The Japanese motorcycle industry produces more than 70 percent of the world's motorcycles and enjoys the position of one of the most competitive industries in Japan. This case history aims to single out the distinctive characteristics of the industry and presents an economic analysis of its evolution from 1945 to 1965. After World War II, the market for motorcycles rapidly expanded when merchants employed them as a tool for lightweight transportation. New entry firms numbered over 200, which were mostly small- and medium-sized firms. The nature of motorcycle production then resembled bicycle making rather than automobile assembly. The entire process was basically a network of component suppliers and motorcycle manufacturers specializing in the final assembly. But Honda Motors first introduced mass production through an integrated system in its Saitama and Hamamatsu plants. This rapid expansion pushed Honda close to bankruptcy, owing to financial crises in 1954. By contrast, Tohatsu, a conservative but efficient firm, increased its market share to 20.2 percent in 1955 and became leader of the industry. While obtaining emergency financing from Mitsubishi Bank, Honda rationalized its management and plant system. Furthermore, Honda invested 7 billion -yen to build a new plant in Suzuka in 1960 in order to manufacture Super-Cub, which became a dominant model in emerging the moped market. This plant, which aimed to achieve the maximum production economy, was designed to produce only Super-Cubs and adopted a highly automated mass production system. This strategic decision by Honda resulted in increasing its market share from 18.9 percent in 1957 to 63.5 percent in 1963. Other small- and medium-sized firms were outclassed by the operation of Suzuka plant and were wiped out from the motorcycle market. This was the formation of oligo-polistic competition among the so-called Big Four and of the distinctive characteristics of the Japanese motorcycle industry, which is far larger in production size relative to all other nations and which brought the advantages of the scale economy.
This paper provides a qualitative analysis of the retail service for home electronic apparatus, focusing on TV sets, which were once by far the most widely handled product. In the late 1950s, Japanese TV manufacturers encouraged independent small service shops to join their keiretsu retail groups to provide local repair and maintenance services for their products and promote the sale of their goods to neighborhood customers. In order to support their retailers, manufacturers set up their own service station networks in the 1960s and invested a great deal in keeping their keiretsu retailers informed of new technologies. On the one hand, however, the advent of the transistor color TV in 1968 decreased the frequency of malfunctions and raised the need for equipment and technical knowledge once repairs were required. On the other hand, year by year, manufacturers produced new models that were increasingly maintenance-and adjustment-free.In the 1970s, many retailers tried to survive by door-to-door sales, but after the color TV market had matured by the mid-1970s, there were no longer any products suitable for door-to-door sales. With the severe shortage in the labor force, retailers encouraged their employees to set up their own shops. But by the late 1970s, with a matured market and the growing number of retailers, it became difficult to launch and maintain new stores at profit. It would have been beneficial for the Japanese home electronics manufacturers to retain friendly ties with retailer groups in the era of rapid technical progress, but dealers had to deal with the problem of reallocation of labor forces outside the manufacturer companies.
Nihon Musen Denshin Kabushikigaisha (Radio Corporation of Japan) was established in 1925 as a semigovernment corporation dedicated to the installation of radio equipment for the international telegraph business conducted by the government. The company's original plan was, however, quite different. Business circles had first intended to establish a company to integrate the international communications business and the manufacturing of radio apparatus, modeled on the giant radio monopolies of the advanced nations. This turned out to be a frustrated attempt, and unlike other advanced nations, a large company in the radio business was never established in Japan. This paper studies the process of the establishment of Nihon Musen and analyzes the reasons for its failure. From the 1910s to the 1920s, several companies entered the radio apparatus manufacturing industry mainly because of the rapid expansion in the market. In connection with the establishment plans for Nihon Musen, which had been supported by almost all influential business groups, Tokyo Electric Co., which was associated with GE, sought to form an organization similar to RCA in the United States, which all interested companies would join. The Ministry of Communications strongly opposed the foundation of such an organization on the grounds that the communications business was by law managed only by the government. Tokyo Electric failed to reach an agreement with Nippon Electric Co., and as a result, Radio Corporation of Japan was permitted only to install radio stations. This incident greatly influenced the Japanese radio industry. It resulted in an apparatus manufacturing industry composed of many small companies, an industrial structure far different from those of other advanced nations.