Realizing the Shift Towards Closed-Loop Recycling : Strategies of the Japanese Firms

A sign of the shift towards closed-loop recycling has emerged in Japan. By referring to eight firms in the "film with lens", electronic photography, and electric and electronic appliances industries, this paper demonstrates how and why these firms have adopted recycling strategies. Our observation identifies the industrial taxonomy which determines a particular type of corporate strategy, based on three factors: market structure; user characteristics; and technological characteristics. First, a dominant firm, with profits due to the market structure, can bear the cost of recycling privately, while no surplus profits accrue to firms in a competitive market. Second, the type of uses, i.e. end users or system users, influences the firm's cost of recovering products. Third, the match between the pace of a product's technological changes and its life-span determines the technological possibility of recycling