Sharp Corporation: Beyond Japan Essay Example

those that lltts case has been wrilten on lhe bas/s of published sources only. Consequently, the inleryretation and percpeclives prcsenled in this case are not necessaily lhose of Sharp Coryoralion or any of its employees. ' 'Sharp Akajide Kalayama-shachora Chinsha," The Mainichi NewspapeL Tokyo, June 24, 2009 " H. Sagimoi, "Sharp lshin: Sarcba Kameyama Model," Nikkei Business. July 6, 2009, pp. 18-21. ' - ombined Sharp's knowledge and capabilities in ways other firms could not imitate.

This approach had at ttt" ttea. t ofSharp's impressive history ofdeveloping unique, groundbreaking products. Sharp was active in intemational markets, bul had chosen to manufacture ils electronic components exclusively in Japan. often, these components employed cutting-edge technology and required capitalintensive plants to manufacture. Sharp's overseas plants, on the other hand, typically focused on the final assembly of products for local consumption.

The Japanese domestic plants had become centres of highvalue-added knowledge, whereas the overseas plants had not.  Mikio Katayama joined Sharp in l98l after graduating from Tokyo University with a degree in engineering. He had followed an unusual career path at Sharp. Early in his career Katayama worked on solar panels, but he later moved into Sharp's LCD business. Katayama was promoted to the position of corporale director in 2003, and made corporate senior executive director in 2006, becoming responsible for both large LCDs and LCD TVs.

Still in his 40s, Katayama was much younger than Sharp's other senior managers. In April 2007, Katayama became president of Sharp and the previous president, Katsuhiko Machida, was appointed chairman " Katayama had an unusual combination of abilities. Although he had an engineering background, his ability to develop and communicate a broad strategic vision made

him stand out. Facing challenges on a number of fronts simultaneously, Sharp needed the kind of unconventional leadership Katayama could Drovide. LCDS

Over the years, the name "Sharp" had become associated with leading LCD technology. The company first took notice ofthe technology after one ofits_engineers saw a TV clip showing an RCA LcD prototype in 1968. Sharp licensed the technology in 1970. 5 RCA's presentation ofLCD teihnology had focused on its promise as a flat screen TV display. However, RCA had later concluded that the technological barriers LCD faced were too high and had ceased LCD development. sharp had treated LCD very differently; LCD could be useful for many other applications besides TV.

Calculators and watches were applications where even basic LCDs provided clear advantages to other display technologies. Sharp had continued to develop LCD technology actively for many years. Although early LCD had many limitations, many of these were overcome as the technology developed. In the late 1980s, thin film transistor LCDs (TFT-LCDs) were developed, making possible bright, high-contrast displays. However, these were diflicult and expensive to produce, limiting adoption to applications where the low energy usage and flat design ofthe LCD were absolute requirements.

Sharp identified display applications where the displays were attractive despite their high cost and small size, such as navigation systems and laptop computers. Sharp was not alone in its pursuit of LCD technology. A number of other fabrication equipment manufacturers, and input suppliers also invested heavily in LCD 4 electronics firms, LCD R. Much ofthe 'T. Numagami, Mikio Katayama interuiew with NikkeiBusinssq 'Kukyo koso Seich o Vision," Nikkei Business. July 6,2OOg, pp. 22-24.

Ekisho Displav no Giiutsu Kakushinshi. Hakuto Shobo eubtishig TokyoJ999. echnological

progress made in LCD technology during the 1990s was due to exchanging and integralng knowledge from these different kinds of firms. In particular, LCD production yields the amount of usable displays producible from a certain amount of inputs increased dramatically, resulting in lower production costs per display produced. There was a downside to cooperation within the industry. By the time production technology reached its fifth generation, it had been improved to the point that firms with little LCD experience could buy a new plant and get it to function reasonably well with limited outside help.

Improved production equipment, increased mobility of LCD engineering talent and technology transfer agreements had facilitated the development of LCD technology by firms in South Korea and raiwan. once these new competitors learned to operate, the incumbent Japanese LCD firms found it increasingly difncult to compete. Although the industry's cooperative approach had facilitated the development ofLCD production and cost performance, Sharp became concerned that too much of its proprietary knowledge was being leamed by the outside world, decreasing its competitive lead.

To protect its major investments in LCD and retain tts cost advantage, Sharp decided to operate much more secretly. Beginning with the first of what would become two plants in Kameyama (Mie Prefecture, Japan), Sharp pursued a black-box', approach to its manufacturing operations. 6 Outsiders were not allowed to see the inside ofSharp's LCD planis. Even key partners including suppliers and equipment producers were not admitted beyond the loading dock. Sharp believed this focus on secrecy had helped it maintain its lead in proprietary technologies that otherwise might have been lost.