Abstract

"The Historical Transformation of Traditional Japanese Companies into “Global Niche Top” Companies－Lessons from Japanese Local Companies"

Takeshi Ohtowa, Kanto Gakuin University／Hiroshima City University (ohtowa@hiroshima-cu.ac.jp), Kazuo Doi, Kyushu Sangyo University (doi@ip.kyusan-u.ac.jp), Tomomi Shiosaki, Kyushu University (shiosaki@econ.kyushu-u.ac.jp)

The purpose of this paper is to clarify how traditional companies have transformed their original business into a new one in order to adjust to changes in their business environment and to illustrate how their new business has acquired a new market position as a global niche top company. When traditional companies confront challenges stemming from changes in their business environment, how do they recognize their challenges to their traditional business and decide whether they can overcome them or not?
In addition to entering a new business, traditional companies have tried to solve the problems through the technologies they have accumulated over the years in operating their original business, and to restructure their management resources to create a fit with the new business. In that sense traditional companies can be described as a business entity that tries to protect and develop the application of their acquired technological capabilities by expanding their core technologies to create new business opportunities in order to survive.
In particular, local companies that are mostly small and medium sized have saved their traditional business regardless of their limited management resources. Moreover, most of their management resources are embedded in their region. For local companies, tradition sometimes can be an impediment to transformation. Our research question is how local companies acquire their new competitive advantage in niche markets after overcoming the dilemma and pressure peculiar to local companies.
We examine the two cases, HAKUHODO and KAIHARA. Those companies, however, have converted traditional techniques into creative new products creating new demands and customer needs.We try to rediscover those companies’ heritage through these cases. Tradition itself breaks down the wall of tradition. It is handing down of traditions.