Forming and Strengthening Weak, Broad Ties That Support Diversification

The Example of Tokai Buhin Kogyo’s Expansion into the Medical Equipment Industry

Abstract

This study sheds light on the process by which a competitive advantage can be achieved in business diversification from the viewpoint of ties. It takes as an example the case of Tokai Buhin Kogyo, a company that successfully diversified its business from screws for use in automobiles to include screws for use in medical equipment, and analyzes the process of diversification. Using its basic competence as a foundation, the company formed weak ties covering a broad scope and worked to strengthen them while raising the level of its capabilities. This made it possible to overcome, step by step, three types of obstacle to success in the medical equipment field: technical, regulatory, and market-related. The facts discovered over the course of the research are described.