Title: The impact of diversifying technologies in related areas on firm's profitability: the case of Canon's copying machines and printers

Authors: Noritomo Ouchi, Chihiro Watanabe

Addresses: Department of Industrial Engineering and Management, Tokyo Institute of Technology, 2-12-10 W9-49 Ookayama, Meguro-ku, Tokyo 152-8522, Japan. ' Department of Industrial Engineering and Management, Tokyo Institute of Technology, 2-12-10 W9-49 Ookayama, Meguro-ku, Tokyo 152-8522, Japan

Abstract: Under the current severe price competition, contrary to the low profitability of Japanese electric machinery firms, Canon has consistently kept high profitability. Canon has developed new technologies in related technology areas such as copying machines and laser beam printer. This diversification strategy seems to be related to Canon|s high profitability. In particular, learning and functionality development can be attributed to technological diversification. This study attempts to elucidate the dynamism between technological diversification, learning and functionality development by empirical analysis and simulate the impact of diversifying technologies in related areas on firm|s profitability by means of system dynamics model. This analysis suggests that diversifying technologies in related areas leads to a high profitability.

Keywords: technological diversification; learning; functionality development; system dynamics; Canon; laser printers; photocopiers; copying machines; profitability; Japan; new technologies.

DOI: 10.1504/IJEIM.2009.025181

International Journal of Entrepreneurship and Innovation Management, 2009 Vol.10 No.2, pp.178 - 198

Published online: 16 May 2009 *

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