Rhizome management: shifting away from fibre (1994)

The strength of a company that does not chase scale

The heart of this shift was that Kuraray stopped competing for scale on the same ground as the majors. A cool reading of itself — that it could not win by matching Toray and Teijin capacity for capacity in commodity fibre — produced the decision to concentrate resources on high-value, proprietary products less exposed to swings in the market. Rhizome management, branching derivative products out of a few base technologies, was also a mechanism for spreading limited R&D across several markets without waste. That Kuraray’s profits fell least of all its peers in the slump after the bubble can be read as years of choosing quality over scale converting into resistance to recession.

The pattern is not universal, though. As the repeated withdrawals from parachute ventures far from its core technology showed, stepping outside the rhizome came with failure. An insistence on originality is, turned around, a choice to keep avoiding the large main battlefields, and there is a natural ceiling on the speed of growth that follows. How to remain a big carp in a small pond and still go out into a larger sea for growth — that was the question Kuraray faced next, having built a constitution strong enough to survive recessions.