Kimura KK Case

Kimura KK had become a major Japanese player in media replication. The company started by producing video tapes and then moved to CDs. Over the last years, Kimura KK had focused on blank media and it had accepted several contracts from film studios. The "full concept" production process, among other things, involved cooperating with its customers from concept to finished product and mastering and replication of all CD and DVD formats. Kimura KK was capable of producing 500.000 VHS video tapes, 3.000.000 CDs, 800.000 CD-Rs and 500.000 DVDs per week. The company was hoping that pre-recorded DVDs would become increasingly important in terms of sales. Mr. Kimura, the President of Kimura KK, was an influential figure in the Japanese media replication industry and he was known to keep close contacts with his competitors.

1. What is value for a customer like Kimura KK?

A customer like Kimura KK has a well-defined strategy. For instance, Mr. Kimura expected that the Pramtex technologies would help his firm achieving its objectives, doubling the company sales over the next three years. Therefore, such firms value building strong working relationships.

Although Mr. Kimura indicated to John that Pramtex had the best and most technologically advanced equipment in the market, to customers like Kimura KK, technology was not everything. These customers emphasize many other elements that have to be taken into account.

On one hand, as priority, getting the equipment on time was essential. Such customers value the supplier's ability to meet their obligations, since they also need to win the confidence of their own customers - such as Disney.

On the other hand, quality has to be considered. But price is also very important. In spite of having exceeded Kimura KK's expectations, there were competitors who made a cheaper offer. As it was said by Mr. Hashimoto, Kimura KK didn't need the so-called Rolls Royce of the turnkey DVD production system. Perhaps a simple Toyota Corolla was what they actually needed - Pramtex should have not ignored its customer's needs, since they didn't need a so sophisticated system. These firms also give preference to machines which are easier and cheaper to service and maintain. If there was an urgent problem, Kimura KK's technicians would solve it easily.

Kimura KK was one of the major independent optical disk manufacturers in Japan. A customer like Kimura KK appreciates working with professional suppliers, who can actually give an adequate answer to anything that may happen. Finally, such customers also want a "red-carpet treatment". They really want to feel respected and special. If they don't get the so-called "red-carpet treatment", they may be displeased and it could be easy for them to start thinking in other possibilities.

2. Who are the key players at Kimura K.K. in this picture? What are their respective roles and interests?

The key players at Kimura KK are Dr. Nomura, Senior R&D Advisor, Mr. Kimura, the President of Kimura KK, Mr. Hashimoto, the Finance Director, and Dr. Komoda, the Chief of Production.

Dr. Nomura was the strongest supporter of Pramtex and he was also a close friend of Max Scorse, the key man behind the development of the Spartacus. Despite of being friend of Max, Dr. Nomura was very impressive with the sophistication of Pramtex's system. In this picture, Mr. Nomura had convinced Mr. Kimura to place a first order for three Spartacus machines. I consider him as an influencer, since he supplied information for the evaluation of this specific alternative. In terms of interest, on one hand, he wanted to bring a little more sophistication to Kimura KK. On the other hand, he wanted to help Max, who expected to establish a stronger position in the Japanese market and to use Kimura KK as a reference to get more business from the largest companies. Mr. Kimura was the President of Kimura KK and he had to listen to all sides. He is the decider, the person who actually makes the buying decision. His main interest was to make the best decision to Kimura KK's needs, since within his company they were regarded as easier and cheaper to service and maintain. He was hoping that pre-recorded DVDs would become increasingly important in terms of sales - counting on the purchased system. Mr. Hashimoto was the Finance Director and the only thing he understood in Kimura KK was numbers (he knew very little about technology). For me, Mr. Hashimoto is an influencer and he is also an analyzer. Once he understood numbers, he assessed all of the competitors' offers (in terms of price and delivery times/deadlines) and he was able to influence Mr. Kimura in the final decision, since he supplied prices information. For him, technology was not everything, and he wanted to take into account many other elements, which may positively influence the final decision and Kimura KK's performance in the long run. Dr. Komoda was the Chief of Production and he may be considered as the user. Dr. Komoda had determined the technical specifications he needed for the Spartacus for a planned output of over 15.000 DVDs per day. He insisted that it was critical for him to receive the first three Spartacus machines no later than the last week of July, since he wanted to have enough time to test the brand-new machines before embarking on a major DVD project for Disney. So his main interest was to produce the DVDs in timeframe. Although there's no enough information in the case study, I imagine he may also have been influencer, since he had to report the problems he had with one of the three Spartacus machines. This information had to be taken into account in the evaluation of alternatives.

3. Why did Pramtex fail in Japan? What could/should have been done differently?

The Australian firm was not able to build a strong working relationship with Kimura KK.

Although a fairly recent entrant and a small player in the industry, Pramtex was able to charge premium prices thanks to its advanced technologies and its appeal to customer engineers. But in fact, Kimura KK didn't want these advanced technologies. Mr. Kimura had recognized that Pramtex had the best and most technologically equipment in the market, however, as Mr. Hashimoto said, technology was not everything and the firm was taking into account other elements. Dr. Max Scorse was only concerned with the sophistication of the Spartacus machines. He forgot the real needs of Pramtex's customer and he did not pay attention to the technical specifications list that John handed him. Once it seemed impossible to talk to Dr. Max Scorse, John should have told Dr. Shariff, the President of Pramtex, about this, since Dr. Max Scorse was only making