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Management of Technology and Innovation in Japan

Management of Technology and Innovation in Japan

Case Study Shimano:

Case Study Shimano: Market Creation Through Component Integration * Akira Takeishi and Yaichi Aoshima Clerk: Hi. How can I help you? Customer: My kid wants a mountain bike. Which one is good? Clerk: Well, right now I recommend one of these. This one is made in Japan, and this one is made in Taiwan. Customer: Made in Taiwan? Clerk: Well, it IS a Shimano. Introduction We sometimes observe that while an entire industry may be in recession, some companies continue to perform well. Shimano, a bicycle parts manufacturer, is such a company. The bicycle manufacturing industry has recently been in a structural recession. Imports accounted for 30% of the domestic market in 1997 and 67% in 2001, with over 7 million of the 11 million bicycles sold in Japan being imported (Figure 1). The average price of bicycles commonly seen around town and often called * The main information sources of this case include: Interviews with Masahiro Tsuzaki, Manager of Marketing Department, Engineering Division, Shimano Inc., and Masahiko Jimbo, Manager of the same department (January 25, 2001, October 25, 2001, and March 5, 2001). Interview with Hiroshi Nakamura, Cycle Development Center (January 25, 2001). Speech delivered by Yoshizo Shimano, CEO of Shimano Inc. at a seminar held by the Ministry for Economics, Trade and Industry (June 27, 2001). Shimano Inc. 80-Year -History-Editing Committee, 80 Years of Shimano 1921-2000: Toward a New Future, March 2001. Shimano Product Catalog. “Shimano Machikoujouteki na Jiyuu ga Katsuryoku, Jitennsha Buhin de Sekaiseiha (Shimano’s Active Power like Small Workshops: World Domination in Bicycle Parts)” (In Japanese) Nikkei Business, November 2, 1998, pp. 54-56. “Shimano Koukyyuu Jitensha buhin de Toppu, Puro mo Aiyou shi Kouseiseki Renpatsu (Shimano is Top in Quality Bicycle Parts, Continued Success as Professionals become Regular Users)” (in Japanese) Nikkei Business February 21, 1998, pp. 39-41. We would particularly like to extend our gratitude to Mr. Tsuzaki and Mr. Jimbo, who cooperated with three interviews and explained everything from the basics, in addition to providing a variety of materials. This case was originally written in Japanese in 2002 and appeared on Hitotsubashi Business Review, 50 (1), 2002, pp. 158-177. English translation was financially supported by “The 21st Century COE Program on Knowledge, Corporate System, and Innovation” at Hitotsubashi University. All responsibility for the content of this case lies with the authors.

30 A. Takeishi and Y. Aoshima “granny bikes” is around 20,000 Yen for domestically manufactured models and around 10,000 Yen for imported bikes from South East Asia and China. The difference is clear. Domestic production of bicycles has continued to decline and there has remained no vestige that Japan once shined as the production base for the world bicycle market. Yet, Shimano has managed to maintain an overwhelming share in the world market for bicycle parts, such as derailleurs, shift levers, and brakes. Shimano’s brand value is ranked high among Japanese firms. According to the Nihon Keizai Shimbun’s brand score, Shimano is ranked 20th in Japan (2001). Companies with the same rank include large firms like Hitachi, Sharp, Denso, Fanuc, and HOYA. 1 Number (10,000s) 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Number produced domestically Number imported Proportion of imports 1997 1998 1999 Year Year 2000 2001 Note: Proportion of imported bicycles (percent) = the number of imported bicycles / (the number of bicycles produced and shipped domestically + the number of imported bicycles). The number of exported bicycles is negligible. Source: Japan Bicycle Association Fig. 1. Bicycle production and imports in Japan Bicycle fans proudly say “I have Dura-Ace”. Dura-Ace is the brand name of the series of parts Shimano sells for sporting bicycles. As previously mentioned, the use of Shimano parts matters more for customers than who assembled the bicycle. Major bicycle manufacturers cannot even start product development before Shimano announces a new product plan. Intel’s former CEO Andrew Grove was reportedly amused to hear that Shimano was called “the Intel of the bicycle industry.” The recent performance of Shimano has suffered somewhat due to setbacks in American and European sales, but its financial performance is far better than oth- 1 Nihon Sangyo Shimbun, February 14, 2001 80% 70% 60% 50% 40% 30% 20% 10% 0%

  • Page 1 and 2: Management of Technology and Innova
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    The Customer System and New Product

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    The Customer System and New Product

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    Part II: Process Aspects

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    88 S. J. Harryson An important sugg

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    90 S. J. Harryson Introducing a Kno

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    92 S. J. Harryson Their data also s

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    94 S. J. Harryson view of transacti

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    96 S. J. Harryson but never produce

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    98 S. J. Harryson Know-Who in Produ

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    100 S. J. Harryson Leveraging Intra

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    102 S. J. Harryson naka stated that

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    104 S. J. Harryson protect Canon’

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    106 S. J. Harryson Consequently, a

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    108 S. J. Harryson References Abegg

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    110 S. J. Harryson Johansson U and

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    The Domestic Shaping of Japanese In

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    The Domestic Shaping of Japanese In

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    The Domestic Shaping of Japanese In

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    The Domestic Shaping of Japanese In

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    The Domestic Shaping of Japanese In

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    The Domestic Shaping of Japanese In

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    The Domestic Shaping of Japanese In

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    The Domestic Shaping of Japanese In

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    The Domestic Shaping of Japanese In

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    The Domestic Shaping of Japanese In

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    The Domestic Shaping of Japanese In

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    The Domestic Shaping of Japanese In

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    Fig. 3. Japanese creativity with lo

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    The Domestic Shaping of Japanese In

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    The Domestic Shaping of Japanese In

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    144 M. Yasumoto and T. Fujimoto low

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    146 M. Yasumoto and T. Fujimoto in

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    148 M. Yasumoto and T. Fujimoto sup

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    150 M. Yasumoto and T. Fujimoto Mea

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    152 M. Yasumoto and T. Fujimoto com

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    154 M. Yasumoto and T. Fujimoto Jap

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    156 M. Yasumoto and T. Fujimoto The

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    158 M. Yasumoto and T. Fujimoto As

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    160 M. Yasumoto and T. Fujimoto The

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    162 M. Yasumoto and T. Fujimoto The

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    164 M. Yasumoto and T. Fujimoto Bru

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    “Fuzzy Front End” Practices in

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    Number of companies 250 200 150 100

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    “Fuzzy Front End” Practices in

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    “Fuzzy Front End” Practices in

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    N=551 “Fuzzy Front End” Practic

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    “Fuzzy Front End” Practices in

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    “Fuzzy Front End” Practices in

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    “Fuzzy Front End” Practices in

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    “Fuzzy Front End” Practices in

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    186 R. Haak The Toyota production s

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    188 R. Haak (1988, p. 3) pointed ou

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    190 R. Haak Essentially, the key fa

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    192 R. Haak movement of materials n

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    194 R. Haak ent from traditional me

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    196 R. Haak Total Quality Control (

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    198 R. Haak or shared with other co

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    200 R. Haak Görgens J (1994) Just

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    202 R. Haak Ohno T (1988) Toyota Pr

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    Part III: Organizational Aspects

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    208 K. Nobeoka Firms such as Toyota

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    210 K. Nobeoka to share technology

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    212 K. Nobeoka launched an initiati

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    214 K. Nobeoka only 23 departments

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    216 K. Nobeoka product introduction

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    218 K. Nobeoka 1993. Rather the cha

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    220 K. Nobeoka Second, Toyota also

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    222 K. Nobeoka and it was not often

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    224 K. Nobeoka The hierarchical chi

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    226 K. Nobeoka tion. Engineers can

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    228 K. Nobeoka believes that five d

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    230 K. Nobeoka Discussion and Concl

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    232 K. Nobeoka essential to support

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    234 K. Nobeoka Markides C and Willi

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    236 D. Ge and T. Fujimoto ownership

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    238 D. Ge and T. Fujimoto shares th

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    240 D. Ge and T. Fujimoto Table 1.

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    242 D. Ge and T. Fujimoto Based on

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    244 D. Ge and T. Fujimoto Discussio

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    246 D. Ge and T. Fujimoto sourcing

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    248 D. Ge and T. Fujimoto Nishiguch

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    250 C. Herstatt, C. Stockstrom, and

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    252 C. Herstatt, C. Stockstrom, and

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    254 C. Herstatt, C. Stockstrom, and

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    256 C. Herstatt, C. Stockstrom, and

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    258 C. Herstatt, C. Stockstrom, and

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    260 C. Herstatt, C. Stockstrom, and

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    262 C. Herstatt, C. Stockstrom, and

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    264 C. Herstatt, C. Stockstrom, and

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    Part IV: Cultural Aspects

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    270 C. Nakata and S. Im have not be

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    272 C. Nakata and S. Im ucts, such

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    274 C. Nakata and S. Im customers a

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    276 C. Nakata and S. Im New Product

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    278 C. Nakata and S. Im Measures We

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    280 C. Nakata and S. Im analysis in

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    282 C. Nakata and S. Im Managerial

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    284 C. Nakata and S. Im derstanding

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    286 C. Nakata and S. Im Fukuyama F

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    Differences in the Internationaliza

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    Differences in the Internationaliza

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    Differences in the Internationaliza

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    Differences in the Internationaliza

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    Differences in the Internationaliza

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    Differences in the Internationaliza

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    Differences in the Internationaliza

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    3.94 To adapt products to local req

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    Differences in the Internationaliza

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    Differences in the Internationaliza

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    Acknowledgment Differences in the I

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    Global Innovation and Knowledge Flo

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    Global Innovation and Knowledge Flo

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    Global Innovation and Knowledge Flo

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    Global Innovation and Knowledge Flo

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    Global Innovation and Knowledge Flo

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    Global Innovation and Knowledge Flo

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    Global Innovation and Knowledge Flo

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    Global Innovation and Knowledge Flo

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    Global Innovation and Knowledge Flo

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    330 C. Herstatt, B. Verworn, and A.

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    332 C. Herstatt, B. Verworn, and A.

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    334 C. Herstatt, B. Verworn, and A.

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    336 C. Herstatt, B. Verworn, and A.

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    338 C. Herstatt, B. Verworn, and A.

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    340 C. Herstatt, B. Verworn, and A.

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    342 C. Herstatt, B. Verworn, and A.

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    344 C. Herstatt, B. Verworn, and A.

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    346 C. Herstatt, B. Verworn, and A.

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    348 C. Herstatt, B. Verworn, and A.

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    350 C. Herstatt, B. Verworn, and A.

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    352 C. Herstatt, B. Verworn, and A.

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    From Practice: IP Management in Jap

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    From Practice: IP Management in Jap

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    From Practice: IP Management in Jap

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    Objectives of IP management To cont

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    From Practice: IP Management in Jap

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    From Practice: IP Management in Jap

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    From Practice: IP Management in Jap

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    From Practice: IP Management in Jap

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    From Practice: IP Management in Jap

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    From Practice: IP Management in Jap

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    From Practice: IP Management in Jap

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    From Practice: IP Management in Jap

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    Technology Planning Function From P

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    From Practice: IP Management in Jap

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    From Practice: IP Management in Jap

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    MoT: From Academia to Management Pr

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    MoT: From Academia to Management Pr

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    MoT: From Academia to Management Pr

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    MoT: From Academia to Management Pr

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    MoT: From Academia to Management Pr

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    MoT: From Academia to Management Pr

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    MoT: From Academia to Management Pr

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    MoT: From Academia to Management Pr

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    MoT: From Academia to Management Pr

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    Index 3G 148 f., 152 5 S process 19

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    Japanese consumers 125, 129, 135 Ja

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