japan. On the other hand, foreign businesses are increasingly penetrating into and investing in Japan in accordance with their global business strategy. It is becoming increasingly important for Japanese small and medium enterprises(SMEs) to formulate an alliance strategy with foreign businesses that are penetrating into Japan as well as a competing strategy against foreign businesses by utilizing core competence. It will be increasingly difficult for Japanese SM Es to survive and develop under global competition and borderless world economies unless they collaborate with foreign businesses by establishing new management structures and developing unique business methods. The establishment of joint ventures between SMEs and foreign businesses penetrating into Japan is considered to be an important survival strategy employed by Japanese SMEs and is discussed in this paper.
