Management of Technology and Innovation in Japan

6 K. Sakakibara and Y. Matsumoto
ble to bring PPCs to the family and personal market without the traditional service
network.
The cartridge technology, which allowed for simple-maintenance and supportfree
products, was technically significant, but it was not everything. Canon’s allin-one
cartridge did not only represent a consumable, but also contained central
functions of a copier, proprietary technologies and patents, within it.
As everyone knows, there is a black cartridge in a Canon copier. Because it is
an encapsulated type, detailed contents are not identifiable. It contains both, highprecision
central mechanisms, such as the image development device, and valueadded
consumable items. Intuitively speaking, the cartridge in a Canon copier is
“a black box that contains technology and profit.” The other part of the copier, in
contrast, is a low value-added plastic case and both mechanically and technologically
simple. It is, so to speak, “a chassis.”
By continuously introducing new products employing the same cartridge technology,
Canon limits exposures of its own technology and maintains the highly
profitable structure of the product line. The company considers the profitability of
each product as a viable technical issue to be addressed during the development
and engineering phase.
The Origin of the Idea
The idea that the profitability structure of products is based on development and
engineering issues originates from the successes and lessons in Canon’s camera
business.
Canon was originally established as an R&D and manufacturing company of 35
mm high-quality cameras in 1933 when there was no sufficient technology to
manufacture cameras in Japan. Its initial slogan was “Defeat Leica.” Leica was the
name of the world’s best camera manufactured in Germany. It is widely recognized
that Leica was the model for the modern camera.
From the beginning the company focused solely on developing and manufacturing
high-quality cameras and gained its reputation. In 1961 “Canonet” with an
automatic exposure mechanism became very popular, which contributed to the
development of the mid-class camera market and caused the subsequent explosive
growth of Canon.
In 1962 the former President Takeshi Mitarai, Chief Technology Officer Hiroshi
Suzukawa and Keizo Yamaji, a technician in the lens division, took a trip to
the United States to strengthen the North American camera sales and learn ways to
diversify the camera business. They received an unexpected welcoming at the
Eastman Kodak headquarters in Rochester, New York. Yamaji described the Kodak
visit as follows (“My Resume” on Nihon Keizai Shinbun, March 14, 1997):
When we visited several of the major Eastman Kodak facilities, they brought us
fancy lunches and dinners to welcome us. I asked, “Why is this?” “Cameras that you
manufacture are film burners,” was the response.