This study provides an analysis of the successful diversification process from the perspective of “weak ties.” Weak ties bring about new knowledge that does not overlap existing knowledge and are therefore useful to firms entering new markets. This study analyzes the diversification process using the example of Tokai Buhin Kogyo Co. Ltd., which successfully diversified from automobile components to medical equipment. The company’s president initiated the formation of weak ties, which the company then developed into strong ties so that it could acquire the knowledge and competence needed for entering the medical equipment business. As a result, the company was able to successively overcome three types of critical obstacles—technological, regulatory, and market—to diversifying into the medical equipment business.

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In pharmaceutical research and development of drugs, discovering new drugs from a large number of potential alternatives (chemical compounds), which are theoretically as many as 10⁶⁰, is an important challenge. Here the new-drug discovery process was explored through a case study on Rozerem from Takeda Pharmaceutical Company Limited. Although the recent mainstream approach is to generate and test a large number of alternatives using automation technologies, Rozerem was discovered through exploration of a small number of alternatives with rational chemical compound design, based on researchers’ experience and knowledge.

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Since the development of the idea of dynamic capabilities by Teece, Pisano, and Shuen (1997), it has been broadly discussed. However, there is no general view regarding the types of competencies that can be called dynamic capabilities. Teece et al. (1997) asserted that dynamic capabilities are one of the roles of organizational processes. Moreover, they asserted that organizational processes include static concepts, such as integration and coordination. This fact caused some confusion. Helfat and Winter (2011) contrasted the two concepts of operational and dynamic capabilities. They noted that the source of confusion was the fact that some competencies possess the nature of both concepts. In other words, three types of capabilities exist: pure operational, pure dynamic, and hybrid capabilities possessing both features. Helfat and Winter (2011) presented the example of corporate growth, such as an expansion in retail stores, an area where pure dynamic capabilities without any operational capabilities can be observed. Therefore, if pure dynamic capabilities are the pure competencies necessary for corporate growth, it is highly likely that these are the same competencies posited by Penrose (1959), who differentiated between economies of growth and economies of size. Takahashi (2015) conjectured that competencies that become resources unused for anything but growth are, more specifically, “competencies for start-up experts.”

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The mobile phone market in Japan has a particular type of user, called a “dual product user,” who uses multiple mobile phones. Compared with other mobile phone users, dual product users possess a high level of consumer knowledge regarding mobile phones. Their ability to process information based on their high level of consumer knowledge may enable them to use multiple products. In fact, during our survey, the mobile phones (iPhones, other types of smartphones, and feature phones) had quite diverse characteristics. In addition, dual product users tended to use mobile phones for gaming. This is likely due to the high telecommunications fees levied on smartphones in Japan as well as the complicated structure of these fees. In assessing these characteristics, users with a high level of consumer knowledge consider their own patterns of usage when using multiple mobile phones for different purposes. These findings will increase the potential for marketing to target those with a high degree of such knowledge.

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