Japanese product development strategies

132JOURNALOFBUSINESS&INDUSTRIALMARKETING,VOL.13NO.21998,pp.132-154©MCBUNIVERSITYPRESS,0885-8624HistoricalperspectiveofJapaneseproductdevelopmentThepost-warJapanesecompetitivestrategyevolvedfromoneoflowwages(1945-1950s;labor-intensiveindustriessuchastextiles),tocapital-intensivescaleeconomiesasrisingwagerateserodedtheadvantageoflowlaborrates(1960s–early1970s;marketpenetrationandautomation-steel,shipbuilding,autos,consumerelectronics),tofocussedproduction(late1970sand1980s;high-volumesegmentsandestablishingaproductionfacilitythatminimizedcomplexity),toflexibleproduction(producingarangeofproductsonthesameproductionlineusingjust-in-timeinventorytechniquestoprovidebothlowercostandgreatervarietyinashortertimeandwithashorterlifecycle)(Musselwhite,1990).Thiswasdonebyabsorbingforeigntechnologiesandmakingcontinuousimprovementswhilemaintainingqualityconsciousness(Best,1990).TaiichiOhno,ChiefEngineeratToyotaduringthe1950s,learnedmanyvaluablelessonsfromDetroitwhichwouldlaterbeinstrumentalinthewaytheJapaneseeconomyprospered.Hefoundawaytoreducethetimerequiredtochangediesfromadaytothreeminutes.Hediscoveredthatitcostlesstomakesmallbatches,sincemakingsmallbatcheseliminatedthecarryingcostsofhugeinventoriesrequiredbymassproductiontechniques.Makingonlyafewpartsbeforeassemblingthemcausedmistakestoshowupalmostimmediately.ThiscausedOhnotoconcentrateonqualitytoeliminatethewasteoflargenumbersofdefectiveparts.Tomakethissystemwork,Ohnoneededbothanextremelyskilledandahighlymotivatedwork-force.Asaresultofapost-warstrike,anagreementwasworkedoutbetweenthecompanyandtheunion:employeeswereguaranteedlifetimeemploymentandtheirpaywouldbesteeplygradedbyseniorityratherthanbyspecificjobfunctionandwastobetiedtocompanyprofitabilitythroughbonuspayments.ThisessentiallymadetheemployeesmembersoftheToyotafamily,withrightsofaccesstoToyotafacilities(housing,recreation,clubs,etc.).Theemployeesalsoagreedtobeflexibleinworkassignmentsandtoinitiateimprovementsratherthanmerelyrespondtoproblems.Hence,theJapaneselaborpolicywasborn(Womacketal.,1990).Japanesecompaniestendtomarkettechnology-intensiveproducts.First,R&Dfocussesoncontinualincrementalimprovement,whichnaturallyextendsproducttechnology.Thiscanpushthemostmundaneproducts(automobiles,watches),overtime,intothearenaofhightechnology.Second,newtechnologiesprovidethebestpossibilitiesforservingmarketnichesandfragmentinglarger,morehomogeneousmarkets(Pine,1993).Japanesefirmsemphasizemeetingconsumers’needswithgoodqualityandreliableproductsatcompetitiveprices.Japanesecompaniesappearmoreadeptatexploitingstrategicwindows-opportunitiescreatedbynewmarketsegments,changesintechnology,ornewdistributionchannels.JapaneseproductdevelopmentstrategiesLaurenceJacobsProfessorofMarketing,UniversityofHawaii-Manoa,Honolulu,Hawaii,USAPaulHerbigProfessorofMarketing,GraduateSchoolofInternationalTradeandBusinessAdministration,TexasA&MInternationalUniversity,Laredo,Texas,USAPost-warJapanesecompetitivestrategyBirthofJapaneselaborpolicyTechnology-intensiveproductsAnexecutivesummaryformanagersandexecutivescanbefoundattheendofthisarticleFactorsintheJapaneseproductdevelopmentstrategyTheeightfactorsdiscussedinthissectioncontributedtoJapan’sspeedyandflexiblepost-wardevelopmentprocess.TopmanagementasacatalystTopmanagementplaysakeystrategicroleinnewproductdevelopmentinthetypicalJapanesecompany.Managementprovidestheinitialkickofftothedevelopmentprocessbysignalingabroadstrategicdirectionorgoalforthecompany.Thisisdonebyconstantlymonitoringtheexternalenvironment(competitivethreatsandmarketopportunities)andevaluatingcompanystrengthsandweaknesses.TheJapanesefirmcontinuouslyscanstheglobefornewideasandisabletoassesswithmoreforesightthetechnologiesthathavealargefuturegrowthanddiffusionpotential.Topmanagementrarelyhandsdownaclearcutnewproductconceptofaspecificworkplan.Ratheritintentionallyleavesconsiderableroomfordiscretionandlocalautonomytothoseinchargeofthedevelopmentproject.Acertaindegreeofbuilt-inambiguityisconsideredhealthy,especiallyintheearlystagesofdevelopmentoftheproductortechnology.Managementalsoimplantsacertaindegreeoftensionwithintheprojectteam.Thistension,ifmanagedproperly,helpscultivateamust-doattitudeandasenseofcohesionamongmembersofthecrisis-solvingteam.AJapanesecompanycomesincontactwithanappropriateseriesofgenerictechnologiesthroughin-houseresearchandaconsiderablecapacitytointegratethelatestscientificdevelopments.Suchcontactbecomespossiblethroughhigh-levelcollaborationwithuniversitylaboratories,publicandprivateresearchandinformationorganizations,andothercompanies(Giget,1988).Outsideresearchisanalyzedtoprovidematerialfordirectingin-houseappliedresearchprograms.Allthisisguidedsubtlybytopmanagement.Self-organizingprojectteamsAnewproductdevelopmentteam,consistingofmemberswithdiversebackgroundsandtemperaments,ishandpickedbytopmanagementandisgivenafreehandtocreatesomethingnew.Membersofthisteamoftenrisktheirreputationandsometimestheircareertocarryouttheirroleaschangeagentsfortheorganizationatlarge.Tobecomeself-organizing,agroupneedstobecompletelyaut