VAIBHAV SURANAA

Section E |Roll no.16373

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