Prof. NAKATA CASE STUDY: Strategic Investment in LCD Industry
Q.1: Please describe the investment strategies for LCD production lines of Japan, Korea and Taiwan respectively.
According to the case study, as Japan introduced the LCD technology to the market, it could take the competitive advantage in 1999 and 2000. Therefore, Japan made about 3 times amount of investment of the average year in 2000. However, when the LCD line operated in 2001, the demand had already fallen and the big loss was added up. The amount of the investment was maintained as from 2001, and the decision of the large investment was not made until the beginning of 2004. Also in the case of Taiwan, the LCD industries of Taiwan invested 550 billion yen in 2003 using financing from outside, which was more than 10 times of their profits. It was 4 times of Japan’s investment in 2003. Therefore, the share of the LCD production capacity of Taiwan will be expanded to reach to that of South Korea.
Q.2: Please describe the reason why only Sharp Corporation could invest to 6th-generation LCD production line in Japan.
While other Japanese industries were suffering from losses of producing LCD, only Sharp Corporation could invest to 6th-generation LCD production line in Japan. And it invested in 6th-generation LCD production line. The LCD factory was started in January, 2004 and it has an advantage of the establishment of the LCD panel factory and the LCD television factory in the same site. Therefore, it enabled to produce from production of the LCD panels to the assembly of the LCD television consecutively. While American major electricity makers RCA stopped their research of LCD, Sharp Corporation continued the research of the LCD. After all the hard working, they realized to apply the LCD to the electric calculator, which is in fact the world’s first LCD display to the market. Then, they created many product...