Online ISSN 1347-4456 Print ISSN 1347-4464

ABAS: Annals ofBusiness Administrative
ScienceVol. 3, No. 2, April 2004

GE, Dongsheng
FUJIMOTO, Takahiro

15

Quasi-open Product Architecture and Technological Lock-in:
An Exploratory Study on the Chinese Motorcycle Industry

http://www.gbrc.jp© 2004 Global Business Research Center

ABAS: Annals of Business Administrative ScienceVol. 3, No. 2, April 2004

CHIEF EDITOR

Junjiro Shintaku

University of TokyoEDITORIAL BOARD

Makoto Abe
University of Tokyo
Takahiro Fujimoto University of Tokyo
Makoto Kasuya
University of Tokyo
Hotaka Katahira
University of Tokyo
Nobuo Takahashi University of Tokyo
Technical Editor: Maki Nishida, Global Business Research Center

ABAS: Annals of Business Administrative Science is published quarterly in January,
April, July, and October, by Global Business Research Center, Marunouchi, Chiyoda-ku, Tokyo,
JAPAN. http://www.gbrc.jp

Annals of Business Administrative Science Vol. 3, No. 2 (April, 2004)

Quasi-open Product Architecture andTechnological Lock-in: An Exploratory Study on the
Chinese Motorcycle Industry
GE Dongsheng
Manufacturing Management Research Center, University of Tokyo
E-mail: katsu@mmrc.e.u-tokyo.ac.jp

Takahiro FUJIMOTO
Faculty of Economics, University of Tokyo
E-mail: fujimoto@e.u-tokyo.ac.jp

Abstract: From the perspective of product architecture, we attempt to explore thereasons why the Chinese motorcycle companies are stuck in the imitation of focalmodels of foreign makers, on the other hand expanding their production volume to theNo.1 position in the world. We propose that the architectural transformation of theoriginal focal models to quasi-open ones mainly through horizontal coordination among
local suppliers is the possible mechanism, which blocks the assemblers’ paths ofaccumulating product development capability. This happens at the stage of structuralform duplication, which weakens their incentives to progress further and reverse
engineering stage.
Keyword: quasi-open architecture, technological lock-in, supplier, motorcycle, China

1. Introduction

spotlight the motorcycle industry which is a typical

One salient paradoxical phenomenon amidst the fast

field for examining this problem. Although since

growth of China’s manufacturing industry is that

1993 China has become the largest production site ofwhile enterprises expand production volumes in a

motorcycles in the world, almost all the models are

speedy way, the accumulation of their R&D

developed by foreign companies mainly from Japan.

capabilities lags far behind. In this paper, we

We attempt to explore the underlying mechanism15

Ge and Fujimotothat drives such technological lock-in of the Chinese

many competitors from the industry. In the mid

motorcycle enterprises from the perspective of

1960s, the industrial structure converged to an

product architecture and expect to generalize ouroligopoly with only four companies surviving.
The closed and integral product architecture

analysis to understand the development path of otherstrengthened by cost advantage profoundly changed

manufacturing industries of China.
Product architecture is the concept of productthe dynamics of the Japanese motorcycle industry.

design methodology and is defined formerly as “theWill history repeat in China? The answer appears toscheme by which the function of a product is

be “no”. It is paradoxical to observe that after a long

allocated to physical components and by which thespan of about two decades of development, evencomponents interact” (Ulrich, 1995). It has beenthough the top companies have the capacity of one

shown as a new significant perspective to analyze

million units and the collective production volume

both business strategy of individual enterprises andhas overtaken Japan to become the No. 1 in thethe industry dynamics (Baldwin & Clark, 2000; Fine,world, the Chinese enterprises still keep on imitating

1998; Fujimoto, Takeishi & Aoshima, 2001). Whenthe models from foreign companies such as Honda’s

looking back to the motorcycle industry of JapanCG and CB models. What are the factors impeding

fifty years ago where some similar imitation

the incentives of the Chinese companies to go

activities to those of the current Chinese enterprises

beyond the sphere of the gravitation of foreign

have been frequently pointed out, we may see that

product technology? In the following, we will tackle

perspective of product architecture can also be

this “lock-in” problem and examine the relationshippersuasive of the industrial dynamics. Until the mid

between product architecture and the industry

1950s, there were more than hundred assemblers indynamics in China. Section 2 presents a framework

Japan who during their primary learning stage

on the process of product development capability

conducted imitation of European and American

accumulation which is derived from design processmodels. The turning point came as Honda developed

and the concept of product architecture. Section 3

Super Cub C100 model in 1958 and then achieved

presents one case study on product development

mass production in 1961. By completing thecompetition in the Chinese motorcycle industry andproduct-specific component design internally andfinally the discussion and conclusion are addressed.

realizingtheoptimalcoordination

among

components, C100 model features in a closed and

2. Process of Product Development

integral architecture. Combined with the cost down

Capability Accumulation

effect from mass production, it became one

The current situation of product development in thedominant design and speeded up the shake-out ofChinese motorcycle industry has been described as
16Quasi-open Product Architecture and Technological Lock-in“imitation” or “modified duplication” (Ohara, 2001).

structure. Then after physical principles and form

We try to operationalize these concepts here by

design features are applied to design components

putting them in a systemic framework derived fromthat implement sub-functions, the design solution isdesignarchitecture

reached by composition (assembly) of components.

perspective. We stress that it is important to

We can see that how to decompose functional

distinguish two different imitation stages during thespecifications and how to synthesize components

process of accumulating product development

into a systemic whole are actually the issue ofcapabilities, one is structural form duplication andproduct architecture.

methodology

andproductthe other is reverse engineering. The hurdle hard to

As mentioned above, product architecture isovercome during the transition from the former to“the scheme by which the function of a product isthe latter is considered to be the core of theallocated to physical components and by which thetechnological lock-in problem.

components interact” (Ulrich, 1995). In detail, it

Generally, the process of product design andcontains three aspects. One is the establishment ofdevelopment is consisted of the following steps.

function structure, the second is the mapping from

After the clarification of product concept, the basic

functiondesign is carried out to formalize the concept duringcomponents and the third is the specification of thewhich required functional parameters are specified

interfaces among components. Figure 1 shows theand functional structures are established. Then

diagram reflecting these basic ideas and the designpreliminary layout and form design optimization ofprocess from left to right (Fujimoto and Ge, 2001;

product and their refinement and evaluation against

Takeishi, Fujimoto & Ku, 2001).

structuretophysicalstructureoftechnical and economic criteria are conducted.

The framework of design methodology and

Finally in detail design process, complete detailproduct architecture provides an analytical apparatus

drawings of components and production documents

to our concern on the imitation activities of theare finalized after iterative trial-and-errors (Clark &catch-up enterprises. By looking at the diagram in

Fujimoto, 1991; Pahl & Beitz, 1988; Ulrich &Figure 1 in an inverse way from right to left, we can

Eppinger, 1995).

derive a framework for analyzing the path of theDuringthis

process,

we

can

see

development capability accumulation for catch-ups.

that

Similarly, the path is also consisted of three steps.

“decomposition” and “synthesis” activities are thecornerstone to find the design solutions that manifest

As the first step, the learning companies justthe required functional specification. First, thedisassemble the focal models, make the copies of theoverall function specification should be decomposed

physical components and then try to reassemble

into some sub-functions so as to establish function

them. Since the activities focus on the decomposition17

Ge and Fujimoto
Figure1. Design Methodology and Product Architecture

Ｆ

F1

S1

F2

S2

F3

S3

Ｓ

Sources: Ulrich (1995), Pahl and Beitz (1988), Takeishi, Fujimoto and Ku (2001), Fujimoto and Ge (2001).
Note: F: overall function of product.
F1, F2, F3: sub-funtions of product.
S: Physical structure of product.
S1, S2, S3: components of product.

of physical products and the superficial imitation of

investments in both hardware and software are

the form of the focal model, we call this step “thenecessary. Data base continuously acquired fromstructural form duplication stage.” On the second

hypothesis testing and experiments are step stones tostage, the learning companies go further to detect the

exploring the function structures of focal models.

functional design of components and their structural

With the aim at solving the inverse problem of theinterfaces. Put differently, the mechanism forfunction-structure mapping issue, this stage ismapping the functional elements to physicaltermed as “reverse engineering stage.” On the third

components begins to intrigue the imitators. Why

step, the learning companies have been equipped

this component is made in this form and why two

with the capabilities of reaching physical solutions tocomponents are linked in this way becomes theirfunctional requirements and they try to create newmain concern. Based on the increased understanding

concepts and formalize them into functionalof components and interfaces, different combinations

structure. Rather than making imitations and(mix-and-match) of components of different focal

followingmodels or the variation, addition or omission ofdevelopment process, the companies are capable ofindividual components are made to modify designs

doing the forward engineering and trying to launch

to satisfy some special demands. Gauging andnew products on markets. Therefore, we call thistestingstage “the forward engineering stage.” Figure 2

areessential

during

this

stage

and
18

the

inverseprocessofproduct

Quasi-open Product Architecture and Technological Lock-in
Figure 2. Three-stage Process of Accumulating Product Development Capabilities
Design capabilities

C3

C2

C2

C1

C1

C1

SFD

RE

FE

StagesNote: SFD: structural form duplication; RE: reverse engineering; FE: forward engineering
C1: capabilities of copying physical components and structural design;
C2: capabilities of detecting and arranging the function-component mapping;C3: capabilities of product concept creation and functional structure establishment.

economic forces are locking the companies into theshows this three-step process.
Such framework can make the analysis on

first stage and impeding their incentives to moveimitation operationable. We especially stress thatforward. In the following, we will present a casedistinguishing the first two stages is important tostudy of this lock-in phenomenon.

recognize the imitation activities and predict thedevelopment of imitators. The structural form

3. Case Study: Product Development

duplication stage is featured by superficial imitations

Competitionof the forms of focal models and companies cannot

Motorcycle Industry

progress unless function-structure mapping problems

During the historical development of the motorcycle

are tackled. By contrast, reverse engineering stage isindustry in China, there are two generations ofactually the entrance to the original product design

imitators. The first generation is a group of

and development. It may be perceived that learningstate-owned assemblers who have acquired thecompanies can transit smoothly from the first stage

technology licenses of some focal models throughto the second as the history of the Japanesetechnological cooperation and joint ventures with the

motorcycle industry shows, but in the case of theJapanese partner companies such as Honda, Suzuki

concerning industry in China, we found that someand Yamaha in the 1980s and the 1990s. The second
19

in

the

ChineseGe and Fujimoto
generation of imitators is a group of private-owned

samples of components because frame is thestart-ups who have achieved fast growth from the

backbone of motorcycle and interacts closely with

mid

and

engine, suspension, styling design and other main

Dachangjiang are the good examples who not only

functions. Cowling parts make a large proportion ofhave relatively large shares in domestic market, but

exterior styling design of motorcycle and arealso top the exportation. Without close collaboration

especiallywith the Japanese makers, they attempt to duplicate

Furthermore, frame and cowling parts need goodand modify focal models by exploiting the strength

coordination since how well the latter is mounted onof local suppliers. Therefore, in our case study, we

the former is important to the appearances ofchose one first-generation state-owned imitator

products that influence directly the perception ofassembler A, one second-generation private-owned

customers. Our investigations in 2002 found an

imitator assembler B, one frame supplier X and one

interesting case of product development competition

cowling parts supplier Y. The case setting is shown

between assemblers A and B in Chongqing city,in Figure 3. The links between assemblers andduring which Honda’s Super Cub C100 model was

suppliers show the transaction relationships, and thecopied targeting the Vietnamese market. By thelink between two suppliers shows the coordination

means

relationship. There is no link between two

cross-investigation on both sides of assembler andassemblers since they only compete on the market

supplier, we think the subjective bias of ourand have no direct relationship.1

respondents can be greatly reduced.

1990s.

Lifan,

Zongshen,Longxinimportantofforimitatorsemi-structured

Figure 3. Case Setting: An Inter-firm Network

Suppliers

A

B

X

Y

Note: Company A: the first-generation state-owned imitator assembler,
Company B: the second-generation private owned imitator assembler,
Company X: frame supplier,Company Y: Cowling parts supplier.
1

interview

andWhen both assemblers A and B almost

We chose frame and cowling parts as ourAssemblers

makers.

See Ge (2004) for details of the case study.

20

Quasi-open Product Architecture and Technological Lock-in
simultaneously determined to launch the copies ofthe parts of focal models independently andCub model in Vietnam market in 2001, suppliers X

assemblers purchase them via the catalogue ofand Y also started to duplicate the parts of the focal

suppliers. Modification of component design to suitmodel independently. Since for imitators the productbetter the needs of assemblers is feasible in this case.

development process starts from the physical

During the competition to launch the Cub

decomposition of the existing focal model rathermodel in the Vietnamese market, assemblers A and B

than from the abstract product concept, suppliers canadopted quite different strategies in choosing

duplicate the relevant parts as long as their selection

transaction patterns with suppliers. Assembler A

of focal models is consistent with the assemblers’conducted the in-house reverse engineering of the

choices. As suppliers develop the parts of the focal

focal model and tried to make the optimalmodel in a parallel way with assemblers, transaction

coordination of components in a top-down way. It

patterns between enterprises diverse.

chose “drawing-supplied system” when purchasing

One pattern is closed to “drawing-supplied

the parts from suppliers X and Y. By contrast,

system (taiyozu)” (Asanuma, 1989) under whichassembler B just made the search for the suppliers

assemblers make the imitation of the focal model

who have developed the parts and then purchased

and outsource only the manufacturing tasks toframes and cowling parts from suppliers X and Y

suppliers. Under this pattern, since assemblers carrydirectly by cash. The outcome is the lead time ofout the imitation of the whole system of the focal

assembler B was greatly shortened compared tomodel in a top-down manner, they are likely to gocompany A. Actually, many other private-owned

beyond the superficial form duplication and move toassemblers adopted the same strategy as assembler

the reverse engineering stage to detect the functional

B’s and rushed to purchase the parts of Cub model

design on a deeper level. The design drawings

and then sent their products to Vietnam. After

provided to suppliers contain the specifications ofassembler A completed its development work andform parameters, installing tolerances, materials, andlaunched its products in the Vietnamese market, it

the processing techniques. The second pattern isturned to be too late since a pricing war had been“drawing-approved system (shoninzu)” under which

triggered that made no profit margin for the lateassemblers take out the parts from the focal model

comer. Having learned this lesson, assembler A

sample and send them to suppliers. Suppliers are

determined to reform its purchasing system andrequired to make the drawings and then manufacture

reallocate the authority of procurement from productthe parts. In this case, the ownership of drawings

development department to its purchasing function.

belongs to suppliers. The third pattern is “purchased

Then changes have taken place as purchased parts

parts system (shihanhin)” in that suppliers duplicate

system21

anddrawing-approved

systemareGe and Fujimoto

4. Discussion and Conclusion

increasingly adopted.
The merit of shortening development lead time

Our case study showed that the bottom-up

by outsourcing design tasks is obvious in this case.

coordination between suppliers resulted in modules

In addition, the open transactions conducted bythat can be procured by assemblers using the

suppliers with multiple assemblers can also reducepurchased parts system. The advantages in lead time

costs as production volume increases. The question

shortening and cost reduction of such strategy

is that whether design quality can be secured throughdominated the reverse engineering by assemblers in

the purchased parts system when the components

a top-down manner and the choice of thesuch as frame and cowling parts are closely

drawing-supplied system. Due to its bottom-up

interacted and have great influence on the stylingfeature, the coordination between suppliers is

appearance of motorcycle. Has assembler B in our

localized within the close neighborhood of the parts

case just wanted to send the cheap products quickly

they make and is different with the top-down

to the market while sacrificing the quality? Our

modularization in which components’ interfaces arefurther investigation found that the quality concern

specified beforehand. By such efforts of independent

such as tolerance coordination was not considered as

suppliers, almost all best seller motorcycle models

the secondary issue by assembler B, as suppliers

have been copied with their components transformed

were responsible for the quality guarantee under theas standard parts that can be ordered via catalogues.

purchased parts system. Frame maker X and cowling

We call such phenomenon “the architecturalparts supplier Y had relatively close communicationtransformation”

during developing the parts of the Cub model. The

architecture of the focal models by the Japanesetechnical staffs had exchanged the parts of eachmakers has been changed while the models areother to make the test installation and attempted todecomposed into several series of components that

adjust the parts to better coordination. The cowling

can be easily procured from open market. Whileparts supplier Y also purchased lamps from anothermix-and-match

supplier and made the subassembly of lamps andcomponents is yet relatively few, we call suchcowls, which was another important styling design

architectural attribute of motorcycles in the Chinese

quality point. Therefore, under the coordination

market as “quasi-open” to differ it with the open

between suppliers, the subassembly of frame, cowls

product

and lamps was achieved. We can call this kind of(Fujimoto, 2002).

subassembly a “module” since it can be delivered toinofarchitecture

that

the

differentwithclosed

focal

total

integralmodels’compatibility

The quasi-open architectural attributes ofmultiple assemblers like a standard one.

motorcycles deeply influenced the competition rule
within the industry. The advantages on the aspects of22

Quasi-open Product Architecture and Technological Lock-in
lead time and costs speed up the product life cycle

suspension, and so on and to exploit quantitativeand make price competition fierce, and paradoxically,survey to get more generous recognition. We are also

weaken the incentive of enterprises to invest in

curious to know that how the Chinese enterprises

long-term R&D activities. While suppliers canmove forward out of the lock-in situation and how

improvethe perspective of product architecture can offer

manufacturing

quality

and

their

strategic solutions to the problem.

understanding of the parts they produce and theinteraction between other parts in the close
neighborhood, the knowledge is still the local one.

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