Abstract

The objectives of this research are to describe competitive environment in software industry in Japan and to understand the differences of characteristics among maker-turned, user-turned and independent vendors. Based on management frameworks such as Porter’s five forces and Barney’s resource-based view, we developed the measurement model of environmental threats and competitive strengths/weaknesses. And we conducted factor analysis of the data collected from 100 major IT vendors in Japan. Then we extracted 8 threats factors, e.g., industry stagnation, recruiting bright people, ROI/quality requirement by clients, price cutting/quick delivery request by clients, new technology adoption. Also we identified 6 strengths/weaknesses factors, e.g., human capital, scale merit, expansive business, inimitability, stability. The regression tree analysis suggests that the maker-turned vendors tend to significantly expand business with well-resourced R&D, while the user-turned vendors seem to depend heavily on the demand of the parent companies. Therefore, some of them are thought to gain inimitable capabilities. On the other hand, many of the independent vendors supply people with the principal contractors as the temporary staffing without the specific strengths. However, some of independent vendors with the inimitable asset are thought to be the role model of the software vendors in Japan.

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