Management of Technology and Innovation in Japan

Japanese New Product Advantage: A Comparative Examination (p. 269-270)

Cheryl Nakata and Subin Im

Introduction

Over the last few decades, Japanese companies have been at the cusp of innovation, introducing new products to receptive buyers throughout the world. Toyota’s Prius, a hybrid gas-electric car, and Casio’s Exilim, a palm-sized digital camera, are just a few of the products recently developed and successfully marketed from Japan. The key reason for these products’ popularity appears to be built-in advantage, or superiority, over rival offerings. For example, the Prius saves on fuel costs, emits almost no fumes, requires little maintenance, and sells at an affordable price. Despite such successes, Japanese companies are unable to rest on any laurels.

Nipping at their heels are South Korean firms, which are vying with Japanese businesses in their traditionally strong sectors of consumer electronics and automotives. Samsung is perhaps the most notable challenger. The firm has introduced a flood of new products in the last several years, winning design accolades and many new customers for its premium cell phones, plasma flat-screen TVs, and ultra- thin computer monitors, among other innovations. In several of these categories, the firm is the global market leader or is a close second in sales. Along with several other companies based in South Korea (referred hereafter as Korea), Samsung is making great strides in innovation, mastering the ability to create advantageous new products.

Given this dynamic rivalry between Japanese and Korean businesses, we thought it timely to investigate new product advantage comparatively across the two countries. Specifically, we pursue these questions: 1) "how do Japanese companies create new product advantage and in what ways may the approach differ or be similar to that of Korean counterparts?" and 2) "does greater advantage necessarily lead to higher sales, profitability, and market share for Japanese companies, i.e. stronger new product performance, and is the relationship between advantage and performance different or the same for Korean firms?"

It is interesting to note that despite the significance of the Japanese and Korean economies, whose combined GNP of $4.5 trillion ranks only second after that of the U.S., there is limited understanding of how these countries have come to excel in export-led growth, particularly through the sales of new products to foreign markets. Our search of the literature indicates few investigations have been conducted on new product advantage among Asia-based businesses. There is only one published study on new product development in Korean enterprises (Mishra, Kim and Lee 1996), but it is not specific to the topic of advantage. In other words, the above questions have not been previously addressed as best we can tell. Hence, we believe our study will be of interest and value to managers and researchers who are aware of, and wanting to fathom, the tremendous rise of innovation capabilities outside the West.

We began our study by proposing a conceptual model of new product advantage, with differences and similarities noted between Japanese and Korean approaches in terms of drivers and performance outcomes. We then tested the model by conducting a survey of over 200 new product development managers in Japanese and Korean firms. In the following sections, we present the conceptual model, followed by the research hypotheses. Thereafter, we describe the methodology and findings, and conclude with implications for managers and researchers.