Lessons for Developing Countries
Edited by Mitsuhiro Kagami, Masatsugu Tsuji and Emanuele Giovannetti
Chapter 11: Tipping, Standardization and Convergence: Catch-up and Failure in Japan’s Standards Strategy
Mitsuhiro Kagami 1. INTRODUCTION Technical standards* are basic for using goods. If one person uses miles while another uses kilometres to describe speed/distance on a car speedometer, neither can necessarily understand it. Of course if a conversion factor exists, both can calculate the speed/distance. In this case the conversion is 1 mile = 1.6km. By the same token, if the electrical frequency is different, home appliances cannot be used in such different cases as 50 cycles or 60 cycles. In this case, too, a converting switch exists to change cycles. These simple examples show that technical specifications or standards are necessary for products that stipulate technical characteristics. For, if you do not know them, like foreign languages, you cannot use them (or communicate with others). Here again, however, if conversion factors (translators) exist, both can be converted. Market size is another factor that comes into play when consumers choose a specific product. If people like a product for its features: design, form, handling, usefulness, economy and popularity, then sales increase, and eventually the product will dominate the market. A slight change in the function or character of a product’s features however may produce a change in consumer response to the said product and result in falling sales and a loss of market dominance. This is called ‘tipping’. One of the most notable examples is the VHS vs. Betamax rivalry for the home videotape market. When a specific product dominates a market, standards attributable to the said product are called ‘de facto...
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