How stickiness to low-end markets leads to innovation: Co-evolution between Brother Industry Ltd. and Brother International Corp. USA, 1908–2000

Abstract

This article analyses the history of Brother Industry Ltd. (BIL) to propose a new take on the conventional wisdom surrounding the internationalisation of Japanese companies – a common understanding that the key factor behind Japanese firms’ successes in establishing an international competitive edge was how the companies’ headquarters in Japan implemented a powerful combination of control and integration over their international distributors and moved up from low-end markets to high-end markets through unyielding technological development. By exploring the case of BIL, we locate a different path to growth where highly autonomous local subsidiaries sought to remain in low-end markets and thereby assisted their companies to develop into innovative global companies.