Executive Management Leadership Ver16. _ “When a Market’s Boom Ends, Continuation Can Still Be the Winning Strategy”

Shigenori Tanaka
5 日前
読了時間: 3分

　　　　　　　　　　　　　　　　　　　　　　　　　　　　Aug 20, 2026

Thank you for reading.

Today’s topic is business strategy in markets where a technological boom has already passed.

In manufacturing, certain technologies rise in popularity and then quietly fade away. At that stage, many companies choose “withdrawal.”

MBA programs and business schools often treat withdrawal as a rational decision, based on portfolio theory and “selection and concentration.”

However, management decisions grounded in real-world experience do not always follow textbook logic. Even in markets where the boom has ended, “continuation” can be the correct strategy.

“Lost Foam Casting” in the foundry industry is a prime example.

1. Lost Foam Casting Was Once Expected to Become the Next-Generation Foundry Technology

Lost Foam Casting spread in the United States and was adopted by many Japanese foundries in the 1980s–1990s. Its ability to form complex shapes in one piece without cores led to it being called a “next-generation casting technology.”

However, due to productivity challenges and difficult process control, many companies failed to mature the technology to mass-production levels and withdrew.

Today, within the overall iron casting industry, Lost Foam is a niche process with a modest market size.

2. What Is Lost Foam Casting? (Process Characteristics)

Lost Foam Casting uses EPS (expanded polystyrene) patterns buried in sand. Molten metal is poured into the sand mold, causing the EPS pattern to vaporize and disappear, forming the final casting.

When the cluster is buried in dry sand and molten metal at approx. 1,400°C is poured through the sprue, the EPS completely disappears, allowing complex shapes to be formed “without cores.”

In contrast, traditional “Green Sand Casting” requires separate core production and assembly inside the mold, which inevitably increases manufacturing cost.

3. Lost Foam vs. Traditional Green Sand Casting (Merits & Demerits)

● Merits of Lost Foam

Coreless production even for complex shapes
No core-related defects (core breakage, core shift)
High yield
Good surface finish
High flexibility in gating design through cluster configuration
Easy shape optimization during design

● Demerits of Lost Foam

Slower production cycle than green sand (major weakness)
Many pre-process steps: EPS molding, coating, drying
Complex process control
Heavy equipment investment
Difficult to ensure repeatability
Requires advanced know-how for mass production

These weaknesses led many companies to withdraw before achieving stable mass-production capability.

4. The Value of Maintaining a Technology Even When Others Withdraw

Even if a technology’s market size is small, if it serves a domain that other processes cannot easily replace, maintaining the technology becomes a strategic resource that supports a company’s existence.

The key is not merely preserving the technology, but combining it with new products and requirements to keep it relevant.

Lost Foam Casting still plays an irreplaceable role for certain products requiring complex shapes or coreless production.

5. Morikawa Industries: A Company That Has Maintained Lost Foam for Nearly 40 Years

Morikawa Industries Corporation (Chikuma City, Nagano Prefecture) has mass-produced complex automotive safety-critical components using Lost Foam for nearly 40 years.

Morikawa’s Unique Strengths

World-class molding cycle (gross 43 seconds) → Exceptionally fast for Lost Foam → Capable of meeting automotive OEM mass-production requirements

Fully integrated process: EPS molding → coating → drying → dry sand molding → pouring → automatic shakeout → Overcame the inherent difficulty of process control

Flexible mass-production system through combined use of “DISA high-speed green sand molding lines” → High-speed green sand + complex-shape Lost Foam coexist

CAE-based casting design capability

Low defect rates and high yield (accumulated improvements over decades)

Morikawa is one of the few companies that has overcome Lost Foam’s typical weakness—slow cycle time— and achieved mass-production capability at automotive quality levels.

6. While Many Companies Withdrew, Morikawa Chose to Continue

Morikawa once considered shutting down its Lost Foam line. However, even after other companies withdrew, customers continued to request Morikawa’s Lost Foam quality.

As a result, Morikawa transformed Lost Foam’s weaknesses into strengths: mass-production capability, quality, and high yield.

This is not merely a technical story— it is a case where continued investment created competitive advantage.

7. Competitive Advantage Exists Only for Companies That Continue

In markets where:

Technical difficulty is high
Practitioners decrease
Entry barriers rise
Customers continue to demand quality

Continuation—not withdrawal—becomes the correct strategy.

Niche technologies like Lost Foam generate competitive advantage through tacit knowledge and accumulated improvements that cannot be reproduced quickly.

8. Management Insight: Even After a Boom Ends, Continuation Can Be the Right Strategy

Business schools emphasize withdrawal criteria and selection & concentration. But real-world conditions are far more complex.

When: