Abstract
Japanese companies have recently been criticized for allegedly failing to compete effectively in the world market for complex telecommunications equipment, and responsibility for their poor performance has been attributed to the ‘NTT family system’ — the formal basis for cooperation between the dominant carrier and a select group of equipment suppliers. This article examines in detail the case of central office switches, and concludes that there is little evidence to support these criticisms. There have been weaknesses and occasional failures in the Japanese system, but it has also had characteristics that may yield long-term competitive advantages.
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