CONTRIBUTION

Core Technology Strategy from a Long-term
Perspective

Prof. Yuichiro KATO
Center for Social Contribution and
Collaboration, Nagoya Institute of Technology

In recent years, many manufacturers are faced with the commoditization problem. The key to overcome this is
to create new value dimensions. However, it is difficult to practice value dimension creation, there is a tendency
to remain in the idea of improving "QCD" in existing paradigm. So, this paper introduces the idea method using
the tool. The important things are to understand the ability of the element technology value-neutrally, and set an
attractive social value which the company pursues through their business. Thus, the company is able to practice thecore technology strategy from a long-term perspective.
Key Words: MOT (Management of Technology), Core technology strategy, Value dimension creation, VBridge,
Category branding

1. Introduction : A Chain of Negativity
that must be Severed
In recent years, Japanese manufacturers from allindustry types are facing the problem of commoditization
head on. Commoditization is when it becomes difficult
to differentiate between the true essence of products
and services and customers can hardly tell one from the1)other, leaving price the only criteria for competition . It is2)believed this is a result of homogenization due to higher
technical standards of manufacturers across the board andthe lowering of obstacles to market participation through3), 4)
the advancement of modularization .
The author conducted an open-response questionnairetargeting the management of executives of various
manufacturing companies in order to confirm the actual
state of affairs of which those companies are facing
to. It was apparent that, for many industries, a chainof negativity was occurring consisting of, as shownin Fig. 1, “intensification of cost competitiveness →response to cost reduction → organization managementwith no leeway therefore an inability to produce attractive
products → further worsening of cost competitivenessdue to increased commoditization.” It can be said that, inorder to sever this chain of negativity, there is a pressing
urgency to newly create a point of focus unrelated
to price that attracts consumers due to offering newvalue, thus escaping the commoditization issue. This
paper discusses MOT (Management of Technology)
as an important means to creating attractive value by2

using technological capability as an asset and briefly
describes a method of conceiving ideas that leverages
the unique characteristics of a certain core technology.

Intensificationof costcompetitiveness

Nonstopcommoditization

Endless
cost reduction

Unable to engage
in innovative
product development

Fig. 1 Negative chain should be cut off

2. The Importance of Value Dimension Creation
2. 1 The Importance of MOT and Issues with its
Implementation
After the importance of value creation was recognized,
MOT has been attracting much attention since the turn ofstthe 21 century. MOT is “management by a technologydriven corporate or organization based on identifying
the potential of technology to achieve sustainable
development, converting this to new business and creating
economical value” and it is also a popular theme in
5)
Japan . One aspect particularly recognized as a core

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−Core Technology Strategy from a Long-term Perspective−

technology strategy is the importance of increasing ROA(return on assets) by utilizing a company’s proprietary
technology for a wide-range of products.
The university with which the author is affiliated,
Nagoya Institute of Technology (NITech), was the firstin Japan to offer an MOT major in 2003 and the author
was a professor of the graduate school subject, MOT
Exercises, for 13 years. The components of this subject
were to present the class with the core technology forconsideration that year at the beginning of each session
for the first semester, then have the students divide into
teams and complete the following activities over thecourse of six months; (1) Examine the nature of therelevant technology (2) Investigate new applications forthe said technology. To date, various core technologies,
including RFID (radio frequency identifier) andphotocatalyst, have been the subject of these groupwork
exercises, which adopt a PBL (problem-based learning)approach.
The MOT Exercises subject is the drawcard ofthis major and an annual success. However, despite
new students enrolling each new year and different
core technologies for consideration, the author was
perplexed by the same problem. Specifically speaking,most of the ideas which utilized the core technologies
being considered could not exceed the scope of merely
achieving “higher efficiency” by honing the existing
paradigm of QCD (quality, cost, delivery). In the
overwhelming majority of cases, ideas either (1) focusedon existing problems (or problems that were clearly
imminent) or (2) aimed at improving QCD using moresophisticated methods to achieve products which arelighter, thinner, shorter, smaller, increase efficiency or
productivity, achieve labor-saving, automation, unmanned
production, prevent human errors and so on. Thisphenomenon is not only relevant to the exercises targeting
graduate school students, but is also quite prevalent at thecompanies the author conducts training at. This type ofidea is nothing more than an improvement based on an
existing paradigm and therefore it is difficult to produce
new attractive values such as the creation of innovative
work styles and lifestyles, or obtainment of entirely newcompetitive factors for corporate customers.
Japan is grappling with many issues it must findsolutions for, such as global warming, energy-related
issues, and an aging society, and no one can deny ideas
to “better realize solutions for existing problems apparent
to all (or problems foreseeable by all).” However, therelationship between “QCD improvements (higher
efficiency)” and “the user benefiting from effectiveness”
is not linear and it has been pointed out that an increase inefficiency exceeding a certain level may trigger problems
6)such as “indifference quality” and “excess quality .”A typical example of this can be found in the compact

JTEKT ENGINEERING JOURNAL English Edition No. 1014E (2017)

digital camera market which fell into a state of extreme
commoditization as a result of endlessly competing for
better quality images due to customer demand. If pricerelated pressure continues to intensify in the market
despite improved QCD, something needs to be sought
to replace value creation reliant on increasing efficiency
within an existing paradigm.

Improvementtype ideas

Improvementtype ideas

Improvementtype ideas

Increase QCD within theexisting paradigm (higher efficiency ideas)Corecapabilities

Fig. 2 Current state of value creation

2. 2 The Difference between Value Creation andValue Dimension Creation
The importance of value dimension conversion isa much theorized topic and statements include; “theessence of innovation is about changing the performance7)
dimension ”, “existing competition can be renderedmeaningless by converting those value dimensions widely8), 9)
established in society to new value dimensions ” and“converting value from a competitive axis already existent10), 11)”. Somein the market to a new competitive axis
examples utilizing the forged component manufacturingmethod include diverting from the conventional
competitive axis for golf clubs of “hitting the golf ballfar” to a new value dimension of “hitting the ball withease.” Likewise, hair dryers could focus on a completely
new value by diverting the existing competitive axis of“drying hair without creating damage” to “create beautiful
hair from the inside simply through everyday hair dryeruse.” Another example would be ICT construction
machinery in the construction machinery sector which
had previously competed on physical performance factors
such as durability and fuel economy. However, ICT
construction machinery offers the new value dimensionof “managing progress of the overall construction site
in real-time” in the form of a package comprising of ahydraulic pressure shovel equipped with a 3D stereo
camera and a construction management system (Fig. 3).

3

−Core Technology Strategy from a Long-term Perspective−

Former value
New value dimension
dimension

The core capabilities
supporting newvalue dimensions

Golf club

Hit the ball
Hit the ball with easefarForgedcomponent
methodHair dryer

Dry hairwithout
damaging

Firm hair from within Nanoe technology

Hydraulic shovel Eﬃcient fuel Real-time management(+ construction consumption of overall construction 3D stereo camera
management system) (fuel-saving)site progressFig. 3 Conversion of the value dimension

In order to escape commoditization, it is necessary to
clarify the difference between value creation and value
dimension creation. Excluding new markets, competitiveaxes already exist on markets in some way, shape orform. The improvement of achievement levels on an
existing competitive axis is a matter of OE (operational
8)
effectiveness), which is something separate to innovation(Fig. 4). In this context, no matter the extent oftechnological innovation to realize “better fuel efficiency”
or “lightweight products”, it cannot be considered true
innovation. Attention must be given to the point that theemphasis is on “value dimension creation”, not simply“value creation.”

n
eatio

Existing
competitive axis

e Cr ting
Valu ce exis xes an
ea
Enh petitiv nhance
comrther efu

A paradigm shift meanschanging the rules of the gameParashift digm

Ne
w

N
c
fro ew om
m va pedi lue titve d iv
rte im ed en axva s
lu ion iseand his colleague, Osamu Eryu (current NITech ViceChancellor) with the aim of eradicating ideas bound by
the perspective of “fixing something that is not right (i.e.
a problem)”.

3. VBridge: The Execution of Core Technology Strategy
through the Visualization of Thought Processes
VBridge is a technical expression for the visualizationof thought processes. It was independently developed by
NITech not in order to better achieve existing items, but
in order to refine the ability to conceive new ideas withemphasis on discovering new areas. The VBridge method
is used when teaching the MOT Exercises subject at
NITech, as well as when the author holds training sessions
for companies. This section will examine the example ofnanoe technology developed by a certain electric home
appliance manufacturer and discuss the thought process
sought of core technology strategy utilizing VBridge.

3. 1 Case Study Overview
The core technology used for the case study iselectrostatic atomized water generated by cutting-edge
nanotechnology. By applying a high voltage to airborne
moisture, nano-sized ions are created, including OH
radicals (highly-reactive components) which are easy
to use in various substances. In general, OH radials are
not believed to last long due to being highly oxidant,
however in the case of nanoe technology, the OH radicals
are encapsulated with water, thus they have an extended
life and can be utilized across a wider scope. The mainfeatures of nanoe technology are (1) approximately
1 000 times more moisture than regular negative ions (2)up to 480 billion OH radicals generated per second (3)a lifespan around six times longer than regular negativeions, (4) weak acidity.
5 nm - 20 nm

Value Dimension Creation

Creation of a new axis
to replace an existing
competitive axis

ーー

Fig. 4 The difference between "value creation" and"value dimension creation"

4

ー

OH
ー
Electron

But the creation of value dimensions is not as easy
as it sounds. As mentioned in the previous section, thereason why Japanese are inclined to approach ideas fromthe perspective of “fixing something that is not right(i.e. a problem)” can be traced back to our origins as a
farming civilization. The line of thought that ongoing
improvement within existing paradigms is right could
be our implicit set of values. As such, this paper will
introduce a tool called “VBridge” (Value Bridge), which
was jointly developed by the research teams of the author

Water particleーー

OH radical

Fig. 5 Schematic diagram of nanoe technology

To focus on antimicrobial action as one benefit ofnanoe technology, bacteria is minimized by (1) the
nanoe water particles reaching the bacteria, (2) the OH
radicals removing the hydrogen in the bacteria, then (3)changing the hydrogen of the bacteria into water. Bacteria

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−Core Technology Strategy from a Long-term Perspective−

can be replaced to dead mite bodies/excrement, pollen
antigens and ammonia. Meanwhile, nanoe technology
is also effective on viruses such as seasonal influenza
viruses and new virus strains. In short, it is a technology
which removes hydrogen from matter. A wide variety
of products utilize this unique characteristic of nanoetechnology, including air purifiers, air conditioners,
dryers, washing machines and refrigerators, therefore it
serves as a fine example of core technology strategy.

3. 2 Points Leading to Value Dimension Ideas
Here, the author would like the reader to consider a
new idea utilizing the unique characteristic of nanoetechnology. Typically, this is done using recursive ideas
based on a categorical conceptual structure which asks
questions such as “What kind of allergens could hydrogen
removal apply to apart from pollen antigens and dust mitebodies/excrement?”, “What kind of virus could hydrogen
removal apply to other than seasonal influenza viruses,
new influenza strains, avian influenza viruses and petviruses?” and “What kind of malignant substance otherthan allergens and viruses can you think of?” (Fig. 6).
These types of ideas are core technology strategy ideas.
However, as long as one thinks within this paradigm it
can be easily predicted that the conclusion will be an idea
along the lines of “nanoe technology to tackle somethingbad.” It would be difficult to conceive an idea such as thehair dryer introduced in Section 2. 2.
One point to effectively conceiving an idea is to capture
the unique characteristic of the core technology with avalue-neutral expression of capability (Fig. 7). In contrast
to value-laden expressions with concrete applications suchas “removing hydrogen from allergens” and “removinghydrogen from viruses”, a value-neutral, variable type
expression would be “addition or subtraction of hydrogenmolecules from the subject matter”, and this expression
is an abstraction of the aforementioned concrete
expressions. This type of value-neutral representation ofa technology’s capability increases the conceptual degreeof freedom and gives a person more leeway to discover
new value. For example, “forming disulfide bonds” is aninspiration which clearly differs from the existing set ofvalues. The important point is to conceive new value froma variable. If a new value was conceived from an existingvalue, the character of the existing value would have astrong impact. In the case of pollen antigen and dust mitecorpses/excrement, these words themselves are negative,
therefore any new ideas based on these concrete values
would naturally only invoke a framing effect which would
lead to new negative elements.
Inhibit malignant
substances
Remove hydrogenfrom allergens

Remove hydrogenfrom viruses

Remove hydrogenfrom ethanol gas

Form disulfidebonds

Add or subtracthydrogen molecules ←Capability of nanoefrom the subject matter technology based onvalue-neutral representation

Fig. 7 Idea based on value-neutral representation ofcharacteristics of core technology

However, it is not easy to inspire ideas from merely
increasing the degree of freedom. Whether or not a person
will conceive an innovative idea is up to that person’s
gut feeling. Even if the idea of “forming disulfide bonds”
mentioned earlier should be conceived, there is no reason
for it to be.
Here, another point emphasized by the author is thesocial value theme which companies aim for throughbusiness. The new idea of “forming disulfide bonds”
could be conceived by investigating a new way to leveragethe value-neutral representation of “adding or subtractinghydrogen molecules from the subject matter” by focusing
on hair maintenance as part of the daily routine from theperspective of the social value theme of “helping busy
working women to stay beautiful” (Fig. 8). From here, theidea of “forming ion bonds” can be conceived by focusing
on weak acidity as another unique characteristic of nanoetechnology. From here, a hair dryer was developed which
offers the new value dimension of “strengthening one’s
hair structure to create beautiful hair from the insidesimply through the everyday act of drying one’s hair.”
Aside from the abovementioned “helping busy working
women to stay beautiful”, let us now contemplate thesocial value theme of “turning ordinary into special ”.

Inhibit malignant
substances
Remove hydrogenfrom allergens

Deactivatepollen antigens

Degenerte
dust mitebodies/excrement

Remove hydrogenfrom viruses?

Seasonal
influenzavirusesNew
influenza
strainsAvian
influenzaviruses?

Pet viruses?

Fig. 6 Idea based on the categorical conceptual structure

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−Core Technology Strategy from a Long-term Perspective−

Turn busy people
into beautiful people

Luxury in
everyday life

Minimize adverse
effect on thehuman body

Efficient hair care

Minimize adverse
effect on thehuman body

Promote positiveeffects on thehuman body

Inhibit malignant
substances

Create structural
bond within hair

Inhibit malignant
substances

Prevent discolorationof fresh produce

Remove hydrogenfrom allergens

Form disulfide
bonds

Remove hydrogenfrom viruses

Remove hydrogenfrom allergens

Add or subtract hydrogenmolecules from the subject matter

Remove hydrogenfrom viruses

Remove hydrogenfrom ethanol gas

Add or subtract hydrogenmolecules from the subject matter

Fig. 8 Idea of starting from the social value theme

From the perspective of this social value theme, if ways
to leverage nanoe technology’s unique characteristic ofadding or subtracting hydrogen molecules from matterare investigated, a new value dimension for refrigeratorsof “protecting food by breaking down ethylene gas, thecause of deterioration and discoloration (thus extending
the period for which fresh fruit and vegetables can beenjoyed)” are conceived of.
To summarize the above, two points for the effective
implementation of core technology strategy are (1)interpreting the core capabilities of a company froma value-neutral stance and (2) using the social value
theme which companies aim for through business as thestarting point of ideas. The previous chapter touched
upon people’s tendency to become preoccupied bysolving problems when investigating ideas to leverage
a company’s core capabilities. The key to abandoning
this status quo is to grasp “technological capabilities
represented in a value-neutral way” in one hand and“social value theme which companies aim for throughbusiness” in the other hand. Then, if we put both of ourhands together, we can expect to conceive an attractive
idea and become a step closer to realizing the theme
being aimed for (Fig. 9).
To that effect, “VBridge” was jointly developed by the
research teams of the author and his former colleague,
Osamu Eryu (current NITech Vice-Chancellor) as
a conceptual tool (Fig. 10). VBridge is designed tothoroughly convey market orientation to people working
in R&D departments (who tend to think inside the box in
the technical world) as well as ensure people working insales and marketing departments (who are market savvy)
become conscious of their company’s core capabilities.

6

Stars in theother hand(1)
From the starting point of “vision”(what we aim to become),
review what we actually already have

Improvementtype ideas

Improvementtype ideas

Improvementtype ideasCorecapabilities

New
value

VisionSocial value theme
which companies aim
for through business← Give value to technology
allowing us to get closer tothe stars(2)
Give value to core capabilities
to achieve the high-level realizationof the vision

Improvement-type ideas
focused on problems
in front of us
Core capabilities in one hand

Enforcement of value-neutral representation

Fig. 9 Core technology strategy from a long-term perspective

VBridge also serves as a communication tool tofacilitate understanding between the R&D department
and business departments who sometimes have trouble
understanding one another due to their unique language
styles. R&D departments have a rich vocabulary inregards to the bottom half of the VBridge framework(component/mechanisms, autonomous functions[functions possessed autonomously] and heteronomous
functions [functions generated when a technology isused for a particular application]), however they have atendency to lack vocabulary and understanding regarding
the top half, i.e. the requirement layer and higher. In
contrast, business departments tend to be well-apt at the
top half of the VBridge framework but weak at the bottom
half. The two department types converge at the quality
element layer and VBridge serves to promote dialogue
between the R&D department and business departments.
In this way, VBridge is a tool to nurture engineers
attuned to marketing and sales/marketing people with asolid understanding of their company’s core capabilities.
VBridge is also a tool to facilitate communication
between R&D departments and business departments.
Recently, the author uses the following explanation
when explaining the significance of utilizing VBridge tocompanies.

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−Core Technology Strategy from a Long-term Perspective−

Wish(Co-creation
theme)

Turn busy
people into
beautiful people

Luxury in
everyday life

Path
(Co-creation
process)

Minimizeadverse effect on
the human body

Individual
happiness(requirement)

Inhibitmalignantsubstances

Achievements(quality element)

Removehydrogenfrom allergens?

Promote positiveeffects on thehuman body

Prevent
Creatediscoloration of structural bondfresh produce
within hair?

Removehydrogenfrom viruses

Add or subtract hydrogenmolecules from thesubject matter

Behavior(autonomous
functions)

OH radicals
exist for along time
The OH
radicalat the core?

?

RemoveForm disulfide Ionhydrogen from
bonds
bonds
ethanol gas

Application(heteronomous
functions)

Establishment(components/
mechanisms)

Efficienthair careReachmicro space

Abundant moisture(1 000 times thatof negative ions)

Ultra-finenanosize(5 - 20 nm)

Weak acidity

Fig. 10 VBridge

3. 3 The Essence of Utilizing VBridge
The essence of utilizing VBridge is the expansion of
the problem-solving scope. A problem is when there isa gap between the target and the current status, while
problem-solving is identifying the cause of the gap andimplementing a countermeasure. It is a well-known
fact that Japan’s manufacturing industry has extremely
high problem-solving capabilities. However, it has been
pointed out that the Japanese also tend to prioritize
solving problems based on objective data and set the
problem-solving scope too narrow. To put it bluntly, we
often tend to only find localized solutions for a problem
with a much wider overall scope. Concepts within thescopes shown in the abovementioned Fig. 6 can beconsidered typical examples.

Gap＝

Current
statusGap

Goal(Vision)

Wide!
Goal

Current
statusGap＝＝

Current
status

4. “Social Value Themes Aimed for by Business”
as the Key to Ensuring Long-term Success4. 1 Dawn of an Era in which Long-term Customer
Relationships are Difficult to Obtain with CS
Alone

Problem

Narrow!

Ideas utilizing VBridge expand the ability to thinkby making “social value theme which companies aim
for through business” the ultimate goal (Fig. 11).
Avoid stopping at a narrow problem-solving scope andbroaden the breadth of core technology strategy. The
core technology strategy which can be expanded out to awide-range of products can be implemented from a longterm perspective by utilizing VBridge. It can be said thatthe ability to create happiness that never before existed(creation of joyful things) in addition to solving problems(solving troublesome matters) depends on one’s ability toutilize VBridge (Fig. 12).

Goal

Problem

ProblemTake the problem-solving
scope which tends
to get narrow...

and widen it dramatically tosignificantly increase opportunities
to utilize core technologies

Fig. 11 Expansion of the problem-solving range

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These days, the cost of obtaining new customers is
said to be around five to 20 times the cost of maintaining
existing customers. Against this backdrop, forming
long-term customer relationships is said to be of grave
importance in the marketing of today. In the past, thestrength of loyalty meant the same as the strength of acustomer’s intention to continue purchasing (ongoingpurchase intention). However, an accumulation ofmarketing research from the 1980s onwards shows that,in addition to ongoing purchase intention, loyalty is aconcept which indicates overall intentions of behavior

7

−Core Technology Strategy from a Long-term Perspective−

Wish(Co-creation
theme)
Path(Co-creation
process)

Minimizeadverse effect on
the human body

Individual
happiness(requirement)

Inhibitmalignantsubstances

Achievements(quality element)?

Minimizeadverse effect on
the human body

Individual
happiness(requirement)

Inhibitmalignantsubstances

Achievements(quality element)?

Removehydrogenfrom allergens

Minimizeadverse effect on
the human body

Individual
happiness(requirement)

Inhibitmalignantsubstances

Achievements(quality element)?

Removehydrogenfrom allergens

Removehydrogenfrom viruses

Efficienthair care

Prevent
Creatediscoloration of structural bondfresh produce
within hair

Abundant moisture(1 000 times thatof negative ions)

Ultra-finenanosize(5 - 20 nm)

Weak acidity?

(ii)
setting the goal of realizing
a social value theme

Reachmicro space

Abundant moisture(1 000 times thatof negative ions)

Ultra-finenanosize(5 - 20 nm)

Weak acidity?

?

RemoveForm disulfide Ionhydrogen from
bonds
bonds
ethanol gas

Add or subtract hydrogenmolecules from thesubject matter

Behavior(autonomous
functions)

OH radicals
exist for along time
The OH
radicalat the coreReachmicro space

Turn busy
people into
beautiful people

Application(heteronomous
functions)

Establishment(components/
mechanisms)(iii)
expand thescope of the
problems
whichshould besolved?

RemoveForm disulfide Ionhydrogen from
bonds
bonds
ethanol gas

OH radicals
exist for along time

Promote positiveeffects on thehuman body?

Efficienthair care

Prevent
Creatediscoloration of structural bondfresh produce
within hair

Behavior(autonomous
functions)

Luxury in
everyday life

Path
(Co-creation
process)?

Turn busy
people into
beautiful people

Add or subtract hydrogenmolecules from thesubject matter

The OH
radicalat the core

The OH
radicalat the core?

RemoveForm disulfide Ionhydrogen from
bonds
bonds
ethanol gas

OH radicals
exist for along time

Application(heteronomous
functions)

Establishment(components/
mechanisms)

Wish(Co-creation
theme)

Removehydrogenfrom viruses

Removehydrogenfrom viruses

Efficienthair care

Prevent
Creatediscoloration of structural bondfresh produce
within hair

Behavior(autonomous
functions)

Promote positiveeffects on thehuman body?

?

Add or subtract hydrogenmolecules from thesubject matter

Luxury in
everyday life

Path
(Co-creation
process)

Removehydrogenfrom allergens

Promote positiveeffects on thehuman body

Application(heteronomous
functions)

Establishment(components/
mechanisms)

Wish(Co-creation
theme)

Turn busy
people into
beautiful people

Luxury in
everyday life(i)
By taking a narrowproblem-solving scope andReachmicro space

Abundant moisture(1 000 times thatof negative ions)

Ultra-finenanosize(5 - 20 nm)

Weak acidity

Fig. 12 Expansion of the problem-solving range in VBridge

8

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4. 2 Breaking the Mold of “Single-ProductCompetition” through the Social Value Theme

towards a brand, including intention to cooperate,intention to interact and intention to recommend 12)(Fig. 13).
Interestingly, it seems that the formation of loyalty is
not only affected by the level of satisfaction towards the
product or service a consumer is currently using, but alsostrongly impacted by the consumer’s empathy towards
the brand vision. According to Matsumura and Kato, if
the formation of customer loyalty purely depended on CS(customer satisfaction), the consumer would attempt toobtain more items other than the one he or she is currently
using (intention to expand items) however this is not thecase (Fig. 14). This means that the line of thinking which
overemphasizes CS will not improve customer share.
It can be said that we have entered an era in which it isextremely important to consider the social value theme of“what are we aiming to realize together with customers
through our business” in order to build a good customer
relationship spanning the long-term and ensure customers
accept a high number of a company’s products and/or
services.

Intention to Intention torecommend
continue

In the previous chapter, it was stated that the social
value theme of “helping busy working women to stay
beautiful” affected the core technology strategy ofnanoe technology, which resulted in the emergence ofan innovative hair dryer. However, other products can beassociated with this theme. These include night steamers,
leg massagers, scalp care, eye area care, warm beauty
roller and products other than the hair dryer that havecreated a “beauty home appliance category” bundlingthe realization of many different themes under the widersocial value theme of “helping busy working women tostay beautiful”.
Single-product competition (the practice of competingon a single-product level) is a thing of the past. As longas individual product performance is the focus, theproblems of differentiating between specifications andprice with competing companies’ products will persist. If
companies with technological capabilities unanimously
practiced single-product competition, there is no doubt

Intention torecommend

Intention tocontinue

Loyalty

Overall level of satisfaction
towards products/services
Individual evaluation of therespective functions and featuresof products and services

Empathy with a company’ssocial value theme

Expectation
towards the
futureSatisfaction
towards current
statusUnderstanding the strength of a company
to realize a social value theme

Fig. 13 Formation of customer loyalty

Company A

Strongintention to expand
items in future

0.48

<Y>
Loyalty towards
companyWeakintention to expand
items in future

0.86

0.41

0.41

<Y>
Loyalty towards
company

Satisfaction towards
current status

0.70

<X2>

<X1>

<Y>

N=363

Loyalty towards
company

Satisfaction towards
current status
<X1>

N=874

Expectations
towards the future

Satisfaction towards
current status<X1>

Company P

0.86

−0.05

0.92

Satisfaction towards
current status

<X2>

<X1>

0.37

Expectations
towards the future
0.83

<X2>

<Y>

N=283

Loyalty towards
company

Expectations
towards the future

N=322

−0.11

Expectations
towards the future
0.83

<X2>

Fig. 14 Influence of social value theme on customers' intention to extend products

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−Core Technology Strategy from a Long-term Perspective−that a price war would follow. A critical key to breaking
out of this trap is to form bundles of goods and services
based on social value themes. “Category branding” isthe name given to the concept of forming bundles ofmultiple different products or services which tie back to
an attractive social value theme. Category branding is
not only effective in the context of B2C. Construction
machinery manufacturer, Komatsu Limited (Komatsu)
established the value theme of Smart Construction andcreated a business model offering a bundle of assets
which had been offered on an individual basis up to thatpoint in a “Construction Management Package” and13)
this is a symbolic example of B2B category branding(Fig. 15). The point here is that multiple mutuallycomplementary measures are connected under a single
goal and the assumption is not that these means will
be used by multiple different users, but rather by thesame customer who will collect them all as means torealize a certain value. The development of products
and services as tools to achieve future koto , or “states”(contextual value) for customers not yet in existence andoffering them in a bundle as a category brand rather than
individually will prevent the commoditization created bysingle-product competition and can be expected to give acompany a sustainable competitive advantage.

Fig. 15 Examples of category branding

Goal

Have needs“Want to have XX”

Since the emergence of service dominant logic in
2004, the common understanding amongst marketing
professionals has been that products and services are
merely means to achieve values and do not hold any
14)
intrinsic value themselves . This marketing perspective
claims that the key is what customers become able to dowith the product or service a company provides, therefore
it is important to take up a new perspective on productdevelopment as a means to create new customer behavior.
At the depths of customers’ needs lies “Be” needs,
which are universal, and “Do” needs as means by which
to satisfy the “Be” needs. Furthermore, as a means torealize the “Do” needs, there are “Have” needs which
is “Want to have means to realize XX”. In this way, thecustomers’ acceptance of products and services depends
on the hierarchical relationship between goal versus
means by which the Be, Do and Have (Fig. 16). The focus
since the emergence of service dominant logic has been
the important of creating new “Do” needs of these threelayers which constitute customer needs.
Let’s now focus on the point that the new value
dimension creation examples discussed in Chapter 2of “hitting the ball with ease”, “drying hair without
creating damage” and “managing progress of the overall
construction site with just one piece of construction
machinery serving as the central control tower” are all
creating new “Do” needs (new customer actions). In lightof the new service dominant logic concept discussed
above, attention is gathering around Koto-Marketing as
a new theory for product development which focuses on
16)
creating new customer actions (creation of “Do” needs) .
The following is a summary of the Koto-Marketing
concept.
The development of products and services as tools
to achieve future koto, or “states” for customers not yet
in existence and offering them in a bundle rather than
individually in order to prevent the commoditization
created by single-product competition. The longer theperiod of use is, the more apt the customer becomes atusing a tool and the more they begin to desire new “Do”
needs. Companies revise tools (products and services) tosuit the customer’s level of knowledge and skill and look

These are the most universal type of needs and are also known as “lifeneeds” in the B2C context. They are called “Be” needs due to indicating
what people wish to “Be” or “Become”.

Be needs“The desired state”

Do needs
Goal Means “Want to do XX”“Want to become able to do YY”
Means

4. 3 Representation of Social Value Themes

These are action-related needs indicating “what people want to do” or “wantto become able to do” to satisfy the abovementioned “Be” needs. It equates
to the answer to the question “What do I want to become able to do throughusing products or services as preparation to obtain my life needs.”
These are needs to seek concrete “means” to satisfying “Do” needs. It
equates to the answer to the question “What concrete tools do I want toachieve the abovementioned ‘Do’ needs.”

Fig. 16 Structure of customer needs

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−Core Technology Strategy from a Long-term Perspective−

ahead to the next “Do” needs that will emerge due to theexisting ones being fulfilled then developing new tools
accordingly. In turn, this helps to form a healthy customer
relationship for the long-term (Fig. 17).

Social value themes JTEKT aims for through business
Establishment of self-development type of brand by individual
farmers and expansion based on cooperative management

Develop products or services as tools toachieve an unknown state (koto)
Proposal and inducement of unknown states
Develop products and services as tools to achieve thisOffer a bundle of tools
Continuously develop tools in line with customer’s level of knowledge and skill
Form long-term customer relationships through the co-creation of
koto value (value attached to certain states) over the long term
The point is the approach of “What will make thecustomer happy if they become able to do it?”Fig. 17 Procedure of Koto-Marketing

In other words, it can be considered that KotoMarketing is implying “the ongoing provision of tools
supports customer development”. Therefore, a matter of“First, I will become able to do this. Then, I will become
able to do this, and then this…” It can be argued that thekey to forming a good customer relationship that will belong-lasting is the company proposing a process for thecustomer to evolve, then continuously providing the tools
to achieve this process (the products or services as means
to achieving the social value theme) (Fig. 18).
[Means to achieving[Means to achieving[Social value theme whichtheme 1]
theme N]
companies aim for through business]
Product or service
Product or service[Means to achieving
theme 2]
Product or service

The 1st Goal The 2nd Goal The 3rd Goal

[Means to achieving
theme 3]
Product or service[Means to achieving
theme 4]
Product or service[Means to achieving
theme N-1]
Product or service[Means to achieving
theme 5]
Product or service

Fig. 18 Category Branding: Bundling products and services
as means to achieve the social value theme

As a result of consideration by project members
in a Value Creation Working Group held by JTEKTCorporation’s Bearing Operations Headquarters in 2015,
the attractive concept shown in Fig. 19 was proposed.
It is believed that if the R&D department also becomesinvolved and discusses this concept proposed by abusiness department it will lead to the creation of new
products and services and have high potential to result in
the acquisition of new business opportunities exceeding
existing business categories.

JTEKT ENGINEERING JOURNAL English Edition No. 1014E (2017)[1st stage]
Cultivation of premium
crops throughenvironmental correction[2nd stage]
Establishment of brandproducts throughhighly efficient work

[3rd stage]
Increase productivity throughco-op and continuously
create brand products

Fig. 19 Consideration by the project members of the bearing
business headquarters of JTEKT

5. Conclusion: The Importance of Forming an Organizational Culture
whereby all Individual Members Participate to Create Knowledge
based on Organization-wide Communication Development
This paper has provided an outline of core technology
strategy from a long-term perspective and introduced
VBridge as the concept tool to implement such strategy.
Based on the author’s experience to date, if a person
unfamiliar with the core capabilities of a company
attempts to establish category branding it results innothing more than a medley of existing products andin fact an extremely high number of cases prove suchan approach does not result in ideas for new products
and services which leverage the company’s proprietary
technologies. A business department well-versed in thecompany’s core capabilities, or an R&D department wellversed in market and social trends, can be predicted to
produce results through planning in isolation. However,
it is quite often the case that the former, (the businessdepartment) does not sufficiently analyze the elementsof the company’s core capabilities, therefore is unable togain thorough insight. In regards to the latter, the R&D
department, it is often the case that members are primarily
concerned with achieving their respective research goals
thus are not particularly aware of external environmental
trends affecting the company. Regarding implementationof core technology strategy from a long-term perspective,
it is desirable that the business department and R&D
department promote investigation using VBridge.
Furthermore, by including the ICT (Information andCommunication Technology) department and service
department in this study, it is possible to cover new
products and services which do not only take advantage
of a company’s core technologies, but also all its
management resources. VBridge is a tool used to devise
new value from a specific core technology (in otherwords, a management resource). Komatsu has expanded

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−Core Technology Strategy from a Long-term Perspective−

the scope of VBridge and developed an original tool
called the “Customer Relationship Chart” aimed atdevising new customer value through combining all of its
17)
management resources . Investigations into finding newvalue with the involvement of all departments and basedon the Customer Relationship Chart can be expected toachieve “category branding through the execution of coretechnology strategy from a long-term perspective.”
Regarding specific projects using VBridge and theCustomer Relationship Chart, rather than be projects
whereby specific members are selected, it would be
ideal to establish a system similar to the “20% Rule”
promoted by Company G where employees use a certain
percentage of their time for projects of their preference,
rather than for their regular work. Then, it is desirable
that the investigation results of each project team are not
only shared with management, but also with other project
teams to trigger mutual inspiration. A fine example ofthis is Komatsu’s annual BM (Brand Management)
conference. Komatsu aims for organization-wideknowledge creation and has established this conference
as an occasion where a dozen or so mixed-department
teams are formed to establish hypotheses based on
regular considerations such as “What is happening in
the external environment influencing our company?
How will it change moving forward?”, “How should
we adapt to such environmental changes?” and “Howshould we embody such policies to adapt to external
environmental changes as organization operations andinternally adapt?” The answers to these questions are thenpresented in the form of recommendations to Komatsu’s
management executives, as well as the heads of all major

departments. These recommendations are effectively
utilized as material when Komatsu’s management teaminvestigates the company’s future business strategies andcan be considered one way of promoting companywide
core technology strategy from a long-term perspective.
One symbolic example is the category branding of “Smart
Construction”, which was publicly announced in January
2015.
It is said that large-scale corporations compartmentalized for the sake of operational efficiency now
face the issue of vertical department and are unable tocreate organizational knowledge as they would like inorder to adapt to the changes in the external environment
influencing the company. As long as the mission of eachdepartment is to achieve its own milestones, it is only
natural that this will take first priority. In the same waythat it is the capillaries which support the individualorgans which make up the human body, the key toorganically connecting the respective functions of thedepartments which make up a company is “organizational
communication”. To companies aiming to shift towards
the service sector from a manufacturing base or
monozukuri (Japanese-style manufacturing) from value
chain business and solution focuses, it can be said thatthe creation of organizational knowledge through crossdepartmental communication is essential. One of the threemost basic concepts of TQM (Total Quality Management)is getting all members involved to bring together anorganization which has been compartmentalized thenleverage all management resources owned by a company
through cross-departmental communication and create acompetitive edge.

Be the employer of choice to professionals as theworld's leading copper mining company

A strong company foundation not susceptible ...........................
Missionto changes in the business environment

Maximize investment income
Reduce machine
maintenance costs

Prevent
breakdowns

Miningmachinery

Increaseproduction volume

Preempt andprovide customer
requirements

Don't stop
the machine

Guarantee
machineoperation(R&M agreement)

Service/parts
framework

Don't stop
the job site

Co-manage
customerbusiness

Financefunction..................................................... Vision

All concerned
people contributeto enhancement of
production volume

Komtrax

Minimizebusiness risk................................... Goal

Grow customers' .................
Determination
business

Centralized
managementof all machines
owned

Make unmannedmine operation ........ Capability
possible

Mine
Executives
AHS
management who understand (Unmanned ........ Assetengineersminingdumps)

Fig. 20 Customer relationship chart developed by Komatsu

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−Core Technology Strategy from a Long-term Perspective−

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