R&D management issues for small to medium sized technology oriented manufacturing firms: A case of material development for dental application

This paper discusses R&D strategy for a small to medium sized technology oriented manufacturing firm. Specifically, issues to catch up the top runner and to establish competitive advantage will be discussed based on a case study of Yamamoto Precious Metal Company Ltd. This company was originally established as a retailer of gold material more than 55 years ago, but it changed its business model to manufacturing company. Major businesses were refinement and processing of precious metals and production of precious-metals alloy for dental application. In accordance with market requirement changes, the company expanded the product portfolio to ceramics, and resin material keeping the application domain same. The company was late to deal with composite resin which is popular material used in dentists. The composite resin system is composed of main body and interface to the tooth. Existing players provide the main body and the interface separately. Typically the interface material is profitable as opposed to the main body. In order to get in this business, Yamamoto Precious Company is developing unified material to integrate two parts. This will reduce dentists´ burden tremendously at the cost of profitability for the manufacturer. The R&D strategy which can be categorized as a destructive innovation will be discussed.