Competition in the optical disk industry and the international collaboration model

Modularization through the capsularization of integral elements

Abstract

The number of new entrants in the digital consumer electronics industry has rapidly increased due to product architecture and modularization, causing deterioration in fierce price competition. On the basis of a case analysis of the optical disk industry, this paper explores the phenomena of capsularization and distribution of integral know-how of Japanese companies into products, materials, equipment, and firmware in an environment conducive to modularization and new market entrants. Using this structure, a case is then presented wherein Japanese and foreign companies successfully formulated an effective collaborative model. Finally, the strategic direction is examined wherein Japanese companies take advantage of their abundant resources in a management environment of modularization expansion.