A keiretsu is a Japanese business network of companies bound together by interlocking business relationships and cross-shareholdings, traditionally organized around a core bank.
Member companies each hold small stakes in one another. Those cross-holdings shield every member from stock-market swings and hostile takeovers, which frees management to plan over long horizons. Horizontal keiretsu cluster diverse industries around a main bank that lends to, owns part of, and monitors its members; the "Big Six" of Mitsubishi, Mitsui, Sumitomo, Fuyo, Sanwa, and DKB are the classic examples. Vertical keiretsu link suppliers, manufacturers, and distributors within a single industry, as in Toyota's tiered supplier network, and remain a defining feature of Japanese manufacturing.
Keiretsu emerged after World War II, when the Allied occupation broke up the family-controlled zaibatsu conglomerates, and they dominated the Japanese economy through the second half of the twentieth century. After the recession of the 1990s, bank mergers and the unwinding of cross-shareholdings loosened the networks, though their influence persists. In startup and venture usage, the word also describes a portfolio whose companies do business with and support one another.