From defeat in appliances to vending machines, and a subsidiary that stood on its own (1988)

Which markets to fight in, and which to withdraw from

The heart of this decision was refusing to cling to a market it had lost and shifting people and plant into an adjacent market it could win. In home appliances — a general consumer market — Fuji Electric’s disadvantage as a latecomer against the established majors was not going to be overturned. Choosing vending machines, then a mid-sized business market but one with room to grow, and going in with an integrated structure that carried manufacturing, financing and materials together, turned a half-idle Mie plant into an earner and eventually led to a separate listing for the subsidiary. What supported the turn was the speed with which the company admitted defeat and moved its resources.

Vending machines were not safe either. The soft-drink vending market began to shrink as convenience stores grew, and the business that had once rescued appliances was in turn washed over by the next change in its environment. Even so, the axis of judgement formed in the 1960s — cut loose early from fields where the first movers cannot be beaten, and move to where a latecomer can win — recurs throughout Fuji Electric’s restructurings, down to the carve-outs of substation equipment and logistics. Which markets to fight in and which to withdraw from: the question that began with defeat in appliances runs on into the later choice to concentrate on power semiconductors.