Management of Technology and Innovation in Japan

Designing the Product Architecture for High Appropriability: The Case of Canon 17
Colorization
The pioneer of color in personal ink jet printers was Canon’s BJC-600J with a
4-color ink tank introduced in February 1994. It was revolutionary because the
BJC-600J made colorization a new competitive dimension in the market in which
portability and functionalities for desktop use were two key competitive criteria.
Based on the competition in the market at that time, the introduction of the
BJC-600J was contingent upon a steppingstone – Epson’s MJ-500. From a financial
perspective, the MJ-500 sacrificed profitability. It separated print head and ink
cartridge. When the ink was used up, the ink cartridge alone was replaced. The
conventional support and maintenance cost of Y7 per A4 page were reduced to
Y3.2 (Nikkei Sangyo Shinbun, April 9, 1993). The outcome was dramatic. Epson
began to regain market share in the ink jet printer market after 1993 in which
Canon had dominated before.
Canon responded with its high-speed printers BJ-220JS/JC. In February of the
following year Canon introduced the BJC-600J and further differentiated itself
from Epson. It kept the printing speed of the BJ-220JS/JC, while it dramatically
improved running cost as shown in Table 4. The running cost of Y2.3 in black was
less than that of Epson’s MJ-500 (Appendix 1).
Table 4. Evolution of Canon products: colorization
Model name
(launching date)
Price - body only (Y)
BJ-220JS/JC (6/93) BJC-600J (2/94)
JS: Y128,000
JC: Y98,000
Y120,000
Resolution (dpi) 360 x 360 360 x 360
Print Speed (char/sec) 248 240 (MAX)
Running Cost (Y)
Replacement cartridge style
Source: Appendix 1 and 2.
Y6 (black) Y2.3 (black)
Y18.1 ( color)
All-in-one head, black
ink
No head, separate color ink
The product architecture of the replacement parts was the key to this improvement
of performance. Unlike the all-in-one cartridge used in the BJ-220JS/JC, the
print head of the BJC-600J was permanent and only color ink tanks were replaceable
(Refer to the icons in Table 4). This significantly improved running cost; on
the other hand, it meant lowering of after-sales profitability.