Building Strategies of Global Companies by Building Cognitions

Evidence from Epson Printers for Emerging Markets

Abstract

Epson, among leading manufacturers of inkjet printer, introduced so-called ‘’Ink-Tank Model’’ to emerging countries in 2010 as the results of its adaptive learning activities to emerging markets where refilling of third party ink was predominant and thereby ‘’laser blade’’ business model, by lowering machine prices to increase machines in the filed aiming the profit from ink cartridge sales, did not properly work. The Epson’s Ink-Tank case provides rich insights into the market structure of context-dependent tacit knowledge and the cognitive structure within global organization. In many of emerging countries, it was supposed at strong lock-in status that their party ink was predominant because the value chains of third party supplies were strongly formed, and because of users’ mind-set that I would reduce the printing cost. At the same time, venders could hardly attentively recognize the pains to use their party ink, because they were trying to promote original cartridges. After Epson searched the users, many customers’ pains of third party ink user were found, such as ink leakage, print quality problem, and head damage. And head damage requires high repair cost or machine replacement cost. And they came up with a new product concept ‘’Ink-Tank Model’’ with large ink tank by doubling machine price and reducing genuine ink cost to 1/20, compared with conventional models. Since the required knowledge for this introduction was so tacit within the context of emerging countries, and contexts were beyond imagination of global head quarter in Japan, Epson made 3 strategies to make the proper sense-making of market information. Focused on Indonesia to make the deep search of market needs by local staff and engineers in head office Transferred authorities to local sales office for activities of research before the introduction and activities of its diffusion Tried to minimize the technical changes from conventional models looking for earliest introduction of ‘’Ink-Tank Model’’ to Indonesia market, but to get the feedback from markets to make the improvements on second generation model introduced in 2012 to many other emerging countries.