26th International Association for Management of Technology Conference - IAMOT 2017

The purpose of this study is to examine how a firm without a fundamental technology gain competitive advantages. This research uses the fundamental technology as a key word. The fundamental technology is the technology that satisfies two requirements. One requirement is a technology for working the “basic function” provided by a product. Secondary, when each firm enters the market, its fundamental technology is recognized as the technology composing the primary part of the product, and fundamental technology decided by the overall industry. The recognition subject is the set of manufacturers, and the timing for recognizing the fundamental technology is an introduction stage in the industry. It is the technology that is developed continually and improves the function level. In contrast, the peripheral technology is defined as the technology concerning all devices except the fundamental device. In order to solve research question, this research adopts qualitative research approach (Yin, 1984; Eisenhardt, 1989) as research method. It picked up 3 cases, such as Sony in the flat display TV industry, Casio in the digital camera industry and Nintendo in the home game machine industry. I had interview with product managers of Sony and Casio, competitors and device makers. I also used the secondary data, such as websites, newspaper, several journals and statistical data. From 3 case studies, this research extracted the two advantage of the firm without fundamental technology. First, those firms have a flexibility to respond quickly to environmental changes at low costs. In this research, we call its advantage an economic advantage. This advantage was known as strategic flexibility in existing researches. In addition, this study then found that wide selection in procurement means that such firms can choose the highest-performance center technology product from several options and switch easily among manufacturers for low-cost and flexible response to both technical and market demand changes in a highly competitive environment. Second, this study also found another advantage of firms without fundamental technology—an organizational advantage. The economic advantage on the financial side of the firm brings advantages from building relationships with external sources in order to reduce the firm’s costs. In addition to cost reduction, such firms enjoy an organizational advantage in decision making and organizational behavior. The organizational advantage consists of an activation of converting the product strength and an organizational sense of crisis. The activation of converting the product strength means exploration of new competitive factor and exploitation of accumulated technology, and the organizational sense of crisis does psychological energy supports the development of a product that is different. The firm without center technology makes the best use of these two advantages and develops innovative product which has new competitive factor in its industry. In conclusion, this paper points out the firm gains the two advantages, economic advantage and organizational advantage. The economic advantage points that the firm without fundamental technology can gain flexibility by wide selection and switch easiness in device procurement. Moreover, the firm without fundamental technology think out a new competitive factor and produce a real product which is supported by organizational sense of crisis.