It is often noted that a specialized manufacturer (or “specialist”) is more competitive than a generalized manufacturer (or “generalist”). This paper examines how a specialist could maintain a long−term competitive advantage, and especially in technological development. An explanatory case study was conducted by comparing a small specialist, Futaba Corporation and a large generalist, NEC, in the vacuum fluorescent display (VFD) industry.
Two types of R&D organizations were identified based on an analysis of firm−level and individual−level patent data: a successive, cross−sectoral, and closely cooperative R&D organization in Futaba, and an R&D organization in which personnel can be flexibly reallocated in NEC. The composition of NEC's four technological VFD fields radically changed, while Futaba Corporation's remained stable. This finding differs from the common understanding that typical large Japanese firms have succeeded in incremental innovation using a close−knit group of engineers. This paper instead demonstrates that the technological capability characteristic of Japanese firms has been maintained by a small specialist.