tag:blogger.com,1999:blog-45153847923935516932024-03-08T03:32:53.145-08:00Strategy in BusinessAs globalization develops, formulating a strategy with consideration for the global market is growing important because no company can develop business by focusing only on the respective domestic markets. Scientific thinking needs to replace traditional concepts.Senryaku-kenkyuhttp://www.blogger.com/profile/14407110371838014354noreply@blogger.comBlogger35125tag:blogger.com,1999:blog-4515384792393551693.post-25104376110606280392013-09-30T08:20:00.003-07:002013-09-30T08:24:31.706-07:00No. 35: Secrets of Seven-Eleven’s growth (September 30, 2013)<div class="MsoNormal">
<span style="font-size: large;"><span style="color: blue;"><i><b><span lang="EN-US">Management:</span></b></i></span></span></div>
<div class="MsoNormal" style="text-align: justify;">
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; margin-right: 1em; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="http://www.blossa.jp/images/shop/seven_eleven/20121112_seveneleven_christmascake.jpg" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="153" src="http://www.blossa.jp/images/shop/seven_eleven/20121112_seveneleven_christmascake.jpg" width="320" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;"><span style="font-size: small;">Seven-Eleven creates excitements incessantly.</span></td></tr>
</tbody></table>
<span lang="EN-US">Since the first convenience store was
opened in the early 1970s, convenience stores added new services and functions
to satisfy social demand. Added services include installing an ATM inside the
store and selling movie and concert tickets. As the number of added services
increases, convenience stores have become a vital infrastructure in
daily life. The Great East Japan Earthquake that occurred on March 11, 2011
made people renewed this recognition.<span style="mso-spacerun: yes;"> </span></span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US">The market leader <a href="http://www.sej.co.jp/">Seven-Eleven</a> worked out a
new strategy for further growth. The company focuses on the senior generation and
working women. It will open 1,600 stores in 2014 with an investment of 90
billion yen. Seven-Eleven has 15,800 stores in 42 prefectures at present and
37% share in terms of sales in 2012. With the 1,600 new stores, it plans to
increase the share to 40% in 2014. To develop the market for the senior
generation, it designates each store as the base of door-to-door delivery
service. It introduced Toyota’s COMS to increase the efficiency of the door-to-door
delivery service. It delivers such daily necessities as detergent and packed lunch
to the households of the aged. </span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US">Women account for more than 40% of shoppers
at Seven-Eleven stores, and Seven-Eleven successfully doubled the share of
shoppers older than 60 years old to about 20% in five years. Making the best
use of its delivery system, it started to deliver packed lunches to public
junior high schools in Kanagawa Prefecture. Seven-Eleven has daily average
sales of 668,000 yen per store, while the followers have average daily sales of
a little more than 500,000 per store. Surprisingly enough, only 1% of all
Seven-Eleven stores have daily sales of less than 400,000 yen, which barely
prevents a store from being closed. The strength of Seven-Eleven lies in the
ability to create original products unavailable from suppliers. Seven-Eleven
places more importance on value than on price and launches high quality
products that are little bit higher in price.</span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US">Japan has 50,000 convenience stores as of
the fall of 2012, and some industrial sources say that the market is saturated.
However, it is noteworthy that Seven-Eleven increased sales on a year-on-year
basis for 13 months consecutively up to August 2013. </span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US">As Seven-Eleven shows, it is not too much
to emphasize the importance of segmentalizing your market and focus on the
promising markets with investment. The world is changing fast, and every
business has to adapt itself to the change. As long as you develop new markets
and scrap obsolete markets, the word “saturation” will not irritate you. <span style="mso-spacerun: yes;"> </span></span><br />
<br />
<div class="separator" style="clear: both; text-align: center;">
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<div style="text-align: center;">
<span lang="EN-US"><span style="mso-spacerun: yes;">Seven-Eleven regards a store as the base</span></span></div>
<div style="text-align: center;">
<span lang="EN-US"><span style="mso-spacerun: yes;">of the door-to-door delivery service.</span></span></div>
<div style="text-align: center;">
<br /></div>
<div class="separator" style="clear: both; text-align: center;">
<iframe allowfullscreen='allowfullscreen' webkitallowfullscreen='webkitallowfullscreen' mozallowfullscreen='mozallowfullscreen' width='320' height='266' src='https://www.youtube.com/embed/ktG2Lx7-1k4?feature=player_embedded' frameborder='0'></iframe></div>
<div style="text-align: center;">
<span lang="EN-US"><span style="mso-spacerun: yes;"><span style="font-family: Arial, Helvetica, sans-serif;">Shoppers get excited with Seven-Eleven's coffee.</span> </span></span></div>
<div style="text-align: center;">
<span lang="EN-US"><span style="mso-spacerun: yes;"><br /></span></span></div>
</div>
Senryaku-kenkyuhttp://www.blogger.com/profile/14407110371838014354noreply@blogger.com0tag:blogger.com,1999:blog-4515384792393551693.post-19968080659116537952013-09-22T01:41:00.000-07:002013-09-22T01:41:17.302-07:00No. 34: Developing business in the global market in the Unicharm way (September 21, 2013)<div class="MsoNormal" style="text-align: justify;">
<span style="color: blue; font-size: large;"><i><b><span lang="EN-US">Management:</span></b></i></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US"><a href="http://www.unicharm.co.jp/english/index.html">Unicharm</a> is outstanding in the paper diaper
business. It is expected to record sales of 580 billion yen this year. Because low
birthrate and longevity dwindles the domestic market, the company has been
energetic in developing foreign markets. Actually, its sales from foreign
markets exceeded those from the Japanese domestic market for the first time in
2012. It is dominant in Indonesia with a share of more than 80% in the western
part of Java. It will start to operate its third plant in Surabaya this year to
make the Indonesian market even more solid. The new plant is part of its
strategy to increase the share of diaper and sanitary goods from the current 20%
to 30% in Asia. </span><br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="http://news.nifty.com/cms_image/news/magazine/diamond-20130823-40130/first-diamond-20130823-40130-magazine.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="146" src="http://news.nifty.com/cms_image/news/magazine/diamond-20130823-40130/first-diamond-20130823-40130-magazine.jpg" width="400" /></a></div>
<div class="separator" style="clear: both; text-align: center;">
</div>
<div style="text-align: center;">
<span lang="EN-US"> <span style="font-family: Arial, Helvetica, sans-serif;">Unicharm's products are selling fast in Asia.</span></span></div>
</div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="color: purple;"><i style="mso-bidi-font-style: normal;"><span lang="EN-US">Allying
with local companies is vital for global competition.</span></i></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US">Focusing on newly developed countries is a
must for every Japanese manufacturer. Because economies of scale matters a lot to
compete in the global market, it is critical even for Unicharm to compete with
Proctor and Gamble (P&G) of the U.S. successfully. As a matter of fact,
Unicharm projects to increase total sales three times over the current level to
1,600 billion yen in 2020. However, P&G has total sales of 8,000 billion
yen, of which 1,600 billion yen come only from the divisions with which
Unicharm has direct competition. To cultivate undeveloped markets in Asia,
Unicharm merged companies in Vietnam and Myanmar. The M&A strategy allowed
the company to have more than 50% share in Myanmar. </span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="color: purple;"><i style="mso-bidi-font-style: normal;"><span lang="EN-US">Diversify
your market, not your business.</span></i></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US">The Japanese adult diaper market grew to
140 billion yen in 2012, exceeding the baby diaper market. Unicharm has more
than 50% in the adult diaper market. Since establishing a laboratory for the
adult diaper market, the company has been developing the adult diaper market in
coordination with medical and nursing-care facilities. These hardworking
efforts made Unicharm successful in the adult diaper market from which P&G
withdrew in 2007 and in which Kao is still struggling. This fact indicates the
importance of diversifying your market by developing and sophisticating your
products, instead of diversifying your business.</span><br />
<br />
<span style="color: purple;"><i style="mso-bidi-font-style: normal;"><span lang="EN-US">Establish
and share the management objectives with employees around the world.</span></i></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US">Unicharm has 20,000 employees around the
world, of whom 80% are local people in foreign markets. For further growth in
the global market, the company has to establish common recognition of the
management objectives among all employees. For this purpose, the company
introduced the management of resonance that ask every employee to think and work
to creates results that exceed the simple addition of all employees. The SAPS
management model was created for this purpose. S stands for schedule, A means
action, P indicates performance, and the SAP returns to S (schedule). That is, the
second S asks every employee to schedule next jobs and actions based on the
past SAP. Ultimately, the SAPS model asks every employee to think by himself and
act to develop the company. The keywords of the Unicharm management model can
be summarized as follows:</span></div>
<div class="MsoNormal">
<br /></div>
<table border="1" cellpadding="0" cellspacing="0" class="MsoTableGrid" style="border-collapse: collapse; border: none; mso-border-alt: solid windowtext .5pt; mso-padding-alt: 0in 5.4pt 0in 5.4pt; mso-yfti-tbllook: 1184;">
<tbody>
<tr style="mso-yfti-firstrow: yes; mso-yfti-irow: 0;">
<td colspan="2" style="border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 461.25pt;" valign="top" width="615"><div align="center" class="MsoNormal" style="text-align: center;">
<span lang="EN-US">Keywords
to symbolize the Unicharm management model</span></div>
</td>
</tr>
<tr style="mso-yfti-irow: 1;">
<td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 180.9pt;" valign="top" width="241"><div align="left" class="MsoNormal" style="text-align: left;">
<span lang="EN-US">Management
of resonance</span></div>
</td>
<td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 280.35pt;" valign="top" width="374"><div align="left" class="MsoNormal" style="text-align: left;">
<span lang="EN-US">Every
employee is asked to work in concert with others to exhibit unlimited power
as if he creates resonance. </span></div>
</td>
</tr>
<tr style="mso-yfti-irow: 2;">
<td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 180.9pt;" valign="top" width="241"><div align="left" class="MsoNormal" style="text-align: left;">
<span lang="EN-US">SAPS management
model </span></div>
</td>
<td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 280.35pt;" valign="top" width="374"><div align="left" class="MsoNormal" style="text-align: left;">
<span lang="EN-US">Every
employee is asked to observe the SAPS management model. </span></div>
</td>
</tr>
<tr style="mso-yfti-irow: 3;">
<td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 180.9pt;" valign="top" width="241"><div align="left" class="MsoNormal" style="text-align: left;">
<span lang="EN-US">Enhancing
communication through a social gathering </span></div>
</td>
<td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 280.35pt;" valign="top" width="374"><div align="left" class="MsoNormal" style="text-align: left;">
<span lang="EN-US">Every
department holds a social gathering once a month at company expense to
activate communication inside the department.</span></div>
</td>
</tr>
<tr style="mso-yfti-irow: 4; mso-yfti-lastrow: yes;">
<td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 180.9pt;" valign="top" width="241"><div align="left" class="MsoNormal" style="text-align: left;">
<span lang="EN-US">Unicharm
way</span></div>
</td>
<td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 280.35pt;" valign="top" width="374"><div align="left" class="MsoNormal" style="text-align: left;">
<span lang="EN-US">Every
employee is asked to carry a booklet in which Unicharm’s value and action
guidelines are described. <span style="mso-spacerun: yes;"> </span></span></div>
</td>
</tr>
</tbody></table>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal">
<div style="text-align: justify;">
<span lang="EN-US">The above Unicharm case illustrates the
strategy that a company has to take into consideration for business expansion
in the global market. </span><br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<iframe allowfullscreen='allowfullscreen' webkitallowfullscreen='webkitallowfullscreen' mozallowfullscreen='mozallowfullscreen' width='320' height='266' src='https://www.youtube.com/embed/DB1fHwsvalY?feature=player_embedded' frameborder='0'></iframe></div>
<div style="text-align: center;">
<span lang="EN-US"><span style="font-family: Arial, Helvetica, sans-serif;">Is everything going well, little princess?</span></span></div>
<div style="text-align: center;">
<span lang="EN-US"><span style="font-family: Arial, Helvetica, sans-serif;"> </span> </span></div>
</div>
<div style="text-align: justify;">
</div>
</div>
Senryaku-kenkyuhttp://www.blogger.com/profile/14407110371838014354noreply@blogger.com0tag:blogger.com,1999:blog-4515384792393551693.post-66900381242090151382013-06-28T23:12:00.000-07:002013-06-30T05:36:48.928-07:00No. 33: A company is too small to please everyone in the global market (June 29, 2013)<div class="MsoNormal">
<span style="color: blue;"><i><b><span lang="EN-US" style="font-size: large;">Management:</span></b></i></span></div>
<div class="MsoNormal">
<div style="text-align: justify;">
<div class="MsoNormal">
<a href="https://encrypted-tbn0.gstatic.com/images?q=tbn:ANd9GcSN-LHyl3dnitvdDOptLrvGutWe2OVVImIOXVQyszZGlJlRNxkd" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" src="https://encrypted-tbn0.gstatic.com/images?q=tbn:ANd9GcSN-LHyl3dnitvdDOptLrvGutWe2OVVImIOXVQyszZGlJlRNxkd" /></a><span lang="EN-US"><a href="http://panasonic.net/">Panasonic</a> will reportedly withdraw from the
plasma TV business in 2014. The withdrawal is a wise decision because the
company recorded a consolidated net loss of more than 700 billion yen two
consecutive years. The cumulative investment of more than 500 billion yen will
fall into oblivion with the discontinuation of the plasma TV business. Panasonic
launched a plasma TV in 1997 with the hope that it would replace the
cathode-ray tube TV. However, the plasma TV was outdone by the liquid crystal display
(LCD) TV, and it has currently a market share of less than 10%. The
extraordinary low market share means everything. (Photo) Panasonic's plant for plasma TVs.<span style="font-family: Arial, Helvetica, sans-serif;"> (Photo) The world largest plasma dispaly by Panasonic </span></span><br />
<br />
<div class="separator" style="clear: both; text-align: center;">
</div>
<div class="MsoNormal">
<span lang="EN-US">Even though Panasonic is a huge company, it
is totally useless and hardly possible to continue the plasma TV business and LCD
TV business simultaneously, given the fact that the former is plagued by such an
extremely low market share. The TV business is so huge, and TV is a commodity
now. Even though Japanese TVs are famous for high quality, long durability, and
multiple functions, they can hardly compete successfully with amazingly
low-priced TVs from Korea
and China.
At present, the greatest TV market is not advanced countries but newly
industrialized countries where price speaks for itself. The Panasonic case
gives the lesson that a company is too small to please everyone in the global
market. It can be said that Samsung of Korea, which focused on LCD TV to become
the market leader, realized this fact earlier than Japanese electronics giants.</span><br />
<br />
<div class="MsoNormal">
<a href="https://encrypted-tbn0.gstatic.com/images?q=tbn:ANd9GcT6dc_22DK2wacpVOobJ1v36TCA0cPHZTTt-8wn-sr_pOu7P2R7" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" src="https://encrypted-tbn0.gstatic.com/images?q=tbn:ANd9GcT6dc_22DK2wacpVOobJ1v36TCA0cPHZTTt-8wn-sr_pOu7P2R7" /></a><span lang="EN-US">The same is true in the ongoing merger
trend of the shipbuilding business. The merger between <a href="http://www.khi.co.jp/english/index.html">Kawasaki Heavy</a> and
<a href="http://www.mes.co.jp/english/">Mitsui Engineering and Shipbuilding</a> did not materialize. In view of the growing competition and
shrinking sales, pursuing economies of scale is vital for survival. As in the
case of the TV business, Japan
will clearly have to survive tough competition with strenuous efforts to launch
competitively-priced products. It is a matter of concern that most Japanese
companies are satisfied with the current status because they are increasing
sales. However, what is most important is the share in the market. If a company
decreased the share because competitors increased sales more than it did, it
has to hold a meeting for reflection instead of a banquet for celebration. A decreased
market share is a red signal asking a company to be alert.<span style="font-family: Arial,Helvetica,sans-serif;"><span style="mso-spacerun: yes;"> (Photo)</span></span></span><span lang="EN-US"> A double hull ship built by Mitsui Engineering
and Shipbuilding</span><span lang="EN-US"> </span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-US">In Europe,
it is not unusual that two companies headquartered in two different countries
merge in pursuit of economies of sales. In a sense, today is the days of cross
border alliance. Knowing the amazing growth of Samsung of Korea, Japan is
somewhat slow in reorganizing and integrating its domestic business structure.
Perhaps, it may originate from the Japanese culture that asks us Japanese to
stick to the importance of “Never give up.” As time goes by, we have to change
of our value to survive in the day of global competition. Like it or not, profits
tend to concentrate in leading companies in the world market. As Jack Welch of
GE told, “No company can survive unless it is the market leader or the market
follower.” His thoughtful insight seems to give a warning about the current
situation of Japanese companies. In this sense, <a href="http://www.daikin.com/?ID=daikintop_jpn">Daikin</a> that focuses on
air-conditioners and develops its competitive edge with steady and continuous efforts
to expand business worldwide seems to give a good example to follow. <span style="mso-spacerun: yes;"> </span></span><br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<iframe allowfullscreen='allowfullscreen' webkitallowfullscreen='webkitallowfullscreen' mozallowfullscreen='mozallowfullscreen' width='320' height='266' src='https://www.youtube.com/embed/n956LYAkusc?feature=player_embedded' frameborder='0'></iframe></div>
<div style="text-align: center;">
<span lang="EN-US"><span style="mso-spacerun: yes;"><span style="font-family: Arial, Helvetica, sans-serif;">Daikin's latest air-conditioner </span></span></span></div>
<div style="text-align: center;">
<span lang="EN-US"><span style="mso-spacerun: yes;"><span style="font-family: Arial, Helvetica, sans-serif;">featured by advanced technology </span></span></span></div>
<div style="text-align: center;">
<span lang="EN-US"><span style="mso-spacerun: yes;"><br /></span></span></div>
</div>
</div>
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<span lang="EN-US"></span></div>
<div class="MsoNormal" style="text-align: center;">
<span lang="EN-US"><span style="mso-spacerun: yes;"></span><span style="mso-spacerun: yes;"></span></span></div>
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Senryaku-kenkyuhttp://www.blogger.com/profile/14407110371838014354noreply@blogger.com0tag:blogger.com,1999:blog-4515384792393551693.post-39830759303198818972013-06-16T22:55:00.004-07:002013-06-16T22:55:51.360-07:00No. 32: Do not compete on price; what matters most is what products are available for 100 yen (June 17, 2013)<div class="MsoNormal" style="text-align: justify;">
<span style="color: blue;"><i><b><span lang="EN-US" style="font-size: large;">Marketing:</span></b></i></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US">Customers get excited with low prices, but
being cheap alone cannot keep them attracting forever. The 100-yen shop is
widespread across the country because the strategy to sell every product for
100 yen hit a jackpot. The leading four 100-yen shop chains have 5,500 shops
today and achieved combined sales of about 550 billion yen in 2012. They have
increased the number of shops at nearly 20% per year during the past five
years. One of the best selling products of the 100-yen shops is dry battery. <a href="http://www.daiso-sangyo.co.jp/english/">Daiso</a>,
the market leader, sells about 150 million dry batteries per year, about six
times more dry batteries sold by a leading convenience store chain. In a sense,
dry battery is the product that symbolizes the 100-yen shop. As you sell more,
you can get lower prices from manufacturers against a backdrop of the growing
bargaining power, and subsequently the unit price will go down. This is an
example of a virtuous cycle. However, the story is changing these days. </span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US"><a href="http://www.seria-group.com/">Seria</a> that is the market follower is very
energetic to develop new products in collaboration with manufacturers. They
handle nearly 20,000 products, and introduce 500-600 new products per month
constantly. Jointly-developed products accounted for 30-40% five years ago, but
they account for nearly 90% now. Seria’s buyers go even to manufacturers’
plants in foreign countries to develop new products. Their efforts created such
a noble products as cookware made of silicone, USB cable, and flashlight that
uses LED. All of these products were unavailable for 100 yen in the past. Today,
shoppers at 100-yen shops do not buy a product only because it is very cheap. That
is, the industry has to cope with the decreasing impulse purchase. Consumers
shop around and examine products by themselves, instead of stopping by at a
100-yen shop nearby to purchase a product only at a low price. Being cheap is
no longer a strong merit of 100-yen shops. What matters most is what products they
can make available at such a low price as 100 yen. </span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US">Today, you can find a very colorful lineup
of manicure on the shelf of 100-yen shops. <a href="http://www.dobest.co.jp/business/en/">Do-Best </a>supplies these manicure
products to 100-yen shop chains. The company goes all the way to France to
purchase the same materials used by famous French brands. Now you can purchase
almost the same quality manicure sold 3,000 yen at a department store for only
100 yen at a 100-yen shop. The difference is the container and exterior
package. The increased product competitiveness allowed some 100-shop chains to
export their products to 15 countries including Korea
and Myanmar.
</span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US">The strengthened position of the 100-yen
shop chains allowed them to be strict in the selection of location. For most
commercial facilities, a 100-yen shop is vital to attract consumers. Seria, for
example, declines a request for branching out from even a prime location. The
company has established its own policy not to accept an offer unless it satisfies
all their conditions, even though the offer comes from a prime location. The
company examined about 300 locations and opened 60 shops in 2012. The company
took away almost all the “100-yen shop” signs in its new shops to allow
shoppers to enjoy shopping. The market leader Daiso also plans to change al the
existing 2,700 shops to shops with posh atmosphere in five years. In addition,
100-yen shop chains are investing in logistics and an information system to prevent
the out-of-stock condition. <span style="mso-spacerun: yes;"> </span></span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal">
<div style="text-align: justify;">
<span lang="EN-US">In the initial stage, low price is a strong
weapon. Sooner or later, however, consumers get used to low prices. As
manufacturers need innovations constantly, retailers need product development
constantly. Offering services and products at a fixed price spread rapidly
worldwide, as McDonald’s and Starbucks showed. But it is noteworthy that even
these companies are exploring the way how to cultivate and develop the upmarket
with upgraded products. <span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span></span></div>
<div style="text-align: justify;">
<br /></div>
<div class="separator" style="clear: both; text-align: center;">
<iframe allowfullscreen='allowfullscreen' webkitallowfullscreen='webkitallowfullscreen' mozallowfullscreen='mozallowfullscreen' width='320' height='266' src='https://www.youtube.com/embed/ykrmmfndHzg?feature=player_embedded' frameborder='0'></iframe></div>
<div style="text-align: center;">
<span lang="EN-US"><span style="mso-spacerun: yes;"><span style="font-family: Arial, Helvetica, sans-serif;">The wonderful world of a 100-yen shop in Tokyo</span></span></span></div>
<div style="text-align: center;">
<br /></div>
</div>
Senryaku-kenkyuhttp://www.blogger.com/profile/14407110371838014354noreply@blogger.com0tag:blogger.com,1999:blog-4515384792393551693.post-16825867119589096122013-06-11T22:55:00.003-07:002013-06-12T01:57:20.958-07:00No. 31: Focusing on promising business instead of pursuing the please-everyone policy (2/2) (June 11, 2013)<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US"><span style="color: blue;"><i><b><span style="font-size: large;">Management: </span></b></i></span></span><br />
<span lang="EN-US">A company has to make the utmost efforts to
develop its technology. Naturally, it is hard to keep creating innovations, but
it harder to maintain the craftsmanship because every worker gets older and has
to retire soon or later. Developing human resources who can inherit traditional
craftsmanship is one of the big problems in heavy industries companies. As they
fostered the diversification strategy, they decreased the number of recruits for
the manufacturing scene. For example, the largest shipbuilding yard of
Mitsubishi Heavy reduced the number of recruits starting in the mid-1970s. Accordingly,
workers older than 50 accounted for over 60% in this shipbuilding yard in 2006,
but they accounted for 25% in 2011. In exchange for the decreasing share of
experienced workers, the share of workers younger than 20 increased to over
30%. It takes 10 years to develop human resources who can succeed craftsmanship
of welding in the shipbuilding industry. </span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US">It is urgent for every Japanese
shipbuilding companies to develop skilled workers in foreign countries to
compete successfully with China
and Korea.
IHI is one step ahead of others, and it has developed more than 1,000 skilled
workers in Vietnam and Indonesia. IHI
enjoys a reputation of a company excel in developing skilled workers, and the
good reputation worked very well to the company. A Brazilian shipbuilding
company, <a href="http://www.estaleiroatlanticosul.com.br/eas/en/home/index.php">Atlantico Sul Shipyard</a>, changed its partner from <a href="http://www.shi.samsung.co.kr/eng/">Samsung Heavy</a> to IHI.
Negotiations on capital alliance are in progress between Atlantico Sul and IHI.
In fact, Japan
can be proud of its tradition to inherit craftsmanship from one generation to
the next. </span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US">The shale gas revolution in the U.S. invited a worldwide attention and Japan will import shale gas from the U.S. In
addition to shale gas, development of ocean resources will provide a tailwind
to heavy industries companies. Ocean resources are expected to create a huge
market for drilling ships and floating liquefied natural gas (FLNG) production
facilities, and the market will increase about two times over the current level
to 10 trillion yen by 2020. <a href="http://www.modec.com/index.html">MODEC </a>received an order from Malaysia for
the design of a Malaysian FLNG last year. The total construction cost is
estimated at 200 billion yen. </span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US">No company can be free from ups and downs
in business, as the stock market. And most companies react nervously to the
fluctuations, as most stockholders do. What is important for a company is to abandon
unpromising business and focus on promising business, and the decision should
be based on the technology including craftsmanship that it has accumulated. One
of Japan’s
leading consumer-electronics companies suffered from a huge loss as a result of
its policy to please everyone. In the age of accelerating technological
progress, no company can cover lots of business domains simultaneously however
big it is. Develop technology and human resources that can inherit
craftsmanship, while abandoning unpromising business fields. Unpromising
business, in most cases, remains unpromising however hard you may try.<span style="mso-spacerun: yes;"> </span></span></div>
<div class="MsoNormal">
<br /></div>
<div class="separator" style="clear: both; text-align: center;">
<iframe allowfullscreen='allowfullscreen' webkitallowfullscreen='webkitallowfullscreen' mozallowfullscreen='mozallowfullscreen' width='320' height='266' src='https://www.youtube.com/embed/1CRf-QPPIZQ?feature=player_embedded' frameborder='0'></iframe></div>
<div class="MsoNormal" style="text-align: center;">
<span lang="EN-US"><span style="mso-spacerun: yes;">A triangular ocean bed research vessel</span></span></div>
<div class="MsoNormal" style="text-align: center;">
<br /></div>
<div class="separator" style="clear: both; text-align: center;">
<iframe allowfullscreen='allowfullscreen' webkitallowfullscreen='webkitallowfullscreen' mozallowfullscreen='mozallowfullscreen' width='320' height='266' src='https://www.youtube.com/embed/bqmuwHQGo1k?feature=player_embedded' frameborder='0'></iframe></div>
<div class="MsoNormal" style="text-align: center;">
<span lang="EN-US"><span style="mso-spacerun: yes;">Scientific deep sea drilling vessel (Chikyu: the Earth) </span></span></div>
<div class="MsoNormal" style="text-align: center;">
<span lang="EN-US"><span style="mso-spacerun: yes;"><br /></span></span></div>
Senryaku-kenkyuhttp://www.blogger.com/profile/14407110371838014354noreply@blogger.com0tag:blogger.com,1999:blog-4515384792393551693.post-51119401390733319142013-06-09T18:57:00.000-07:002013-06-11T17:55:20.982-07:00No. 30: Focusing on promising business instead of pursuing the please-everyone policy (1/2) (June 10, 2013)<div class="MsoNormal" style="text-align: justify;">
<span style="color: blue;"><i><b><span lang="EN-US" style="font-size: large;">Management:</span></b></i></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US">Japanese three leading heavy industry
companies – <a href="http://www.mhi.co.jp/en/index.html">Mitsubishi Heavy</a>, <a href="http://www.khi.co.jp/english/index.html">Kawasaki Heavy</a>, and <a href="http://www.ihi.co.jp/en/index.html">IHI</a> – launched new products
one after another for diversification to maintain domestic employment after the
so-called depression on shipbuilding. They are sometimes dubbed the three
machinery department stores. Because of the please-everyone policy, they were
not able to make enough investments in promising markets and products, and they increased
interest-bearing debt dramatically. Until quite recently, they recorded a 2-3%
operating profit rate, less than half of Hyundai Heavy Industries of Korea.</span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US">Mitsubishi Heavy changed this stream. It started
to reform its business structure and introduced the “strategic business evaluation
system” in 2011. It integrated business operations and withdrew unprofitable
business operations. As a result, it reduced the interest-bearing debt from
1,600 billion yen in 2009 to 970 billion yen in the current fiscal year, less
than 1,000 billion year for the first time in the past 17 years. It will
achieve sales of 190 billion yen, which is close to the highest sales in the
past, and increase the operating profit to 6%. </span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<div class="MsoNormal">
<span lang="EN-US">The promising business field for them is the
exploration of ocean resources where they can utilize their shipbuilding
technology. The world ocean resources business field is expected to increase
two times over the current level to more than 10 trillion yen by 2020, mainly
thanks to the construction of drilling ships and offshore production facilities
of liquefied natural gas. Mitsubishi Heavy delivered four resource exploration
ships to Norway
for about 100 billion yen. Its technology to minimize the engine noise and
vibration was helpful for the successful order intake.</span><span lang="EN-US"> </span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-US">It is not too much to emphasize the
importance of technology. <a href="http://www.hitachizosen.co.jp/english/index.html">Hitachi Zosen</a> delivered its reactor vessel to <a href="http://www.sasol.com/">Sasol</a>
of South Africa. A reactor vessel is the core equipment of the gas to liquid
(GTL). It is 50 m tall, and it weights nearly 200 tons. Precise welding is indispensable
to building a reactor vessel. Hitachi Zosen’s technology to bend and weld a hug
thick steel plate will allow the company to keep growing. The company dubs itself
a shipbuilding company on land. Stick to the technology that you have accumulated,
and you can open up the road for further growth.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="http://www.sankeibiz.jp/images/news/130430/cpc1304300900000-n1.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="150" src="http://www.sankeibiz.jp/images/news/130430/cpc1304300900000-n1.jpg" width="200" /></a></div>
<div style="text-align: center;">
<span lang="EN-US">Hitachi Zosen's reactor vessel </span><br />
<br /></div>
</div>
Senryaku-kenkyuhttp://www.blogger.com/profile/14407110371838014354noreply@blogger.com0tag:blogger.com,1999:blog-4515384792393551693.post-78469327069307453962013-05-19T17:25:00.001-07:002013-05-19T17:28:00.959-07:00No. 29: Publishing e-books and taking in people in general simultaneously is vital to spread Japanese culture (May 20, 2013)<div class="MsoNormal" style="text-align: justify;">
<span style="color: blue;"><i><b><span lang="EN-US" style="font-size: large;">Marketing:</span></b></i></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US">Mickey Mouse is unquestionably the world’s
most famous character, but Japan’s
Hello Kitty is growing popular even in the U.S., the home country of Mickey
Mouse. <a href="http://www.sanrio.co.jp/english/goods/index.html">Sanrio</a>, the creator of Kitty, reportedly renewed the highest operating
profit in fiscal ended March 2013 and will supposedly renew it again in fiscal
ending March 2014. Likewise, Japan’s
two mobile game developers, <a href="http://dena.com/intl/">DeNA</a> and <a href="http://corp.gree.net/jp/en/">Gree</a>, are growing very fast these days.</span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US">Cool Japan is a national policy to
dispatch Japanese culture to the world. However, Japan has to overcome several
headaches. One of them is unauthorized copies. In the world, underground
websites get data on the latest issues of Japanese comics one week before they
are sold at Japanese booksellers and put their unauthorized English versions on
the Internet in just two days. That is, foreign readers read the latest
contents free well before Japanese readers buy their favorite comics at a
bookseller. Several Japanese publishers started to distribute e-books in
alliance with foreign Internet companies, and publish a new issue
simultaneously both at home and abroad. For example, an American venture,
<a href="http://www.crunchyroll.com/">Crunchyroll</a>, has been offering the charge system since 2009. The company has
now 200,000 members who can read all comics at a flat rate of 6.55 dollars per
month. As far as comics are concerned, the strategy to publish e-books and
offer them to members all over the world simultaneously at a flat rate in
alliance foreign Internet service companies has become vital. </span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US">The Japanese government is trying hard to
keep foreign people informed of Japanese culture. Actually, Japanese contents
successfully got fans called “Otaku (Fanatics)” worldwide. In fact, there are
lots of people enchanted with Japanese culture, and it seems that the Japanese
content industry is doing well in the export business. The fact remains that it
exports only 5% of its total sales of 12 trillion yen. One of the reasons for
the stagnant export value is the lack of efforts to increase fans. Japanese
contents companies have been increasing fans with a focus on Otaku (fanatics).
However, it is time to shift the focus from Otaku to non Otaku, who can be
called people in general, to spread Japanese culture worldwide. Think about
Nintendo’s strategy. Nintendo recorded a remarkable sales increase by taking in
people uninterested in video games. <span style="mso-spacerun: yes;"> </span></span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal">
<div style="text-align: justify;">
<span lang="EN-US">The above story can apply not only to a
country but also to a company. It is vital for every company to increase
customers by strengthening its technology and service, responding to the change
of market situation. In the case of the content industry, creativity matters
most. Companies successful in trying to keep people excited with new contents
will survive. As Peter Drucker taught us, “The purpose of business is to create
and keep a customer.” </span></div>
<div class="separator" style="clear: both; text-align: center;">
<br /></div>
<div style="text-align: center;">
<iframe allowfullscreen='allowfullscreen' webkitallowfullscreen='webkitallowfullscreen' mozallowfullscreen='mozallowfullscreen' width='320' height='266' src='https://www.youtube.com/embed/juEHp20vT3Y?feature=player_embedded' frameborder='0'></iframe></div>
<div style="text-align: center;">
<span lang="EN-US"><span style="mso-spacerun: yes;"> <span style="font-family: Arial, Helvetica, sans-serif;">Is Japan cool?</span></span></span></div>
<div style="text-align: center;">
<span lang="EN-US"><span style="mso-spacerun: yes;"><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></span></span></div>
</div>
Senryaku-kenkyuhttp://www.blogger.com/profile/14407110371838014354noreply@blogger.com0tag:blogger.com,1999:blog-4515384792393551693.post-64128130142724215512013-05-08T19:11:00.002-07:002013-05-08T19:34:14.636-07:00No. 28: Convenience store chains in a turbulent age: IT and differentiation are the keys to survival (2/2) (May 9, 2013)<div class="MsoNormal" style="text-align: justify;">
<span style="color: blue;"><i><b><span style="font-size: large;"><span lang="EN-US">Management:</span></span></b></i></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US">As leading chains focus more on locality, local
chains are fighting back with their own strategies. There are about 2,700
convenience stores in Hokkaido
that is the northernmost island, and a local chain by the name of <a href="http://www.seicomart.co.jp/instore/cm_info.html">Seicomart</a> has
40% share there. The chain introduced the 100-yen prepared foods corner in
2009. They always sell about 50 kinds of 100-yen prepared foods and change menu
seasonally to prevent customers from getting bored with the same menu. Every
store of this chain has a kitchen inside, and customers shop around for 100-yen
prepared foods, fresh foods, and drinks while they are waiting for their orders
to be cooked. Seven-Eleven also offers 100-yen prepared foods, but it offers
only 10 kinds. The game is over. The difference between 50 kinds and 10 kinds
is too great. <span style="mso-spacerun: yes;"> </span></span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US">Self-efficiency supports prepared foods
offered by Seicomart. As vegetables used for prepared foods are subject to
market fluctuations, it is hard to maintain the price at 100 yen. This local
chain procures 50% of vegetables from its own farms. It gets nearly 50% of its
sales from private brands that range from 100-yen prepared foods to pickles and
milk products. Trucks travel around the farms to pick vegetables and pickles
after delivering commodities to each store. The logistics this chain built is
working very well. This strategy helps it increase sales by 20% and operating
profit by more than 70% in the past five years. As this chain shows,
differentiation based on locality is important for survival. </span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US">As IT grows more important to business
expansion, no chain is free from the pursuit of economies of scale. It is
natural that some member stores affiliated with smaller chains are eager to
increase sales by becoming a member of a larger chain. A convenience store in a
rural area increased sales by 6.8% by changing the franchise to a larger
nationwide chain. While the larger chain delivers commodities three times a
day, the smaller chain decreased the frequency to two times a day. The store
owner renewed his awareness of the comprehensive strength of the large chain.
In fact, the brand strength of a larger chain is vital for convenience store
owners. The difference of sales per store between Seven-Eleven and medium-sized
chains increased from 140,000 yen in 2002 to 200,000 yen in 2012. </span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal">
<div style="text-align: justify;">
<span lang="EN-US">Accordingly, large chains open new stores
in succession. Seven Eleven and Family Mart will open 1,500 new stores this
year. Lawson, however, is taking a different approach, saying that being
absorbed in opening new stores may impair the mind to develop innovative
products and services. Lawson decreased the number of new stores to be opened
this year 7% from the previous year to 870 stores this year. Lawson put more
energy on making the existing network of chains more versatile. No one can tell
which strategy will work well in the long run. As always, there is no correct
answer in business. What is clear is that IT-supported efficiency and differentiation
seem to be the two keys to survival. <span style="mso-spacerun: yes;"> </span></span></div>
<br />
<div class="separator" style="clear: both; text-align: center;">
<iframe allowfullscreen='allowfullscreen' webkitallowfullscreen='webkitallowfullscreen' mozallowfullscreen='mozallowfullscreen' width='320' height='266' src='https://www.youtube.com/embed/l2i7Tq0gBsI?feature=player_embedded' frameborder='0'></iframe></div>
<div style="text-align: center;">
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<![endif]--><span lang="EN-US">Super delicious fried chicken by Seicomart </span></div>
<div style="text-align: center;">
<span lang="EN-US"> </span>
</div>
</div>
Senryaku-kenkyuhttp://www.blogger.com/profile/14407110371838014354noreply@blogger.com0tag:blogger.com,1999:blog-4515384792393551693.post-51989390939861182722013-05-08T00:54:00.000-07:002013-05-08T16:18:09.253-07:00No. 27: Convenience store chains in a turbulent age: IT and differentiation are the keys to survival (1/2) (May 8, 2013)<div class="MsoNormal" style="text-align: justify;">
<span style="color: blue;"><i><b><span lang="EN-US" style="font-size: large;">Management:</span></b></i></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US">There are more than 50,000 convenience
stores at present, increasing from 44,500 stores to 50,000 stores in the past
five years. Combined sales are 9,000 billion yen today. Leading chains now
focus on local regions to expand business. Tokyo has one store for every 1,992
people, whereas Kagoshima Prefecture, southernmost prefecture, has one store for
every 3,159 people. </span></div>
<div class="MsoNormal" style="text-align: center;">
<br /></div>
<div class="MsoNormal" style="text-align: center;">
<span lang="EN-US">Top five convenience store chains in Japan</span></div>
<div class="MsoNormal" style="text-align: center;">
<br /></div>
<table border="1" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; border: none; margin-left: 9.9pt; mso-border-alt: solid windowtext .5pt; mso-border-insideh: .5pt solid windowtext; mso-border-insidev: .5pt solid windowtext; mso-padding-alt: 0in 5.4pt 0in 5.4pt; mso-yfti-tbllook: 1184;">
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<span lang="EN-US">Convenience
store chain</span></div>
</td>
<td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 117.0pt;" valign="top" width="156"><div class="MsoNormal">
<span lang="EN-US">No.
of stores </span></div>
<div class="MsoNormal">
<span lang="EN-US">in
Japan</span></div>
</td>
<td style="border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 153.0pt;" valign="top" width="204"><div class="MsoNormal">
<span lang="EN-US">Domestic
sales</span></div>
<div class="MsoNormal">
<span lang="EN-US">(billion
yen)</span></div>
</td>
</tr>
<tr align="center" style="mso-yfti-irow: 1;">
<td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 175.5pt;" valign="top" width="234"><div class="MsoNormal">
<span lang="EN-US">Seven-Eleven
Japan</span></div>
</td>
<td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 117.0pt;" valign="top" width="156"><div class="MsoNormal">
<span lang="EN-US">15,072</span></div>
</td>
<td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 153.0pt;" valign="top" width="204"><div class="MsoNormal">
<span lang="EN-US">3,508</span></div>
</td>
</tr>
<tr align="center" style="mso-yfti-irow: 2;">
<td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 175.5pt;" valign="top" width="234"><div class="MsoNormal">
<span lang="EN-US">Lawson</span></div>
</td>
<td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 117.0pt;" valign="top" width="156"><div class="MsoNormal">
<span lang="EN-US">11,130</span></div>
</td>
<td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 153.0pt;" valign="top" width="204"><div class="MsoNormal">
<span lang="EN-US">1,906</span></div>
</td>
</tr>
<tr align="center" style="mso-yfti-irow: 3;">
<td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 175.5pt;" valign="top" width="234"><div class="MsoNormal">
<span lang="EN-US">Family
Mart</span></div>
</td>
<td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 117.0pt;" valign="top" width="156"><div class="MsoNormal">
<span lang="EN-US">9,481</span></div>
</td>
<td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 153.0pt;" valign="top" width="204"><div class="MsoNormal">
<span lang="EN-US">1,715</span></div>
</td>
</tr>
<tr align="center" style="mso-yfti-irow: 4;">
<td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 175.5pt;" valign="top" width="234"><div class="MsoNormal">
<span lang="EN-US">Circle
K Thanks</span></div>
</td>
<td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 117.0pt;" valign="top" width="156"><div class="MsoNormal">
<span lang="EN-US">6,242</span></div>
</td>
<td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 153.0pt;" valign="top" width="204"><div class="MsoNormal">
<span lang="EN-US">946</span></div>
</td>
</tr>
<tr align="center" style="mso-yfti-irow: 5; mso-yfti-lastrow: yes;">
<td style="border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 175.5pt;" valign="top" width="234"><div class="MsoNormal">
<span lang="EN-US">Ministop
</span></div>
</td>
<td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 117.0pt;" valign="top" width="156"><div class="MsoNormal">
<span lang="EN-US">2,168</span></div>
</td>
<td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 153.0pt;" valign="top" width="204"><div class="MsoNormal">
<span lang="EN-US">352</span></div>
</td>
</tr>
</tbody></table>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US">With the accelerating aging of population, the
access provided by a convenience store is growing more appealing to consumers. The
boundary between supermarket and convenience store is growing more ambiguous. Many
convenience stores are handling fresh foods and sell them in small packs for
100 yen apiece. The 100 yen groceries corner is growing more popular these
days. It is no longer unusual that housewives and the elderly buy fresh foods
with prepared foods in the evening. It is crucial for every chain to enclose
customers. They key to the enclosure is IT and differentiation. </span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US">Lawson introduced Ponta that is a point
card system usable at every Lawson store. One point is one yen, and shoppers
can exchange their points for discount and designated products. Since the system
was introduced, the assortment improved and shortage of popular products
decreased dramatically. Enchanted by the effect of Ponta, stores are very eager
to obtain new members. This good cycle helped Lawson increase sales greatly. </span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<div style="text-align: justify;">
<span lang="EN-US">Seven-Eleven is taking another strategy. It
sells fresh coffee nationwide. The prefecture that sells most is Kagoshima
Prefecture. A Seven-Eleven store in this prefecture sells 280 cups of fresh
coffee a day, and sales increase to 360 cups on the weekend. Seven-Eleven
spends two months to educate employees for new stores, and they are competent
enough to tell the difference in taste between generally available coffee and
Seven-Eleven’s fresh coffee. Family Mart is also carrying out a new strategy.
It concluded a franchise agreement with two organizations affiliated with <a href="http://www.zennoh.or.jp/about/english/index.html#1">Japan Agricultural Cooperatives</a>. They also started mobile catering of vegetables. A
new system is required to sell consumers in a scarcely populated area. <span style="mso-spacerun: yes;"> </span></span></div>
<div style="text-align: center;">
<br /></div>
<div style="text-align: center;">
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<div style="text-align: center;">
<span lang="EN-US" style="font-family: "Arial","sans-serif"; font-size: 12.0pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: "MS 明朝"; mso-fareast-language: JA; mso-font-kerning: 1.0pt;"><span style="font-family: sans-serif;">Introduction of Japanese convenience stores </span></span><br />
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Senryaku-kenkyuhttp://www.blogger.com/profile/14407110371838014354noreply@blogger.com0tag:blogger.com,1999:blog-4515384792393551693.post-75984632916325074882013-04-29T21:24:00.002-07:002013-06-03T23:32:05.915-07:00No. 26: The importance of pursing the strongly established business domain to compete in the global market (April 30, 2013) <div class="MsoNormal" style="text-align: justify;">
<b><span style="color: blue;"><i><span lang="EN-US" style="font-size: large;">Management:</span></i></span></b></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US"><a href="http://www.suntory.com/?ke=hd">Suntory </a>is very active in expanding the
Southeast Asian market. The company currently has sales of several tens of
billion yen in this market and plans to increase the sales to 100 billion yen
in three years. Focusing on the Southeast Asian market is part of Suntory’s
strategy to become a global company in the true sense of the word. The target
company is <a href="http://www.nestle.com/">Nestle</a> of Switzerland. It is a long way to catch up with Nestle.
Nestle has sales of 9,300 billion yen, while Suntory’s sales are 1,850 billion
yen. <span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span></span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US">Suntory grew rapidly by expanding the
whisky business around 1930 by taking advantage of the westernization of Japanese
dietary life. Actually, whisky characterized the company for a long period. In the
1980s and 1990s, its whisky business dwindled because it failed to understand
the change of consumer behavior precisely. Realizing that youths do not drink
hard drinks as much as their parents did, the company reorganized the business
portfolio drastically and set the soft drinks business as the mainstay. Soft
drinks increased the share in its business from 20% to more than 50% today. In
fact, profit from soft drink sales accounts for 60% of its total profits. The
company has established its business domain with the catch phrase “Suntory
lives with water.” Its natural water sold about 6,400,000 cases, two times as
many cases sold by the runner-up. In the soft drink market, Suntory has 22%
share following the Coca-Cola group. </span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US">Suntory is also successful in the beer
business. The company is now the third larger beer company, surpassing the
Sapporo Beer. It has 16% share in the period between January and March 2013. Consumer
behavior and taste change rapidly, and every company has making strenuous
efforts to keep abreast of these changes. Even today’s bestselling products are
destined to be one of the obsolete products sooner or later. The company will
construct a laboratory staffed with 250 researchers in 2015. No company can
maintain its competitive edge forever. Developing highly competitive new
products needs a different approach free from the traditional way of thinking,
the company reckons. <span style="mso-spacerun: yes;"> </span></span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal">
<div style="text-align: justify;">
<span lang="EN-US">Suntory’s traditional ad strategy in a new
product launch is ad blitz with a decreased product price. The company spent
about 450 billion yen on promotion and advertising in 2012. It spends about 24%
of sales on promotion and advertising, as against competitors including Kirin spend between 11% and 15%. It is not too much to
say that future of a company depends on new product launch. Suntory’s famous
company attitude – Go for it – will help the company continue growing.<span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span></span></div>
<br />
<div class="separator" style="clear: both; text-align: center;">
<iframe allowfullscreen='allowfullscreen' webkitallowfullscreen='webkitallowfullscreen' mozallowfullscreen='mozallowfullscreen' width='320' height='266' src='https://www.youtube.com/embed/f9CoqIVXCUU?feature=player_embedded' frameborder='0'></iframe></div>
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<![endif]--></span></span><span lang="EN-US">Suntory’s canned coffee CMs starring Tommy Lee Jones </span></div>
<div style="text-align: center;">
<span lang="EN-US"> </span><span lang="EN-US"><span style="mso-spacerun: yes;">
</span></span></div>
</div>
Senryaku-kenkyuhttp://www.blogger.com/profile/14407110371838014354noreply@blogger.com1tag:blogger.com,1999:blog-4515384792393551693.post-22921394960634408982012-03-27T23:03:00.001-07:002013-05-01T03:27:15.160-07:00No. 25: Do not forget market and customer segmentation, anytime (March 27, 2012)<div style="color: blue; text-align: justify;">
<i><span lang="EN-US" style="font-size: large;">Management </span></i></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US">Such gloomy news items as the failure of
<a href="http://www.elpida.com/en/index.html">Elpida Memory</a> and the heavy deficit of leading consumer electronics makers are
widely discussed in media, and these miserable results are attributed to the overemphasis
on the selection and concentration strategy. However, the misery of the leading
consumer electronics makers is because of the lack of market and customer segmentation.
It provides a good lesson that unless a company divides products, markets, and
customers into segments before implementing the selection and concentration
strategy, it will get involved in price competition and have it results badly
damaged. Hitachi, once dubbed as a sinking big ship, has recovered dramatically
because it abandoned unprofitable business fields and concentrated its
resources only on profitable and highly prospective business fields. This is
the selection and concentration strategy in the true sense of the word. </span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US">The same is true of Elpida Memory. The
company put its resources exclusively to produce high-performance and
high-quality products at a low cost to satisfy the requirements imposed by the
former NTT group companies. Today, consumer electronics and semiconductors are
highly commoditized. Doubtlessly, highly commoditized products have a tough
game in the age of global competition even through they are high in quality and
performance. It is hardly possible for Elpida Memory to compete successfully
with competitors from the countries where labor costs are terribly lower than
in Japan. In addition, data and information of a product race around the world instantaneously
to allow them to underprice their products, like it or not. </span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US">It is totally the geocentric theory
centered by Japan to think that high-performance and high-quality products
offered at a low price will be readily accepted by consumers worldwide,
enabling a company to achieve a sales increase. The Japanese market is just one
of the markets on the earth, and the global market does not go around the
Japanese market. As Samsung of Korea is doing, companies competing in the
global market have to station their employees in countries around the world to know
the requirements local consumers in an honest way. Samsung’s great presence in the
global market is the results of these efforts. Highly appreciated Japanese yen
is just one of the factors that deteriorated the results of Japanese home electronics
makers.</span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US">In addition, it is absolutely necessary to study
if the new market is suitable to a company. Kodak is said to have failed
because of the overemphasis on the selection and concentration strategy.
However, the real cause of Kodak’s failure is that the printer market is too
small for such a big company as Kodak to do business. A company cannot achieve
good results in a market that is too small in comparison to its company size. In
a similar way, a company cannot do well in a market that is too big in comparison
to its company size. As proverb goes, the crab makes a hole suited to its shell
(Cut your coat according to your cloth). It is vital to study the strength of
your company and the size of a new market carefully before cultivating or participating
in a new market. </span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US">Even in today’s severe business
environment, <a href="http://www.irisohyama.co.jp/english/">Iris Ohyama</a> and <a href="http://www.kobayashi.co.jp/english/index.shtml">Kobayashi Pharmaceutical</a> are growing quite
rapidly. These two companies focus on how to avoid excessive competition. That
is, they set up a business domain not from the industrial field but from the
phrase “the business to create something new that consumers want to have in
their life. The business domain of these companies is neither the manufacturing
industry nor the pharmaceutical industry. Coincidentally, they are
ex-wholesalers. It may be said that they know well how to understand the needs
of consumers because they used to be wholesalers.</span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US">The days have come to define the business
domain of a company as they show. In the past, NEC achieved a dramatic growth
with the help of its famous business domain “C&C (Computer and
Communication)” that means the business based on the merger between computer
and communication. NEC, however, has deteriorated its results drastically partly
because it was not able to create a new business domain to succeed the C&C.
It is rather hard to increase sales only in the business domain of the home
electronics manufacturing in today’s business environment where globalization
is developing fast, like it or not. </span></div>
Senryaku-kenkyuhttp://www.blogger.com/profile/14407110371838014354noreply@blogger.com0tag:blogger.com,1999:blog-4515384792393551693.post-40220250024873984532012-01-03T19:28:00.001-08:002013-05-01T03:28:15.177-07:00No. 24: Change of Thought: from a commodity to something beyond a product (January 4, 2012)<div style="text-align: justify;">
<span lang="EN-US"><span style="color: blue;"><i><b><span style="font-size: large;">Management: </span></b></i></span></span></div>
<div style="text-align: justify;">
<span lang="EN-US">Articles on stagnant economy prevail in
media, and people cannot erase the indescribable feeling of insecurity in view
of the ongoing world economy. The current Japanese government that promised to
realize too many dreams is in the middle of snake dancing in face of harshness
of reality. In a school athletic meet, teachers correct the snake dancing and
let students parade straight. In the political world, however, there is no
teacher who corrects the snake dancing. Most Diet members try to protect their
own interests and internal rivalry precedes the consensus and agreement. The
budget screening featured by the historic statement “Why can’t you be satisfied
with second place?” has ended in the whack-a-mole game. One
government-subsidized organization has gone, and one government-subsidized
organization is born. The current situation is well predictable in advance. </span><span style="font-family: "MS 明朝";"> </span><span lang="EN-US"> </span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US">It goes without saying that the
infrastructure business in newly industrialized countries grows dramatically.
As a country grows affluent, it naturally gives the highest priority to
infrastructure improvement. Support from the political leader is vital to such
a large project as infrastructure construction. The president of Korea took the
leadership and got an order for the construction of a nuclear power plant in
United Arab Emirates. In the past, we Japanese had a prime minister who took no
action seeing the Toyota’s case in the U.S. saying that it was not a political
issue, and a prime minister who declared “Goodbye to Nuclear Power Generation” proudly
for sentimental reasons. The difference of the Korean leader and two Japanese leaders
is enormously great. It is not too much to say that this hopelessly great
difference creates the difference in the presence in the global market of the
two countries. </span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US">Now, we have to change the thought that a
home electric appliance is a product to make living more comfortable. We are in
the middle of the days that businessmen in advanced countries and those in
newly industrialized countries alike are involved in the global business holding
a smartphone with in one hand. Naturally, price competition grows harder. That
is, it is extremely hard to compete with countries that introduce hardware at an
incredibly low price in the global market if you market your products as
commodities. An American solar panel maker that went bankrupt due to the
inability to compete with incredibly low-priced import products epitomizes the current
situation. It is the time that companies should market a product not as a
commodity but as something beyond a product. Something can be defined as a
product coming with such added value as the mindset and cultural heritage of
the producer. </span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US">Komatsu, a Japanese world-class
construction equipment maker, has eight plants worlwide, but it has only one engineering
drawing for each model that should be shared by the eight plants. Instead of
building a model specific to a local market, the company holds a world content annually
in Japan for engineers worldwide. It asks engineers and machinists coming from
all over the world to think and take action to build a product in the Komatsu
way. Yamato Transport, Japan’s leader of the home delivery business, is
expanding business in foreign countries asking local employees to understand
the Japanese culture and traditional concept. On the other hand, Fanuc makes
strenuous efforts to develop its competitive edge through technological
innovation in Japan and ship their state-of-the-art products from Japan,
instead of building a plant in a foreign country. This is also a correct
strategy. </span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US">The correct strategy, of course, depends on
the company. What is important is to ship not commodities but products based on the
tradition and cultural heritage of the producer to the global market. </span></div>
Senryaku-kenkyuhttp://www.blogger.com/profile/14407110371838014354noreply@blogger.com2tag:blogger.com,1999:blog-4515384792393551693.post-22672230197491698182011-10-06T21:50:00.000-07:002013-05-01T03:32:09.730-07:00No. 23: What does Tesco’s withdrawal from the Japanese market mean? (October 7, 2011)<div style="text-align: justify;">
<span lang="EN-US"><span style="color: blue;"><i><b><span style="font-size: large;">Management: </span></b></i></span></span><br />
<span lang="EN-US">Tesco, the world’s third largest retail
chain in Great Britain, decided to withdraw from the Japanese market. <span class="st">Carrefour,
the world’s second largest retail chain in France, already left in 2005. That
is, the world’s second and third largest retail chains said and will say
goodbye to Japan. As a result, Walmart, the largest retail chain in the U.S.,
alone is doing business in Japan in alliance with Seiyu that is a medium-sized
retail chain. Given the above situation, people say that the withdrawal of the
two giant retail chains is because of the idiosyncrasy of Japanese consumers. In
Japan, consumers’ requirements for product quality are too high, and their
shopping behavior is different from those in other countries, etc. However,
they are part of the problems of their failures. </span></span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span class="st"><span lang="EN-US">It is true that Japan is a
homogeneous country. More than 95% of people living in Japan are Japanese.
However, the market is highly segmentalized. It is basically segmentalized in
accordance with nearly 50 prefectures. But the market is segmentalized further
inside the same prefecture. For example, two major markets exist in Aomori
Prefecture, the northernmost prefecture in the Honshu Island, and each market
has a different history and culture. This is because of the transformation of
the old system conducted by the Meiji government. In the transformation, it was
not unusual that two or three clans set up by the Tokugawa government were
integrated in a prefecture. Paradoxically, the Japanese market is highly segmentalized
because Japan is homogeneous. From the business viewpoint, Japan is not a homogeneous
country even if most people are Japanese. </span></span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span class="st"><span lang="EN-US">When you see lots of varieties
of beer, coffee, and green tea on the Japanese market, you can realize how much
in detail products and markets are segmentalized and differentiated. Each of
the four breweries has a wide variety of brands segmentalized according to
geography, purpose (health-conscious or not, alcohol-free or not, sugarless or
not, noncaloric or not), age group, gender, etc. The same is true of magazines
and snacks. Let’s take a chocolate for example. Westerners may be surprised to
learn there are more than 100 varieties of the KitKat chocolate in Japan, in
different package sizes, in different contents, with different package designs,
etc. This is the point. </span></span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span class="st"><span lang="EN-US">It is true that Toys R Us
scored a success in Japan, but it is partly because Japan did not have a big
retail chain of toys when Toys R Us came to Japan. Office Depot and Virgin
Megastores left the Japanese market because of stagnant sales. That is, the
strategy to underprice products by virtue of economies of scale hardly worked. Whether
it is in a foreign market or in the domestic market, the most critical issue for
a company to develop the market is how to differentiate and segmentalize the
product and market, and how to establish the distribution channel that allows
for the differentiation and segmentation. Simply put, each of 10,000 stores
needs to have its own distinctive face. </span></span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span class="st"><span lang="EN-US">That is, every company has
to study how to operate a store and how to market products best suitable to the
respective markets and customers. In this sense, understanding the history and
culture of the target market is vital to marketers active in the world market. </span></span></div>
Senryaku-kenkyuhttp://www.blogger.com/profile/14407110371838014354noreply@blogger.com1tag:blogger.com,1999:blog-4515384792393551693.post-32363986128629568482011-07-20T01:25:00.000-07:002013-05-01T03:37:08.573-07:00No. 22: Three Functions of a Product<div class="MsoNormal" style="text-align: justify;">
<span style="color: blue;"><i><b><span lang="EN-US" style="font-size: large;">Management: </span></b></i></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US">Aston Martin, a long-established automaker in Great Britain, has launched a compact car named Cygnet. This car is basically the same as Toyota’s IQ. To differentiate its car from Toyota’s IQ, Aston Martin used a lot of expensive pure hide in the interior. Toyota’s IQ is priced at 20,000 dollars, while Aston Martin’s Cygnet has a price tag of 50,000 dollars. Aston Martin is very famous for expensive cars. Actually, it is a beloved car of James Bond who can enjoy a gorgeous life with limitless money that comes from tax. The latest Aston Martin DB5 is as expensive as 280,000 dollars.</span></div>
<div class="MsoNormal" style="text-align: justify;">
<br />
<span lang="EN-US">That is, Aston Martin markets its gorgeous compact car with British flavor for the price of two times higher than the Japanese original. The price difference seems to be too big for the two cars sharing the same performance and component. At the same time, it is necessary to note that the incentive is very important for salespeople of car dealers. A big difference in car price automatically means a big difference in incentive. Even if salespeople get a higher percentage on incentive for a Cygnet than for a DB5, the difference in real income remains great.</span></div>
<div class="MsoNormal" style="text-align: justify;">
<br />
<span lang="EN-US">A product has three functions. They are (1) basic function, (2) supplementary function, and (3) emotional function. The basic function is what a company has to guarantee with the product. In the case of car, it is made up of such factors as running performance, fuel mileage, quietness, and solidness and durability of the body. The supplementary function is the function to upgrade the product. In the case of Aston Martin’s Cygnet, it is the leather interior that makes it more attractive and gorgeous. The emotional function is the image that the product appeals to the customers. It is James Bond in the case of Anton Martin.</span></div>
<div class="MsoNormal" style="text-align: justify;">
<br />
<span lang="EN-US">In today’s marketing, it is growing more important to keep the balance between the three functions. People watch the real value of a product closely. They examine the balance of the three functions unknowingly. In this sense, it is not too much to emphasize the importance of the basic function that is the biggest factor of the three. In the case of Aston Martin’s Cygnet, the basic function is smaller than the remaining two functions combined. It should be noted that 20,000 dollars for the basic function and 30,000 dollars for the remaining two functions. It seems that many people are reluctant to pay 30,000 dollars for the two functions.</span><br />
</div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US">What is more important is that a company has to keep innovating and upgrading a product constantly. No one-time-only product succeeds in the market. Nearly 30 years ago, Rover of Great Britain used the same strategy as Aston Martin. Rover’s Sterling was basically the same as Honda’s Acura. Rover advertised its Sterling extensively, saying “Great Britain can make a car comparable to Honda’s Acura.” It is true that the Sterling was a very good car with fancy styling. However, Rove was not able to introduce a car that succeeded the Sterling, and the Sterling was wiped out from the market. </span><br />
<span lang="EN-US"><span style="mso-spacerun: yes;"><br /></span></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US">The emotional function mentioned above can be divided into (1) external image, (2) internal image, and (3) environmental image. The external image excites the senses, and it is created by such factors as color, design, and naming. The internal image can be said essential image of a company, and it is created by such factors as safety and durability that a company has built throughout its history. The environmental image reflects a company attitude toward ecology. This image has been growing more important lately. This is epitomized by the disaster in the Fukushima nuclear power plant. </span></div>
Senryaku-kenkyuhttp://www.blogger.com/profile/14407110371838014354noreply@blogger.com0tag:blogger.com,1999:blog-4515384792393551693.post-59092907735598758312011-03-31T19:03:00.000-07:002013-05-01T03:35:38.229-07:00No. 21: Hardware or Software? No, it is Marketing (April 1, 2011)<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US"><span style="color: blue;"><i><b><span style="font-size: large;">Management:</span></b></i></span> </span><br />
<span lang="EN-US">Electronic books attracted wide attention worldwide, but they are far from being successful at this time. In Japan, the year of 2010 was dubbed the first year of e-books, but every publisher that launched the e-book business has found the e-book business in a sorry plight. The same is true of e-magazine and e-newspaper. Neither of them succeeds in creating impressive profits. Presumably, the situation is almost the same in other countries. Manufacturers of apparatus attribute the slow business to shortage of software, while publishers blame them for slow-moving apparatus. Another dispute over hardware and software has arisen.</span><br />
<br />
<span lang="EN-US">You can store more than 1,000 books even in a small USB memory. However, owning 1,000 books is one thing, and reading and utilizing them is quite another. You can find information and conduct analyses using the 1,000 books. However, you can get necessary information and conduct analyses faster and more easily on the Internet for free. A publisher offered an e-magazine that allows the user to read a total of more than 30 newspapers and magazines for a monthly subscription fee of 300-400 yen, but it is still unsuccessful in getting a good number of subscribers. Who can read as many as 30 media every month? Such smart people who wish to read 30 media every month are small in number. Human is not a computer. You can increase the capacity of your PC by replacing it with a new powerful PC. However, no human brain is replaceable.</span><br />
<br />
<span lang="EN-US">You can easily find disputes over hardware and software in business. Think about the dispute between VHS and Beta in the videocassette format. Some say that VHS achieved success because it offered a far larger number of software titles than Beta. But the difference in the number of software titles is not the problem but the result. The real problem is that Sony made a mistake in positioning Beat. Unquestionably, Beta was higher in performance than VHS, but VHS was enough for the home market in terms of performance. Beta was more suitable for the industrial market than the home market.</span><br />
<br />
<span lang="EN-US">The same is true of Panasonic’s 3D Real video game machines that ended in a disaster. Panasonic tried to cover various age groups by incorporating several functions in the 3D Real. Accordingly, it was initially introduced for more than 50,000 yen (US$500). Back then, the largest customers of video game machines were children up to 15 years old, and the purchasers were their parents, to be specific, their mothers. Which mother can buy a game machine priced at more than 50,000 yen for her children? Panasonic made a mistake in positioning the 3D Real. History repeats itself. </span><br />
<br />
<span lang="EN-US">The Japanese e-book market was about 60 billion yen in 2009. Surprisingly enough, however, 80% of the sales came from comics for teens. Believe it or not, they are mostly love affair comics, meaning that love affair comics for teenage girls dominate the market. Who could have imagined this situation? Product positioning in marketing is very important. No product can be evenly accepted by all consumers. Unless you position your product precisely beforehand, your product will fly to the direction that you never imagine. </span></div>
Senryaku-kenkyuhttp://www.blogger.com/profile/14407110371838014354noreply@blogger.com0tag:blogger.com,1999:blog-4515384792393551693.post-61975749327744523852011-03-22T20:53:00.000-07:002013-05-01T03:41:11.666-07:00No. 20: Do Not Forget That Momentum Does Not Last Long (March 23, 2011)<div class="MsoNormal" style="text-align: justify;">
<span style="color: blue;"><span lang="EN-US"><i><b><span style="font-size: large;">Management:</span></b></i> </span></span><br />
<span lang="EN-US">It is advisable to take advantage of momentum in whatever field you are involved: warfare, business, and even politics. When you create innovative ideas, you can get momentum and win a battle. The point, however, is that the momentum does not last long, and it is lost all of sudden usually because of narcissistic decisions.</span></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US"><br /></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US">Take the <a href="http://www.google.co.jp/search?q=Battle+of+Midway&hl=ja&prmd=ivns&tbm=isch&tbo=u&source=univ&sa=X&ei=xF2JTdW4LM2ecfLo5bEM&ved=0CEAQsAQ&biw=1280&bih=847">Battle of Midway</a> in 1942 for example. The Japanese Navy attacked the Pearl Harbor in 1941 and got momentum in the Pacific War. However, the momentum was lost in the Battle of Midway because of the incredible mistakes on the part of the Japanese Navy. It is quite natural to think that the Japanese Navy completely lost the possibility of winning the Pacific War in the Battle of Midway. Nonetheless, the Japanese government continued the reckless battles in the Pacific Ocean. Is it too much to say that the narcissistic decisions of Japanese military elite led Japan to the devastating defeat in the Pacific War? </span></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US"><br /></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US">You can find another example in the dramatic story of <a href="http://www.google.co.jp/images?hl=ja&q=%E7%B9%94%E7%94%B0%E4%BF%A1%E9%95%B7&um=1&ie=UTF-8&source=univ&sa=X&ei=li2HTZHOI43IvQPXkanPCA&ved=0CEsQsAQ&biw=1024&bih=623">Nobunaga Oda</a> (1534-1582) who is unquestionably the most innovative feudal lord of the Japanese history. In the age of provincial wars (1467-1615), feudal lords placed importance on establishing a solid system to rule their feuds, and the system was to integrate worriers, farmers, and merchants for the stability inside their respective feuds. Equipped with an established system, they tried to expand their feuds should if they had surplus power and ability. This means that no feudal lords, except Nobunaga Oda, thought about establishing a new system in a nationwide scale. Back then, establishing a new system to rule the entire nation was truly a revolutionary idea. Nobunaga Oda got momentum with this new idea and successfully expanded his feud. Judging from his connections with missionaries of the Society of Jesus, his idea may have originated from the absolutism then widespread in Europe.</span></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US"><br /></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US">He worked out several strategies to realize the new system. First, he completely separated warriors from farmers and created professional warriors. Back then, farmers did agricultural work in peacetime and fought in a battle in wartime. This means they ware unable to be warriors in the farming season. With the professional warriors, Nobunaga Oda got the military force to fight a battle all year round. He forced his warriors to live around his castle and established the military system to manage them. The well-organized warriors were trained to stand always ready for a battle. His warriors naturally were far more competent than part-time warriors of other feudal lords.</span></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US"><br /></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US">At the same time, he was the first feudal lord to introduce guns in Japan. Back then, a gun needed more than 10 seconds for reload. To make up for this shortcoming, he set up a team made up of three rows and asked each row to fire in shifts. This revolutionary idea allowed him to defeat horse soldiers utterly. Another point that characterized him is that he promoted human resources regardless of their personal history and background. However, his best days ended all of sudden when one of this subordinates attacked him.</span></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US"><br /></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US">A great earthquake, which is dubbed an earthquake once in 1,000 years, attacked the Tohoku and Kanto districts in Japan while the current regime is in the height of narcissism. As is often the case, disaster strikes when you least expect it. </span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
Senryaku-kenkyuhttp://www.blogger.com/profile/14407110371838014354noreply@blogger.com1tag:blogger.com,1999:blog-4515384792393551693.post-66812194545023549232011-03-09T18:23:00.000-08:002013-05-09T02:33:17.239-07:00No. 19: Define the Ability of Your Company Precisely: Sorrow of a Venture Company<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US">A venture company of electric vehicles in Japan announced on March 1, 2011 that it would shortly file for voluntary bankruptcy. The amount of debt is 1.1 billion yen, and the company dismissed most employees on the same day. The company got an order from Japan Post for its EVs, but Japan Post cancelled the order in January this year for fear of possible delay in delivery. Believe it or not, the number of EVs that the venture company had to deliver is 1,030 units. The contract required the company to delivery 30 units of the 1,030 units between January and February this year, but the company was not able to deliver them. This means that the company failed to deliver even 30 units of the contracted 1,030 units on schedule. Where are the delivery plan and production plan? The company seems to be dreaming the day of three cheers all employees shout together in line when it finishes delivering the 1,030 units.</span></div>
<div class="MsoNormal" style="text-align: justify;">
<br />
<span lang="EN-US">It is questionable that Japan Post placed such a big order for as many as 1,030 units for 3,500 million yen with a venture company, and it is more questionable that a venture company capitalized at less than 500 million yen took such a big order. Konosuke Matsushita, the founder of Panasonic, taught us “No one can go up to the second floor in one stride,” but this company tried to “go up to the 10th floor in one stride.” Business does not end with the delivery of ordered products. Think about the business of a medical doctor. His business does not end with diagnosing his patient and writing a prescription for him. When his patient resumes his healthy daily life and shows his heartfelt gratitude to the doctor, a doctor knows that his business with the patient ends. The business of an ad agency does not end with placing an ad on the TV screen or newspaper. When the designed advertising campaign successfully increased consumer awareness of the product and made the client happy with increasing sales, the ad agency can say that the business with the client ends. </span></div>
<div class="MsoNormal" style="text-align: justify;">
<br />
<span lang="EN-US">If you think about business in the above way, you will realize how big an order the venture company took. Suppose that this company successfully executed this big order, is it realistic to think that it can get such a big order again in the future? Technological progress is growing faster and faster. Think about Sony’s Trinitron technology. It is an outstanding technology when it was introduced, but it cannot be outstanding forever. Sony forgot this fact. This is why Sony was late in entering the flat-screen TV market. Because Sony is such a big company, delay in market entry is not a big problem. Actually, it is now the world’s second largest flat-screen TVs manufacturer following Korea’s Samsung. However, medium-sized companies including venture companies should not take an example from such a big company as Sony.</span></div>
<div class="MsoNormal" style="text-align: justify;">
<br />
<span lang="EN-US">Another big problem exists with this company. It does not have the main bank that usually should be one of the leading banks in Japan. As soon as the order with Japan Post was cancelled, financial institutions naturally asked the company to reimburse the loans. For all companies whether they are big or small, the last hope is always the main bank. Even more, political power should not be ignored in this business because the customer is Japan Post that is formerly affiliated with the Ministry of Post and Telecommunications. You have to remember that reemployment of retired bureaucrats is still widespread despite the new regime’s promise to eradicate it. No company can live only on ideas and technologies, however excellent they are. </span></div>
Senryaku-kenkyuhttp://www.blogger.com/profile/14407110371838014354noreply@blogger.com0tag:blogger.com,1999:blog-4515384792393551693.post-46468027833210687682010-11-12T20:31:00.000-08:002013-05-09T02:24:34.348-07:00No. 18: Problem with a Rapid Growth in Business (November 12, 2010)<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US">A long-established company in the bedclothes industry applied for court protection in Japan. This company achieved a rapid growth thanks to its strategy to introduce high-end bedclothes bearing the names of famous fashion designers into the market, that is, it successfully imported fashionability to the bedclothes business. The story of this company from the beginning of the rapid growth to the bankruptcy tells you about the high risk of high-cost structure common to the brand business besides disclosing the inability of this company to foresee the change of consumer behavior and the dynamism of distribution channels. If a company pursues economies of scale incessantly to achieve a rapid growth without improving the high-cost structure, it will face a big problem soon or later. </span></div>
<div class="MsoNormal" style="text-align: justify;">
<br />
<span lang="EN-US">Economy does not seem to recover immediately in industrialized countries. In this condition, many companies hastily try to reduce production cost by means of economies of scale to satisfy consumers’ demand for low commodity prices. Capital investment to increase production capacity is vital to economies of scale. Expanding production capacity in a short period of time usually means a big increase of debt payable. Increased debt payable increases interest payment, and naturally, decreases capital adequacy ratio. Because unlisted medium-sized companies cannot procure capital in the market, they have only two ways to procure capital. Management executives increase the capital by themselves, and the company saves net profit after tax. Knowing the risk of increasing interest payment, most companies are enchanted by a rapid sales increase without improving the high-cost structure. And they diversify their business to get quick returns and increase the number of distribution channels. </span></div>
<div class="MsoNormal" style="text-align: justify;">
<br />
<span lang="EN-US">In short, rapid sales increase by means of economies of scale alone decreases the capital adequacy ratio. If you build a new plant, expand facilities, and install new equipment, you have to come up with increasing expenses associated with the increasing production capacity and increasing stocks not to mention increasing labor cost. That is, repayment of principal and interest grows bigger and capital adequacy ratio decreases. In these conditions, a company has cash-flow problems and a high probability of bankruptcy due to a sudden change of business environment even though its results are in black. This situation is symbolized by a medium-sized company that achieves a rapid growth, builds a fabulous company building, increases production capacity, employs a large number of new workers, and suddenly faces financial difficulties because of a sudden business slowdown. </span></div>
<div class="MsoNormal" style="text-align: justify;">
<br />
<span lang="EN-US">If a company faces this situation, it had better be realistic and avoid business beyond its capability, namely abandon the idea of expanding the business and take only highly profitable orders, and reduce the amount to settle by draft. Reducing settlement by draft improves cash management and increases the capital adequacy ratio. Generally speaking, if a company increases the capital adequacy ratio to above 30%, it can settle purchases only in cash. As the same time, it is necessary to abandon very small customers by following the four principles. They are not to sell on credit, not to give discount, not to deliver an order, and not to pay a visit for sales activities. Always, you have to keep in mind the risk associated with a rapid business expansion. </span></div>
Senryaku-kenkyuhttp://www.blogger.com/profile/14407110371838014354noreply@blogger.com0tag:blogger.com,1999:blog-4515384792393551693.post-25678946838026374532010-08-20T20:35:00.000-07:002013-05-09T02:25:12.043-07:00No. 17: Take a Different Strategy and Keep It In Strict Confidence<div style="text-align: justify;">
A company should not take the same strategy taken by the competitor in business. Sun Tzu wrote "The Arts of War" about 500 B.C. in China and insisted the importance of the strategy to defeat the weak while avoiding a battle against the strong. In most cases, however, a company plays safe and follows its bigger competitor using the same strategy. It intentionally or unintentionally ignores the factors that make the strategy of the competitor successful and presumes that the strategy taken by the competitor will also be effective to it without careful consideration. As a result, it unknowingly attempts to attack on the strength of the competitor.</div>
<div style="text-align: justify;">
<br /></div>
<div style="text-align: justify;">
It is important to know that specific products of each company make its strategy work well. Not only visible products, such as equipment and apparatus, but also invisible products, such as technological strength, sales forces, developmental power, and service capability, vary with the company. In the subprime lending disaster, you can say that every company involved took the same strategy seeking big profits and fell into an abyss together. It is an honor for a company to have its strategy imitated by another company, but the competitor’s strategy is the worse strategy for a company that imitates it. Any strategy does not work as soon as it is known to your competitor.</div>
<div style="text-align: justify;">
<br /></div>
<div style="text-align: justify;">
Japan provoked a reckless war against the U.S. without notice in 1941, and it was knocked into smithereens in 1945. Putting aside the fact that Japan had no chance of winning in terms of military strength, it is important to know that the U.S. mostly knew Japanese strategies beforehand because they were too much faithful to the textbook. During the age of provincial wars in Japan (1467-1615), warlords worked out their own strategies and fought against their enemies with the strategy full of originality. The greatest warlord is Nobunaga Oda (1534-1582), and both Hideyoshi Toyotomi (1536-1598) and Ieyasu Tokugawa (1542-1616) are his students. It is striking to know that none of the three warlords shared the same strategy.</div>
<div style="text-align: justify;">
<br /></div>
<div style="text-align: justify;">
During World War II, headquarters of the Imperial Japanese Army was staffed only with the bright graduates from the military academy. They all were too faithful to the textbook to construct a strategy full of originality. In addition, they were too proud and gentlemanly. A high-raking official in the headquarters reportedly told “It is not gentlemanly to sneak a look at strategies that the U.S. keeps in strict confidence.”</div>
Senryaku-kenkyuhttp://www.blogger.com/profile/14407110371838014354noreply@blogger.com2tag:blogger.com,1999:blog-4515384792393551693.post-86051464359726992532010-08-11T22:49:00.000-07:002013-05-09T02:27:41.454-07:00No. 16: Profit is the Cost to Keep Your Company Running<div style="text-align: justify;">
A medium-sized foodstuff wholesaler exclusive for restaurants applied for court protection in Tokyo. The company started business by supplying foodstuffs to privately-owned noodle shops and grew quite rapidly by opening its own prepared foods corner in food supermarkets. It accumulated lots of knowledge and know-how on the prepared foods business and received a rush of orders for consulting on how to run a prepared food corner from food supermarkets with which it had no business relations. The consulting business helped the company increase the presence in the foodstuff wholesale business greatly. With the growing profits from the consulting business, it expanded the foodstuff wholesale business and opened an account with nationally-known restaurant chains.</div>
<div style="text-align: justify;">
<br /></div>
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Leading national restaurant chains that have lots of outlets across the country are very attractive for foodstuff suppliers. Total sales are easily calculable by multiplying the sales per outlet and the number of outlets and they will automatically increase every time the national chain builds a new outlet. However, the market is highly competitive because many suppliers seek the opportunity to underprice the competitor to get big orders. No existing supplier can lower its guard under any circumstances, however big they may be.</div>
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Your competitor will replace you the next day should you be unable to respond to the national chain’s requirements immediately. Even if the national chain changes the menu all of sudden, you have to respond to the change immediately even though the stocked foodstuffs for delivery become dead stocks. All suppliers have no way but to accept strict conditions to keep doing business with national chains. Accordingly, their business is very much like a roundsman and the profit rate is extremely low. </div>
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It is not advisable for a medium-sized supplier to do business with a national chain. A medium-sized suppler should take note the following four points if it tries to open an account with a big national chain. (1) Every business cannot be free from economic fluctuations. You get big sales when economy is brisk, but you lose big sales when economy becomes stagnant. (2) Your presence in the market is lower than bigger competitors. Because of your low presence, you cannot have good bargain power to secure enough profit. Namely, your profit rate tends to become even lower.</div>
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(3) Market is liable to change all of sudden. A big chain may acquire another big chain, or it may be merged with another big chain. The resulting big chain may not appoint you as supplier. (4) Your credit rating is lower than bigger competitors. Because of your low credit rating, you cannot get favorable conditions from the bank and you have to pay higher interest rate than your bigger competitors. It is necessary to purchase a large quantity of goods at a lower price to supply a large quantity of goods at a lower price. This business practice is hardly possible for a medium-sized supplier.</div>
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As shown above, it is not a good idea for medium-sized companies to do business in a big market. They should pick a small market and increase the share in it by virtue of the ability to respond customer’s requirements without delay. Likewise, a big company should not do business in a small market. They should do business in a big market by virtue of economies of scale. This company should have focused on opening its own prepared foods corner in food market making the best use of its expertise. It is very important to keep in mind that profit is the cost to keep your company running.</div>
Senryaku-kenkyuhttp://www.blogger.com/profile/14407110371838014354noreply@blogger.com0tag:blogger.com,1999:blog-4515384792393551693.post-22279602266404342872010-08-05T07:16:00.000-07:002013-05-09T02:26:35.422-07:00No. 15: Military Strength is Proportionate to the Square of Troop Strength<div style="text-align: justify;">
A medium-sized supermarket chain headquartered in Tokyo filed for court protection. The biggest reason for its failure is that it extended the battle line too much. In the height of its prosperity, it had 20 outlets in four prefectures instead of operating 20 outlets in one prefecture. A medium-sized supermarket chain can hardly compete with nationally known big supermarket chains that have lots of outlets across the country in an extended battle line. Of course, you can find not a few medium-sized chains that compete successfully with national chains, but you have to note that they are successful because they are pursuing customer-oriented marketing in a geographically limited trade area.</div>
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Nobunaga Oda (1534-1582) accompanied by 3,000 soldiers defeated Yoshimoto Imagawa (1519-1560) accompanied by 30,000 soldiers in 1560. This is the “Battle in Okehazama” characterized by the famous phrase “A small number of soldiers defeated a large number of soldiers.” However, knowing well that the winning was a very lucky one, Oda never tried again to fight against an enemy that had two times the troop strength he had. Even the world-famous Napoleon never tried to fight against an enemy with two times the troop strength he had. </div>
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It is important to know that military strength is proportionate to the square of troop strength. That is, the ratio of one to two in troop strength is one to four in military strength. It is, therefore, advisable for a medium-sized company to limit the trade area geographically and compete with big companies in a geographically limited trade area. In business, troop strength can be defined as the number of employees, market share, sales, and capital of a company. That is, if your competitor has two times bigger market share as you have, it is hardly possible for you to beat the competitor. Suppose Toyota has 40% share, while Nissan has 20% share. The ratio of military strength of these companies is one to four not to one to two. It is hardly possible for Nissan to beat Toyota under the same business environment.</div>
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Japan has the Edo period (1603-1868) that was extremely peaceful. During this nearly 270 years of peaceful period, Japanese seemed to have abated the awareness of battle and cultivated somewhat strange aesthetic feeling about battle. They became impressed with the battle that an army with a small number of soldiers provoked against an army with a large number of soldiers. This aesthetic feeling culminated in extolling undauntable warlords like Nobunaga Oda and peaked at the end of the Japanese-Russo War (1904-1905) in which Japanese navy defeated overwhelmingly powerful Russian navy in the Japan Sea, and the overconfidence finally ended in the disaster in 1945.</div>
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The Zero fighter was unquestionably the world’s best fighter in the early stage of World War II. With its excellent maneuverability and powerful weaponry, it could down up to three Grumman F4F Wildcats should an ace pilot like Saburo Sakai maneuver it. But it is totally impossible for one Zero fighter to down four Grumman F4F Wildcats. What should the pilot of the Zero fighter do? Run away immediately.</div>
Senryaku-kenkyuhttp://www.blogger.com/profile/14407110371838014354noreply@blogger.com0tag:blogger.com,1999:blog-4515384792393551693.post-197399511567596522010-07-27T22:38:00.000-07:002013-05-09T02:34:37.661-07:00No. 14: Build a New and Better Distribution Channel<div style="text-align: justify;">
A prestigious Japanese sake brewery filed for court protection. This sake brewery is famous for the brand sake supplied to the Emperor. The major reason of the failure is that people drink Japanese sake less in these days. However, the president cannot be free from the responsibility of the failure because not a few Japanese sake breweries are recording good results despite the dwindling sake consumption. No companies can survive unless they make strenuous efforts to sell their products by themselves. Every company should know that it is no longer possible to survive only by producing the established products and distribute them only through the established distribution channels. Innovation not only in production but also in distribution is vital for survival.</div>
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In the magazine report on the failure, the president of this sake brewery who studied engineering in college talked much about production and little about marketing in his remorse. This indicates the problem that many engineering-educated presidents have in common. All that he has in his mind is to produce excellent quality sake from excellent quality rice to maintain the tradition. His attitude should be praised, but he is lacking in the perspective to build a new distribution channel. However excellent his sake is, its sales will not grow unless he builds a new distribution channel suitable to the new age. Youth do not drink as their parents did in the past. Many liquor shops used to sell sake to salaried workers on a cup basis at the shopfront in Japan. Salaried workers used to grab a drink at a liquor shop on their way home, but no more.</div>
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He could have realized the necessity to build a new distribution channel if he had studied in detail how consumers purchased sake and where they drank sake. He should have realized much earlier the mistake to stick only with the long-established distribution channel. If he had worked on expanding business abroad, he could have taken advantage of the growing popularity of Japanese cuisines in foreign countries. Every company needs to abandon the idea to stick only with the distributors with whom it has been enjoying long and established business relations without trying to build a new and better distribution channel. Some companies may say, “We cannot do such a ruthless thing.” These companies will be wiped out from the market in the long run. It is not a ruthless idea to abandon the distributor that cannot cope with changes of the times.</div>
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In Japan, there was a famous phrase “Toyota’s marketing and Nissan’s technology” in the past. Possibly fascinated by this euphonious phrase, Nissan emphasized technology because it thought technologically excellent cars would sell fast. Nissan should have realized that marketing is much more difficult than production. While production is internal work, marketing is external work. No automaker can satisfy the infinite requirements imposed by consumers, no matter how big it is. Even the almighty Toyota cannot order a customer to buy a Toyota. Even Toyota salespeople can at most say, “We have built this car by getting together our wisdom and technology. Please check is closely. We would appreciate it very much if you would be interested in this car and purchase one.”</div>
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The story of the prestigious sake brewery tells the sorrow of an engineering-educated president who did not sell his products by himself and could not abandon the Ptolemaic theory that the distributor was selling his products very hard for him.</div>
Senryaku-kenkyuhttp://www.blogger.com/profile/14407110371838014354noreply@blogger.com0tag:blogger.com,1999:blog-4515384792393551693.post-38002467808099114002010-06-21T00:11:00.000-07:002013-05-09T02:28:02.955-07:00No. 13: Listen to the Voice of the Market, First<div style="text-align: justify;">
A municipality in the Tokyo Metropolitan area started to commercialize brandy using pears that are its signature agricultural products, but things did not go well as expected. It publicly sought a person to preside this business and recruited a competent person, but even he did not succeeded in making a turnaround. The greatest problem with this case is that the municipality did not ask beforehand whether or not pear brandy would sell fast enough to make the business viable. As this case shows, many municipalities try to commercialize products using their signature agricultural products, but few of them succeed.</div>
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It is obvious that some one already tried to commercialize pear brandy in the past and proved that it does not sell fast enough to keep the business running. Since ancient times, human has been trying to brew various kinds of fruits to produce original liquors. As the result of trial and error, only the existing products are available on the market. The same is true of jams. Many municipalities make efforts to commercialize pear jam and peach jam, but in vain.</div>
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To make the matter worse, agricultural products are greatly at the mercy of market conditions. You cannot stop producing liquors and jams only because the purchase cost of agricultural products is high, keeping the production equipment idle. It may be possible to market pear brandy on a small scale as a gift for sightseers. But, it is hardly possible to market it as business. To be rather modest, the municipality should not have tried to commercialize a product that large companies do not try to commercialize.</div>
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Quite some time ago, local brand beers created a sensation in Japan. Many municipalities joined the boom and introduce their own brand beers one after another. Today, we do not hear much about them. In this case, beer is beer. The point is how to differentiate your local brand beers from Asahi’s Super Dry and Kirin’s Lager. The story about pear brandy is totally different from the story about the local brand beer.</div>
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Today, every technology is highly advanced and product development is brutally fierce. Therefore, it is vital to change thought from using the signature agricultural product as it is to growing specific agricultural product best suitable to a product to develop. Otherwise, it is hardly possible to create products that satisfy consumers’ requirements. Think about grapes. The grapes from which wine is made are the result of selective breeding. In addition, it is important to know that the technology to produce best fruit is quite different from the technology to produce wonderful wine using the best grape. You had better not think illogically that you can produce wonderful wine only if you can get the best grape for wine.</div>
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Because business is the activities that involve the market and consumers, you always need to look into various aspects of the market and consumers. That is, you need to build a product concept by listening to the voice of the market and observe market trend in detail. It is not advisable to build a product concept only on the basis of your self-centered view, however wonderful your technology and know-how may be.</div>
Senryaku-kenkyuhttp://www.blogger.com/profile/14407110371838014354noreply@blogger.com0tag:blogger.com,1999:blog-4515384792393551693.post-65541985660486779182010-06-17T20:29:00.001-07:002013-05-09T02:28:23.974-07:00No. 12: On future prediction<div style="text-align: justify;">
Figures based on future prediction attract wide attention as an election approaches and campaigns grow furious. Nothing is more appealing to people than figures based on future prediction. Many intellectuals predict the future, and mass media release their predictions. Listening to the reports released by mass media, people believe that an upheaval will come soon and a reform will change the world soon.</div>
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People become optimistic or pessimistic depending on the prediction. In the days when PCs started to increase the presence in business, many intellectuals predicted the arrival of a paperless society. However, you still need to depend on hard copy documents in your business. Several years ago when gasoline prices soared, many intellectuals predicted that gasoline price would exceed 200 yen per liter. It is about 130 yen per liter now. All predictions do not necessarily come true. Even the famous book “The Limits to Growth” written by the Club of Rome does not have as high a hitting ratio as people expect.</div>
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You have to note that the future is not an extension of present. As the great Peter Drucker told us, the only thing we know about the future is that it is going to be different. It is possible to predict the future of a natural phenomenon to a certain degree of accuracy. If you plant a seeding, it will certainly put forth ears as time goes by. However, you can rarely know the future precisely seeing what is going on now. A temporal enthusiastic trend has the possibility to become a thing of the past. Even hot water in a kettle will become water unless it is heated continuously. In addition, no phenomenon will stay in the same direction. People those who lived in a lap of luxury during the bubble yell out “We need a society without disparity” as soon as the bubble bursts, but they expect next bubble as soon as economy shows the sign of recovery.</div>
Senryaku-kenkyuhttp://www.blogger.com/profile/14407110371838014354noreply@blogger.com0tag:blogger.com,1999:blog-4515384792393551693.post-25672887185482474982010-06-16T20:54:00.000-07:002013-05-09T02:28:46.136-07:00No. 11: No Company Can Go Up to the Second Floor in One Stride<div style="text-align: justify;">
You need to win in business because business is a war. Otherwise, you will be beaten by your competitors. In this sense, you may sometimes need a gimmick to break them down. However, the gimmick unsupported by sufficient amount of financial resources will definitely fade away as time goes by. Vainglory is a big no-no in business. Even if you create a flashy gimmick, gilt comes off sooner or later. A company that attracted wide attention in the mold-making industry filed for bankruptcy protection under the Civil Rehabilitation Law with about 15 billion yen (about US$160 million) in debt.</div>
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When you see the 20 years’ history of this company from the foundation to the bankruptcy, you can see the stereotype story that emerging companies have in common. The company developed innovative technology and achieved a rapid increase in sales. Delighted with the rapid sales increase, it moved its headquarters to an expensive building located in the super expensive business district in Tokyo. It decked the office with expensive furniture as if it looked like a palace, and attracted excellent engineers with the fabulous working conditions on the assumption that its business will grow continuously.</div>
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The company president was pretty sure about eternal development of his company. He pressed his employees to focus on developing state-of-the-art technology and asked them to develop the technology that is the best or the second best in the industry. He must have great respect for GE’s Jack Welch, but it is not a good idea for a small company to do what the world’s best company does. This company spent nearly 50% of its sales on building an unmanned plant to show its excellent technology.</div>
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Apart from his somewhat optimistic prediction, this company depended on the automobile market for 60% of its sales. The ratio was clearly too high. If the target market grows continuously, no company comes across a tragedy as long as it has highly sophisticated technology vital to the market. However, things will not necessarily go well as you expect. Even Toyota Motor is not free from economic fluctuations.</div>
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Empirically, it is advisable for a company not to depend on one market for more than 20% of its sales. Even if a company loses sales from one market entirely, it supposedly can manage to make up for the loss as long as the ratio is less than 20%. It is vital for a company to upgrade its technology continuously and diversify the target market. At the same time, it needs to accumulate equity capital to prepare for an economic downturn. Fixed costs, such as employment cost and rent, cannot be reduced even if sales go down. In this sense, a company president should have recognized the necessity to know how to protect his company as well as how to develop it.</div>
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As the great Konosuke Matsushita who is the founder of Panasonic said, “A company has to make efforts to go up to the second floor, but no company can go up to the second floor in one stride.”</div>
Senryaku-kenkyuhttp://www.blogger.com/profile/14407110371838014354noreply@blogger.com0