Tilting into rechargeable batteries — a bet on the next pillar (1990)

Whether you can back the next pillar precisely as the core sinks

The heart of this decision lies in continuing to direct about a fifth of the whole company’s capital spending into batteries — a line long treated as a sideline — even as the core audio-visual business sank into recession. Behind the move to lift a business once considered for spin-off into the company’s very core, on a reading that the growth market was about to arrive, stood the founding family’s history of nurturing battery work on Awaji Island and the technology and customer base built up since the mass-production of nickel-cadmium cells in 1964. What marks this tilt of investment is that it concentrated resources on the next pillar not from the surplus of good times but at the very moment the core was struggling.

That said, as the parallel bets on nickel-cadmium and nickel-metal-hydride show, the balance between concentration and dispersion is never easy to strike. The task that executive vice-president Kimoto called “narrowing the strategy” would only grow heavier afterward. Rechargeable batteries would in time pass the lead to lithium-ion; Sanyo’s battery business kept growing as the company’s chief earner, and even after Sanyo came under Panasonic at the end of the 2000s, batteries carried on as a core business of the group. This choice — to identify a growth field and concentrate resources on it while the core was shaking — can be read as a case that put, early on, the question of when in the cycle to decide to reshape a business portfolio at the centre of management.