Self-enforcing of differentiating mechanism and the unintentional result: an examination through studying the competitive history between JS-Ichitaro and MS-Word

This paper discusses ‘Success turns to failure’ mechanism by ‘Self-enforcing of Differentiating Mechanism’. The self-enforcing of differentiating mechanism is a circulating process that makes ‘Differentiating Mechanism’, which is defined as the combination of management resources and the activity systems, stronger through performing the business activities. The paper has two contributions. The first one is to make a model that describes the mechanism which the market share of the focal company that has grown up is being deprived by the rival that has been leveraged by the self-enforcing of differentiating mechanism of the focal company. The self-enforcing process is not easily stopped even if it makes favorable conditions (situational characteristics) for the rival. Therefore, the mechanism of the market share reversal can be said to be the result of ‘excessive’ self-enforcing process of the differentiating mechanism. The paper presents a case study of the competitive history between JS-Ichitaro and MS-Word in Japanese word processor software market. This case analysis offers a new interpretation of the mechanism of the market share reversal of MS-Word with JS-Ichitaro, which is widely believed according to the monopolistic power of Microsoft Corporation in the market of operating system. The proposal of this new interpretation is the second contribution of the paper.