How Can a Company Continue an Unprofitable Business?

Why do companies continue to invest in projects in the red and in areas from which competitors exit successively? Many companies have exited the two-layered copper clad laminate (CCL) market, which is part of the greater electronics material market. Among companies in that market, Nippon Steel Chemical continued to operate and became successful despite running a deficit for more than 10 years. Like the company’s competitors, Nippon Steel Chemical has considered halting investment in research and development of two-layered CCLs. However, the company decided to continue investing because it implemented a system for making decisions that emphasizes assessments of potential major customers, in addition to its own standard internal assessments.

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