When Toys 'R' Us, one of America's most successful store chains, broke into Japan's famously restricted and over-regulated retailing industry, it wisely allied itself with McDonald's which acquired a 20% stake in the Japanese operation of Toys 'R' Us. Den Fujita, McDonald's' president in Japan, is one of the best retailers there.

With IBM and Coca-Cola in Nigeria, a joint venture could not export to neighbouring African countries, as other subsidiaries of IBM and Coca-Cola were already in existence there.

Japan's move from being component suppliers to collaborators in the United Kingdom involved strategic thinking. The Japanese business relationship with Europe started with the supply of components to European businesses. Soon Japan wanted to move ahead and establish their own brands in these markets. Thus gradually, Sony, Matsushita and Mitsubishi set up local manufacturing operations in the United Kingdom. Naturally, the influx of Japanese brands posed a threat to the European industry. Quick to respond, Japanese companies like Toshiba and Hitachi simply searched for UK partners. But such a movement of manufacturing operations across the continents translated into high cost incidence both in money and quality terms. But Japan saw these costs as intrinsic to the need to establish brand positions and distribution strengths in the UK.

Toshiba and Motorola's association goes back to the mid-1980s, in the development of microprocessors and memory chips. Frequent interactions between the two companies led to the creation of a successful, healthy alliance.

Combining the strengths of the two companies contributed considerably to the success of Corning's joint venture with Siemens to produce fiber optic cable. Corning contributes the patented technology involved and Siemens the finance and distribution network, as well as the technology for the required equipment.

• Corning obtains over half its profits from a host of alliances, over two-thirds of them with foreign companies. Some examples are:
• BICC Britain for optical fibre
• Giba-Geigy (Switzerland) for medical diagnostic equipment and materials
• Cie Financiere des Fibres Optiques (France) for optical fibre
• Siemens (West Germany) for optical fibre cable
• Finimi (Belgium) for specialty glass
• Asahi Glass (Japan) for glass for TV picture tubes and cookware
• Beijing Electronic Glass Engineering Technology School (China) for glass for TV picture tubes
• NGK Insulators (Japan) for ceramics for catalytic converters
• Samsung Group (South Korea) for glass for TV picture tubes
• Australian Consolidated Industries (Australia) for cookware
• Metal Manufacturers, Amalgamated Wireless Austral-Asia (Australia) for optical fibre

IBM's operations in Japan are successful where it shares distribution units with Ricoh and computer-integrated manufacturing with Nippon Telephone. IBM is also active in a tie- up with Fuji Bank for financial systems marketing.

When the Sandoz-Sankyo alliance was terminated, this resulted in the establishment of an independent business for Sandoz in Japan, making it one of Japan's leading pharmaceutical companies. The Japanese partners in the alliance had meanwhile gained access to Western European markets, which business they continue to build on.

Bayer's alliance with Takeda ended in a similar successful fashion.

Glaxo, the British pharmaceutical company, has not established a full business system in each country of its operation. The company has not, for example, built a full-scale sales and service network in Japan. Glaxo instead formed alliances with Japanese companies and exchanged its best products with each of them. Thus while Glaxo effectively extended the network of its overseas operations, it continued to focus its own resources on its already established network in Europe, generating greater sales there.

Nippon Glaxo (of which Glaxo holds 50%) has recently signed an agreement with Sankyo and Taisho Pharmaceuticals of Japan to co-develop Zantac, its best-selling drug, as part of Glaxo's strategy of licensing out development.

Says one young Chinese employee headhunted by BHP in 1988 at the age of 31 to be its chief representative in China "BHP recognises that Beijing needs someone who is not out of the straight BHF mould...business in China is based or relationships, and how well you develop these relationships is what gives you opportunities...foreign companies have had trouble with this because they pay too much attention to contracts...they also assume because it is a joint venture, the Chinese will do it. This is not necessarily so, as the parties often do not have a strong understanding of each other's needs...as reflected in the Chinese proverb 'Same bed, different dreams."