Keiretsu

A keiretsu is a type of business group found in Japan. It is a collection of companies that are linked by cross-shareholdings, interlocking directorates, and other business relationships. Keiretsus are often formed around a major bank, which provides financial services to the group's members.

The keiretsu system has its roots in the zaibatsu, which were large family-owned conglomerates that dominated the Japanese economy before World War II. After the war, the zaibatsu were broken up by the Allied occupation forces, but the keiretsu system soon emerged to take their place.

Keiretsus are often seen as a way for Japanese companies to cooperate and compete with each other. They can share resources and expertise, and they can also provide mutual support during difficult times. However, keiretsus can also be criticized for being too closed and for limiting competition.

There are three main types of keiretsu:

• Horizontal keiretsu: These are keiretsu that are made up of companies in the same industry. For example, there are keiretsu that are made up of automobile manufacturers, electronics companies, and so on.
• Vertical keiretsu: These are keiretsu that are made up of companies that are involved in different stages of the production process. For example, there are keiretsu that are made up of raw materials suppliers, manufacturers, and retailers.
• Mixed keiretsu: These are keiretsu that are made up of companies from different industries. For example, there are keiretsu that are made up of banks, insurance companies, and manufacturing companies.

The keiretsu system has been a major part of the Japanese economy for many years. It has helped to promote economic growth and stability, but it has also been criticized for being too closed and for limiting competition.