Product development for emerging market: Denso’s challenge for changing headquarter organization

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Type de publication:

Conference Paper

Auteurs:

Heejin KIM

Source:

Gerpisa colloquium, Paris (2013)

Résumé:

The main question of this research is how a firm changes its product strategy and the way of product development under the dramatic changes of global economic environment. This research question became very important to man Japanese firms that have long been targeted customers in advanced countries. Because, since the Leman shock of 2007, many Japanese firms should expand their business into emerging markets for their growth, which means they got to need new product strategy and line-ups. However, it’s not that simple for a huge and old organization to switch the product line-ups and the way of product development accordingly. What are the challenges and how firms solve these problems?

To answer the questions, I conducted researches on Denso, a Japanese global auto-parts supplier. Especially, I focused on DP-EM (Denso Project for Emerging Market) activities, that Denso set up for developing products for emerging markets.

The project includes largely four activities such as bench-marking, market research, management for new product design and development, and marketing. In the process of three years’ project, they experienced various challenges and organizational tensions. The achievements of the project can be summarized as follow. Firstly, new line-ups of 23 products are developed as a result, that already get business contracts with 14 models of automobiles in China, India, ASEAN, South America. Secondly, the organization could learn a lot about emerging markets and the real needs of customers in the market. Thirdly, through the project, engineers of Denso headquarters could change their mindset about market and customers. Fourthly, the headquarter organization could rearrange communication channel with local subsidiaries that have the most important market information and customer knowledge.

This exploratory research concludes that headquarter organization should change itself in many ways before or during globalizing their product development functions to respond to local customers.

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