A study on the business strategy of highly profitable electronic component manufacturers

This paper aims to analyze the source of competitiveness of highly profitable electronic component manufacturers from perspective of product characteristics and patent information. In the electronic component industry, on the one hand there are some companies having a high ratio of operating profit on sales for a long period of time, but on the other hand there are many companies remaining low profitability. Therefore, the fact is that profitability ratios differ widely according to the company. Firstly, the case analysis of Keyence, a leading factory automation manufacturer, and Hirose Electric, a leading connector manufacturer is conducted from perspective of product characteristics and patent information. Secondly, the differences and similarities between these two companies are clarified. Thirdly, some factors delivering competitive advantage to these two companies have been analyzed by two distinctive strategic management approaches: Porter's five forces analysis and Barney's resource- based view. Finally, the implications drawn from these analyses are discussed, and the issues for future research are posted.