Dilemma between new and existing technologies: Separation and coexistence of old and new technologies in the Television Development Division of Sony Corporation

Regarding R&D management for long-term coexistence of new and existing businesses within a company in technological transition, development of high technology introduces conflict between existing low and medium technologies (LMT). One solution, organizational separation of old and new technologies, can render the technological resources of separated R&D groups mutually inaccessible, thereby possibly necessitating duplication of investment costs. That situation might be prevented by brief coexistence of separate groups during a transition period. Nevertheless, existing businesses based on LMT often retain large markets despite the success of new businesses. In the television business described herein, a technological shift began in the late 1990s to replace conventional CRT televisions with flat panel displays (FPD), including LCDs and plasma display panels (PDPs). Today, despite great interest in FPD televisions, global shipments in 2006 included 130 million CRT televisions and 46 million FPD televisions. Varying unit prices prevent a simple comparison, but CRT televisions constitute a large, fiercely competitive market. Continued coexistence of old and new businesses demands the contradictory conditions of independence of the two R&D groups while using mutual resources. Sony's case has revealed a single technical development division serving both old and new R&D groups, providing similar new technology for product development while co-ordinating these divisions' interests. The technical development division integrates technological and product development to integrate developed technologies into downstream product development. This integration process, so-called integration of old and new R&D technologies, incorporates lower divisions' technology and expertise into technological development, thereby enabling multiple downstream product development groups to acquire technology and expertise through technology that is integrated with that of other product divisions. The process' implications include the following. New businesses use existing business technology; existing businesses can incorporate new technology.Viewing technological changes as diversification, existing and new businesses can increase opportunities through co-operation.Integration of old and new R&D technologies, Low and medium technologies, Conventional resources, Separated organization, Electronics industry

The performance impact of core component outsourcing: insights from the LCD TV industry

Firms in technology markets often outsource the manufacture of core components—components that are central to product performance and comprise a substantial portion of product costs. Despite the strategic importance of core-component outsourcing, there is little empirical evidence (and many conflicting opinions) about its impact on consumer demand. The authors address this gap with an examination of panel data from the flat panel TV industry, across key regions globally. Results from their estimation indicate that core-component outsourcing reduces the firm’s ability to be on the technological frontier; this hurts demand, because the authors’ estimates suggest that consumers care about firms being on the frontier. However, such outsourcing also reduces costs. Finally, the authors find that outsourcing increases the intensity of competition in the marketplace. They assess these (often opposing) effects and conduct thought experiments to quantify the performance impact of core-component outsourcing

Options Under Uncertainty: An Empirical Investigation of Patterns of Commitment in Display Technologies in the Flat Panel TV Set Industry

This dissertation considers fundamental questions about real options reasoning and its application in the face of uncertainty: do firms behave as real options reasoning predicts, and are there performance benefits from its application? The concept of uncertainty is further developed by considering two primary types: technological uncertainty and market needs uncertainty. A qualitative industry level historical case study is performed on the flat panel TV industry, chosen because it exhibits high technological uncertainty and low market needs uncertainty. Real options logic predicts, in such an industry, that firms will develop and maintain technology options until uncertainty is resolved. Firm level case studies for major incumbent Japanese TV set manufacturers and other relevant firms are performed. Comparison across the cases, and between several specific firms is conducted to test and further develop theory. The firms studied are found to generally behave as predicted by real options logic. Evidence from the study does not present a clear relation between options-related behavior and performance. Although this study identifies evidence not holding options can have large negative performance results, firms holding options as predicted by theory did not realize lasting performance improvements. With one exception, firms attempting to leverage technological capabilities into improved market positions were unable to realize durable improvements in their positions. The development and release of flat panel TV coincided with changes in performance for many firms in the industry; however, these performance changes were short lived. By the end of the study period, industry players had generally returned to the trajectories they were previously on. Between-case analysis of several outlying firms in the sample provides a rich and nuanced view of requirements for firms to dramatically improve performance in the face of high technological uncertainty in a market with very large size potential and relatively well-understood customer needs. This research contributes to the empirical literature on real options and is novel amongst academic research in its coverage of the flat panel display history using Japanese sources. Finally, this dissertation includes managerial implications regarding the usefulness of real options reasoning as well as practical issues in its implementation

Industrial Dynamics and Locational Adjustment : Implications for Agglomeration Economies from the Case of Flat Panel Displays in Japan

Viewed globally, the production sites for the flat panel display (FPD) industry are concentrated in Eastern Asia. In particular, more than 90% of panels were produced in Japan, Korea and Taiwan. Also, in Japan, the geographical concentration was remarkable as was shown by Sharp, which produced liquid crystal panels in Kameyama, and Panasonic’s manufacture of plasma display panels (PDP) in Ibaraki and Amagasaki in the 2000s. Taking these facts and the significant changes in the modern economic environment as starting points in this paper, I study the conditions surrounding the location of FPD factories and the factors that affect such conditions from the viewpoint of spatial and organizational decision-making that seeks global advantage by focusing on technological cycles and facilities investment. From the example of one of the largest FPD manufacturers, Panasonic, I observe the progress of large-scale production and the shortening of the technological cycle, which suggests that the “thickness” of an industrial agglomeration is very important if a company wishes to maintain competitiveness

Competition of the mechanisms : how Chinese home appliance firms coped with default risk of trade credit?

During the transition period from a planned economy to a market economy in 1990s of China, there was a considerable accrual of deferred payment, and default due to inferior enforcement institutions. This is a very common phenomenon in the transition economies at that time. Interviews with home electronics appliance firms revealed that firms coped with this problem by adjusting their sales mechanisms (found four types), and the benefit of institutions was limited. A theoretical analysis claim that spot and integration are inferior to contracts, a contract with a rebate on volume and prepayment against an exclusive agent can realize the lowest cost and price. The empirical part showed that mechanisms converged into a mechanism with the rebate on volume an against exclusive agent and its price level is the lowest. The competition is the driving force of the convergence of mechanisms and improvement risk management capacity.China, Electronic industries, Corporate accounting, Industrial management, Trade credit, Distribution channel strategy, Contract, Convergence of mechanisms

Waste Cathode Rays Tube: An Assessment of Global Demand for Processing

AbstractThe management of used Cathode rays tube (CRT) devices is a major problem worldwide due to rapid uptake of the technology and early obsolescence of CRT devices, which is considered an environment hazard if disposed improperly. Previously, their production has grown in step with computer and television demand but later on with rapid technological change; TVs and computer screens has been replaced by new products such as Liquid Crystal Displays (LCDs) and Plasma Display Panel (PDPs). This change creates a large volume of waste stream of obsolete CRTs waste in developed countries and developing countries will become major CRTs waste producers in the forthcoming decades. This article provides a concise overview of world's current CRTs waste scenario, namely magnitude of the demand and processing, current disposal and recycling operations

Do you really know your consumers? : analyzing the impact of consumer knowledge on use and failure evaluation of consumer electronics

The field of Consumer Electronics (CE) can be characterized by continuous technological innovation, fierce global competition, strong pressure on time-to-market, fast adoption cycles and increasingly complex business processes. In this context it is increasingly challenging for product designers and developers to provide products with unique features and excellent price / performance characteristics, as well as having to provide products that meet all the consumer’s expectations. From a business perspective, research has shown that the number of consumer complaints and even product returns is increasing for complex CE (Den Ouden, 2006). Further research on the causes of these complaints showed that almost half of the complaints were due to non-technical reasons. Therefore, more insight is needed into product quality and reliability from a consumer point of view. A literature review showed that quality and reliability methods that are currently used in product development insufficiently prevent the large variety of consumer complaints: the number of consumer complaints is rising while at the same time the root cause of these complaints is more difficult to retrace. Product failures need to be measured and analyzed from a consumer’s point of view since the traditional fault-complaint propagation model fails to capture all potential sources of consumer complaints. More insight is needed into the relation between the diversity of consumers and the propagation of product development faults to these "Consumer-Perceived Failures" (CPFs).A conceptual framework was developed to model the underlying factors related to the propagation of product development faults to consumer complaints from a consumer point of view. This framework is based on insights from human-computer interaction and consumer behavior literature and the results of an explorative experiment. Furthermore, the most commonly used consumer selection criteria for consumer tests based on demographics and/or product adoption related characteristics do not sufficiently cover differences in CPFs. The consumer characteristic "consumer knowledge" is hypothesized to have a strong impact on differences in the underlying variables of this framework. A review of relevant consumer models and consumer characteristics used in human-computer interaction and consumer behavior research shows that this construct relates to cognitive structures consumers have about a product’s functioning as well as cognitive processes needed to use a complex CE product. This dissertation therefore aimed to investigate the hypothesized effect of consumer knowledge on two important variables of the conceptual framework: product usage behavior and failure attribution. By using multiple surveys, two laboratory experiments and a web-based experiment, the following aspects of the conceptual framework were investigated in this dissertation: • How and to what extent consumers can be differentiated on knowledge of complex CE • The effect of consumer knowledge on differences in product usage behavior • The effect of consumer knowledge on differences in attribution of product failures The results of the surveys to differentiate consumers on knowledge (both core and supplemental domains) of innovative LCD televisions demonstrated the successful development and validation of measurements of both subjective and objective measurements of expertise and familiarity. It was concluded that the selection of consumer knowledge constructs as criterion for differentiating consumers for a consumer test depends on the target consumer group for a product (e.g. a very narrow homogeneous consumer group versus mass consumer markets), the type of product (e.g. passive versus active interaction) and the goal of the consumer test. The laboratory experiment which investigated the effect of subjective expertise and objective familiarity on product usage behavior showed that higher levels of subjective expertise on both the television and computer domain result in significantly better effectiveness and efficiency and less interaction problems when performing complex product related tasks. Next, the results also showed that differences in subjective expertise stronger relate to differences in product usage behavior than those in objective familiarity. The findings of this study help product developers and designers to better understand differences in product usage behavior when consumers encounter interaction problems and can therefore help the product designers and developers to take better design decisions.The results of both failure attribution experiments with simulated failure scenarios of picture quality failures in an LCD television showed that only objective expertise differences affect differences in consumer perception of product failures. However, although the failure attribution of consumers with higher levels of objective expertise has more dimensions and is more refined, higher levels of objective expertise on a product do not automatically result in attributions that are more in accordance with the real physical cause of the failure. This has important implications because currently used test methods often differentiate consumers only on previous experience (i.e. familiarity) with a product. The results of both studies also demonstrated that both failure cause and failure impact do not significantly affect how consumers attribute the failures. In total it can be concluded that, when evaluating the effect of consumer diversity on fault-complaint propagation, consumer knowledge can be used to differentiate product use and failure attribution for complex CE. However, it should be noted that especially for failure attribution this effect is not consistent across different types of failures. In addition, compared to objective and subjective familiarity and subjective expertise, objective expertise has the strongest impact. In the context of fast evolving complex CE, objective expertise measurements are becoming increasingly important because familiarity or subjective expertise measurements on the (technical) functioning of currently available products can quickly become "incorrect" or "incomplete" for the next generation of products. These insights can support product designers and developers to make the right design decisions to enhance consumer satisfaction