AN ANALYSIS OF HIGH PROFITABILITY MECHANISM BY MEANS OF DYNAMISM BETWEEN TECHNOLOGICAL DIVERSIFICATION, LEARNING AND FUNCTIONALITY DEVELOPMENT

摘要

Many Japanese electric machinery firms can not make a profit because of fast price reduction. However, Canon has consistently kept high profitability and its operation income to sales (OI/S) has remained the highest among Japan's leading electric machinery firms. Many researchers have pointed out that the source of high profitability of Canon is its business model, with a high-profit structure of office supplies in the business machines market. However, the profitability of the business machine segment of Canon is much higher than other rivals in the business machine market (Ricoh, Fuji Xerox, Epson, etc). Therefore it is insufficient to explain the high profitability of Canon only with the business model of office supplies. The difference between Canon and their rivals in the business machine market is that it has a high market share in both copying machines and printers fields. Concerning the relationship between copying machines and laser beam printers (LBP), Canon has rapidly expanded its business, building on existing core technologies. Canon has incrementally developed new technologies in related technology areas. Under current strong price competition, the methods by which the firms raise their profitability are accelerating cost reduction and slowing the speed of sales price reduction. Learning is important to accelerate cost reduction. Creating new products which have new value and functionality matching the customer demand (i.e. functionality development) is important to increase sales price. Learning and functionality development can be attributed to technological diversification. Many studies have been made on the relation between technological diversification and innovative activities. However, there have been few studies that have tried to analyze the dynamism between technological diversification, learning, and functionality development. This study will demonstrate this dynamism. First, we analyze the relationships between copying machines and LBP from the viewpoint of the learning curve. Second, we consider the learning process and the functionality development based on concrete examples of Canon's copying machines and printers. Finally, we simulate this dynamism by means of system dynamics approaches.