This paper examines key factors that contributed to the success and the failure of Japanese electronics firms. In doing so, this paper presents a comprehensive yet rigorous studies by looking into both firm`s internal factors and external factors. This paper contributes by first, examining the history of Japanese electronics industry in chronological terms and how firms and the government policies had enhanced the competitiveness during the times of Japanese economic boom. Second, this paper looks into how their competitiveness have largely been degraded after the new millennium. The first factors are natural and man-made disasters such as the 2008 world-wide financial crisis, strong Yen, the Japan`s northeast big Tsunami along with Thailand`s flood and the second factors are Japanese firms` countermeasures to tackle these problems. Their counterstrategies of restructuring and increasing equipment investments recklessly have resulted in harming their productivity and performance due to reckless equipment investments. This paper concludes by giving implications to Korean firms, who are situated in a similar environment as Japanese did in the early 2000s, that structural reform cannot be simply about personnel reduction, business downsizing, or M&A but it is more about concentrating their investments in related businesses, particularly for high tech industries.