ABSTRACT
Topcon Corporation was founded in 1932 as the Tokyo Optical Company, Ltd. The Hattori Watch Company, which subsequently became Seiko Watch Corporation, owned most of its shares. The two market leaders, Topcon and Nidek, competed on quality and functionality. Topcon sold only high-technology, high-margin products manufactured in low volumes. The decision to specialize in low-volume, high-margin products stemmed in part from the firm's experience with manufacturing and marketing cameras, a high-volume, and low-margin consumer product. Topcon's production control system comprised two major subsystems: the turn-out-value system and the total productivity program. The selling price of new products was set by taking into account both customers' demands and competitors' offerings. The ophthalmic business unit planning group set the selling price of Topcon's products. This group was responsible for determining the general strategic direction of each product. Topcon's strategy was to develop a patent barrier to create a technological advantage over its competitors.
