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Sogo shosha (総合商社 sōgō shōsha ) means general trading companies, a business entity unique to Japan trading a wide range of products and materials. In addition to trading, they have historically acted as investment banks and private equities. Sōgō shōsha may be better described as a business philosophy than with a visual model. See Yoshino and Lifson for an introductory history and discussion.
The seven largest sōgō shōsha are Mitsubishi Corporation, Mitsui & Co., Sumitomo Corporation, Itochu, Marubeni, Toyota Tsusho and Sojitz. Combined, they maintain approximately 1,110 offices in over 200 cities around the world and employ more than 20,000 highly trained specialists, (individuals with an average of over fifteen years experience).
Sōgō shōsha deal in general commerce. On one end, they supply large volumes of raw materials goods from large manufacturers or wholesalers to smaller distributors and retailers. On the other end, they act as an international sales force for medium- and small-sized companies without the ability to market and maintain distribution channels overseas. They also often act as the linchpin of large consortium contracts ranging from the building of shopping malls to railway and other property projects, coordinating the activities of banks, construction, and logistics companies.
What makes sōgō shōsha unique is their size, scope, information-gathering capabilities, and functional diversity. A sōgō shōsha is an economic organization whose functions consist of distributing the risk of large, complex transactions; reducing transaction costs through economies of scale; and making efficient use of capital. Sōgō shōsha traders are at the center of Japan's global economic efforts, handling half of the country's exports and two-thirds of its imports.
- Michael Y. Yoshino; Thomas B. Lifson (1986). The Invisible Link: Japan's Sogo Shosha and the Organization of Trade. MIT Press.