A Logic of the Firm Without Center Technology a Case Study of Casio Computer Co., Ltd in the Digital Camera Industry

The purpose of this study is to examine how the firm without center technology to gain the competitive advantage. Many researchers insist the firm which has core competence gains the competitive advantage. In contrast, Leonard-Barton (1995) investigated the possession of the core technology prevents the firm from gaining the competitive advantage occasionally. However, many firms without center technology succeed in a variety of industries lately. Therefore, the logic of the firm without center technology needs to be examined in detail now, and this study takes Casio in the compact digital still camera industry in Japan as an object of study. In this study, the center technology is defined as the technology which plays the basic function. The CCD and optical lens provide basic function of the digital camera. Moreover, the center technology is recognized as the center role of the product by product makers. Consequently, this study defines the center technology as knowledge and the production equipments of the CCD and optical lenses. Casio does not hold these technologies. In this situation, Casio could develop slim and light digital camera EXILIM in 2002. Although this had only 1.3 mega pixels CCD and optical lenses without zoom, it developed under new concept "wearable camera". Casio increased its market share in the digital camera industry. In the development process, Casio procured the center devices -the CCD and optical lens- from several device makers. At that moment, Casio was able to choose either advanced device or cheap device, and change the device makers when others provided more advanced and cheaper devices. Furthermore, Casio developed EXILIM under new product concept. It omitted the optical zoom and auto focus. Moreover, HCLi (Hyper CCD-Lens integration) and MCM (Multi Chip Module) were developed especially for EXILIM. Both devices saved space and contributed toward downsizing. This study examines that the logic of the firm without center technology in forcing an economical advantage and an organizational advantage. The economical advantage means that the firm can choose either advanced or cheap device out of several device makers, and change the alternatives cheaply and quickly. The uncertain technological environment forces the firms which have center technology encourage the technological development and pump money into development in order to follow the technological progress. Conversely, the firm without center technology is not under the necessity of investing the money in technological development. Moreover, the organizational advantage means that the firm without center technology is not restricted by organizational inertia and cognitive restraint, and exercises the characteristic strength. First, the firm without core technology is free from cognitive restraint on the product concept and technology. Second, it could not differentiate the product in the same respect as the product of the firm with center technology. Since it would pursuit the differentiation on the different points, its decision-makings and organizational behaviors would differ from other firms and could create new competitive advantages.