Successful Japanese Firms in the Post Lehman Shock Era JICA Bulgaria Seminar 2010 Prof. Osamu Iiyama
Welcome message from author
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
Successful Japanese
Firms in the Post
Lehman Shock Era
JICA Bulgaria Seminar 2010
Prof. Osamu Iiyama
Presentation Outline
1. Information Technology: Rakuten and others
2. Fast Fashion: Uniqlo and IGA
3. Character Licensing : Crown Fancy and
Sanrio
4. Knowledge: Intage
5. Low Cost Retailing: ABC Mart, Nitori, Muji
6. Green/Eco: JTEC
7. Manufacturing: Shimano and others
Objective of Presentation
To introduce successful Japanese firms who continue to grow despite the global economic recession of 2008. (They are taking advantage of the recession)
Emphasis on two most widely publicized
firms in Japan today, Rakuten and Uniqlo
In a way, this suggests that there are not many firms with huge success in the last 20 years
1. Information Technology:
Rakuten 楽天 (Ｏｐｔｉｍｉｓt）
Rakuten Profile
Established in 1997
By Mr. Mikitani (IBJ, Harvard MBA)
Listed on Jasdaq since 2000 (45.33% owned by the Mikitani family)
Type of Business: E-commerce/online business
Business Philosophy: Shopping as Entertainment
Sales turnover in 2009: US$3.5 billion (\85)
Sales/ Operating Profit First Half 2010: up 17%/27% ($320 Million), a higher sales growth after the shock (perception that on-line is cheaper than brick and mortar)
6000 employees
Rakuten Ichiba: Business
Opportunity
Business Model: Created an online shopping mall called Rukuten Ichiba by setting up customized storefronts on the web for the brick and mortar stores. Why started this business?
Business opportunity in the late 90’s: E-commerce trend in the US, Japan was slow to adopt internet (IT incompetency), Cost of maintaining websites was very high and needed to be outsourced to IT vendors. How did he do it?
Rakuten Ichiba: Business
Opportunity cont.
Aggressive sales drive: Undercut existing IT vendors by up to 80%, hired aggressive sales force and provided every merchant who opened a Rakuten store with individual services such as phone support, seminars, etc.
Rakuten’s Revenue source: up front virtual real estate fee (like a franchise initial fee) and 3 % of sales as commission (average)
Start up in 1997: 13 stores (food, electrical appliances, supplements)
Rakuten Ichiba Growth
Year No. of Store No. of Member Sales
2000 4,833 690,000 $200M
2005 15,028 32.5 M $3.5B
2009 31,831 62.0 M $9.4B
2010 35,681 65.0 M $12B (est.)
By far the largest online shopping mall operator (quasi-
monopoly or a gorilla making Yahoo, Amazon and E-
Bay a chimpanzee)
Massive Horizontal Diversification
Ichiba: 60 million different items from groceries, fashion items, electronics, books to automobiles with more than 60 million registered members (more than a total number of households in Japan, of which 25% are actual buyers in a given year)
As the number of members started to grow, Mikitani saw opportunities to horizontally diversify to take advantage of the membership base, but stay online.
The first diversification in 2001: Rakuten Travel, now No. 4 travel agent in Japan
Rakuten Economic Sphere or
Domain (50 businesses)
E-Commerce Sector: Rakuten Ichiba, Rakuten Books, Rakuten Travel, etc.
Financial Sector: 1/3 of 50 businesses are now on line financial services: credit card, insurance, brokerage, banking, etc.
Portal media (contents) Sector: Infoseek, Rakuten Research
Professional Baseball Team: Rakuten Eagles
Rakuten Economic Sphere
Rakuten Globalization Drive
Aggressive Objective: To replicate what they do in Japan in other countries. To develop and build Rakuten Sphere in 27 countries in the next 5 years. Currently overseas business only 8% but increase to 70% in the future.
2008: Taiwan (about 3,000 merchants now)
2009: Thailand (Acquired a local firm)
2010: China (J/V with Baidu), Indonesia (J/V), USA (acquired Buy.com) and EU (acquired PriceMinister in France)
Rakuten Globalization Drive
cont.
How serious Mikitani is about globalization?
English as Rakuten’s official business language from 2011 even for in house staff in Japan (globalization of headquarters), the first Japanese firm to publicly announce, quickly followed by Uniqlo
Mikitani strong leadership as key success factor
Leadership by Mikitani
Top down
Visionary
Sound judgment
Risk taking (all in house systems development)
Aggressive but knows how to behave with the
establishment (taming old Keidanren people to be
on his side, making it possible for him to acquire a
professional baseball team)
Information Technology: GREE
Est. 2004
By Mr. Tanaka (32 years old now)
Type of Business: Social Media (games)
Sales (2010): $400 million
Profit (2010): $135 million
No. of employees: 174
No. of members: 20 million
GREE
Example of Social Games
2. Fast Fashion: Uniqlo
What is Fast Fashion?
Trendy, High Fashion at Low price
Vertically operated, one brand shop
Japan Apparel Sales Today
Total Sales Down
Especially hard hit is department stores (350 stores to 250 stores now)
Specialty clothing stores down and struggling (3 large jeans specialty stores)
General Merchandise Stores Down (only 2 major players from 8)
Fast Fashion: Only segment enjoying growth
ZARA
H&M Tokyo
UNIQLO Paris Global Flagship Store
UNIQLO Business Strategy ■ To develop products of overwhelmingly high quality
■ Expand range of women’s wear on offer
■ UNIQLO Japan: To develop 200 large-format stores
■ UNIQLO Japan: Accelerate large store openings in urban areas
■ Expand further into the Asian market
■ Global flagship stores
■ HEATTECH Innerwear
Fast Fashion Brands in JAPAN
H&M
(Sweden)
Zara
(Spain)
Forever21
(USA)
# of Stores
1700 ww
6 jp
470 ww
1 jp
4200 ww
50 jp
Sales Billion Yen
1,400
1,400
160
2008
1998
2009
Mode of Entry
JV with BIGI
→ 100% own
H&M Japan
(FDI)
Operating
stores directly
from LA
Uniqlo
(JAPAN)
815 ww
760 jp
540 1984
1st store
in Japan
(data of Uniclo doesn’t reflect its holding company of Fast retailing)
Uniqlo Profile (First Retailing)
Established in 1984
By Mr.Yanai
Listed on Tokyo Stock Exchange 1994
Type of Business: Vertical Apparel Retail
Business Philosophy: High Quality at Low Price (Gap merchandising at Old Navy price)
Sales in 2010(Aug.): US$9.5 billion of which US$7.1 billion is Uniqlo Brand (75%), net profit $725 million
No. of Employees: 11,600
Uniqlo Growth: 1st Phase
1984-1997
1984: Mr. Yanai opened his first store in a rural town near Hiroshima named ―Uniqlo Clothing Warehouse‖ to sell basic casual clothing of fair quality at low price
Store Concept: Yanai was fascinated with Sam Walton who started Wal*Mart stores in rural America with his famous EDLP. He wanted to copy Wal*Mart in basic casual unisex clothing for all ages
By 1997, Uniqlo became the largest retailer of casual clothing with 300 stores and sales of about $880 million
Uniqlo 1st Phase cont.
But Yanai was not happy as he was only marginally profitable, and was very disappointed at a very low brand recognition despite some sizeable sales volume. And sales started to go down.
Also, he had to supplement his Uniqlo branded products with famous American branded products such as Nike, Champions Products, Russell Athletics, using them as a loss leader build traffic (notorious parallel importer) It was not truly an one brand store
Uniqlo Growth: 2nd Phase
1998-2007
1998: New Store Concept
Yanai changed his store concept to Gap from
Wal*Mart. Store positioning from rural to urban,
merchandising from basic casual (mostly
underwear) to jeans and casual, all ages to young
segment though remained unisex, and from so-so
quality at low price to high quality at low price. For
example, a good quality jeans at $29 while the
branded jeans price such as Levi’s and Edwin at
$59 and up
Uniqlo 2nd Phase cont.
Opened his first new Uniqlo store in Harajuku,
Tokyo and changed the logo to the current
one and the store and brand name to be just
―Uniqlo‖
Aggressive new store openings in urban
areas while closing or converting the existing
stores
Uniqlo 2nd Phase cont.
Repositioning paid off (partly helped by Japanese consumers going for low prices after the bubble burst) and in 1999, sales grew to $1.3 billion with 360 stores
Then came an explosive growth in 2000/2001 when the sales of fleece jackets offered at $19 skyrocketed to 26 million units and sales in 2001 hit $4.9 billion with 480 stores
Uniqlo 2nd Phase cont.
But sales decreased rapidly down to $3.5 billion in
2003
During 2004-2007, efforts made to increase sales by
diversifications into food, sports, kids, international
markets (China and UK) and acquisitions (Theory,
Cabin and others), and sales reached to $6.1 billion
in 2007
But profitability remained unimpressive as most of
new ventures not so successful
Uniqlo Growth: 3rd Phase
2008-present
New Merchandising Concept: Jeans, Casual and Underwear as National Uniform (all ages): key product was a thermal underwear called ―Heattech‖, two for $15
Heattech explosive sales paralleled to that of fleece jackets before, And came the Lehman Shock!
Yanai immediately reduced the price of most of products (like what Samsung did in the US) in the store, notably the jeans price went down to $19 from $29, resulting in 10 million units of sales. Furthermore,
Uniqlo 3rd Phase cont.
Created a new chain of stores called ―GU‖ to sell similar products as Uniqlo but at a much lower price than Uniqlo. For example, the jeans price is $9.90 to go after 10 million people below a poverty level of annual income less than $20,000
Aggressive store expansion: Uniqlo to 810 stores and GU 120 stores
2010: Sales reached $9.5 billion consolidated, $$7.1 billion for Uniqlo alone from about $3.5 billion in 2003
Uniqlo Future Objectives
To achieve $50 billion in sales in 2025 from about $10 billion by globalization
New growth to mainly come from international markets. At present, 9 countries with 143 stores only
Currently developing China (56 stores) while trying to build brand equity in the US and Europe by positioning concept stores in New York and Paris
Program to train 1000 foreign store managers by hiring in Japan and training in Japan. Hiring 200 foreign students graduating in Japan a year (APU is a biggest beneficiary from this)
English to be their official language
Leadership by Yanai
Top Down
Fast decision making/Speed
Judgment: Right decisions at the right timing (post Lehman decision and right hypothesis about changing consumer behavior)
Risk taking
Trial and Error (Does not believe in doing market research)
Fast Fashion:IGA
Est. in 2002
By Mr. Igarashi
Type of Business: Vertical Apparel Retailing
Store Name and Brand: Axes Femme
Target consumers: 25-40 years old women, high fashion low price
Sales in 2010: $127 million
No. of Stores: 120
No. of Employees: 151 plus 580 part time
IGA: Axes Femme
IGA: Axes Femme
IGA: Axes Femme
IGA: Axes Femme
3. Character Licensing: Crown
Creative
Character Licensing
Sanrio ―Kitty‖
ＡＦＬＡＣ
Fusahiko Yoshino / President of Crown Creative
Crown Profile
Established in 1993
By Mr. Yoshino (49)
Unlisted
Type of Business: Licensing
Business Philosophy: Keep shooting (creating)
Sales: $205 million (Retail sales value of all character brands)
No. of Employees: 15
Crown Creatives: History
Phase I (1977-1992): Stationery manufacturer
(Coca-Cola licensee)
Phase II (1993-2001): Master Licensing starting with
Kangol, Ben Davis and adding many other
properties. Phased out stationery business as
master licensing very successful but future not so
bright
Phase III (2002-present): Licensing own properties
by buying out Kangol and started creating own
characters such as Love Rabbi, Rebecca Bon Bon
Crown Phase 1: Manufacturing
Crown Phase 2: Master
Licensing
Kazumi Morohoshi & Tomomi Kahara / Musicians
Yu Hayami / Singer
Terry Itoh / TV Director
Yuzo Kayama / Musician & Actor
Crown Phase 3: Ownership
Licensing
Acquired Kangol for Japan, Choop, Batsu
Developed Northbury, Love Rabbi and many
others
Rebecca Bon Bon (RBB) is currently very hot
and expanding internationally
Hirohide Yakumaru / Talent
Kazutomo Miyamoto / Talent (Former baseball player)
Iyo Matsumoto & HIROMI / Talent (husband & wife)
Ai Kato / Female actor
Arisa Inasaka / Model of fashion magazine “Pichi Lemon”
Airi Takasaki / Model of fashion magazine “Pichi Lemon”
RebeccaBonbon Shops in Japan
Crown KSF
Leadership/Idea Generator: Top down
In house creative staff/ developing characters
to fit and take advantage of prevailing fashion
Networking
Own properties to license, not somebody
else’s
4. Knowledge: Intage
Est. in 1960
By Mr. Taori
Type of Business: Marketing Research
Sales in 2010 (Feb.): $405 million, No. 1 in Japan,
No. 10 Globally. Only firm in the industry with a
sales growth after the Lehman shock. Sales in 2006
was $337 million
Market Share: 20%
No. of employees: 1,966 incl. China and Thailand
Intage
Global Market Research: Top
5 Countries in Turnover: 2008
Country Turnover % of Total Change vs. PY
1. USA 8.9 27.4% +2.3%
2. UK 4.2 12.9% +2.4%
3. Germany 3.3 10.2% +17.9%
4. France 3.0 9.2% +15.3%
5. Japan 1.6 4.9% +14.3%
Top 5 Total 21.0 64.6% +7.1%
Global Total: 32.4
Unit: US$ Billion
Th
e P
rovis
ion
of In
sig
hts
Tailo
red
to
Sp
ecific
Ind
ustry
Secto
rs
Solutions and Services Unique to the INTAGE Group
Health
-care
Services
Consumer
Goods
Intage: Matrix Approach
Market Tracking
Strategic Solutions
Customized Services
Solutions and Services Optimized
for Clients and Specific Business Phases
Solutions for
Business Strategy
and R&D
Solutions for
Marketing Processes
Solutions for
Distribution, Retailing
and Sales
Solutions for
Production
and Logistics
Causal Info Tracking
Promotion
Effectiveness
Integration
Panel Research
Services
Custom Research Services
Consumer Panels Retail Panels
Retailers Consumers
INTAGE Marketing Research Services
Put simply, it is research that
uses same samples (consumers, retailers, etc.);
tracks consistent contents;
continues over an extended period of time. If we tried to conduct complete enumeration (e.g. national census)
it would take considerable time, money and manpower…
With Panel Research, we can estimate
the universe (total population)
by extracting a part of it (sample).
Panel Research
As a mirror of market and its changes.
What is Panel Research?
Universe (estimated figure)
Sample estimate
Current Design (4th Generation)
Universe: Households with 2+ family
members
Area: All Japan (excluding Okinawa)
Categories Tracked: ALL FMCG
Sample Size: 12,640 households
Research Method: Bar-code scanning
INTAGE’s Consumer Panel since 1964
12,640
What You Can Learn from
Consumer Panels
Competitors - Market share (units/value/volume)
Buying Behaviors
- Purchasing rate -Purchasing level per HH/person (units/value/volume) -Trial and repeat purchase, loyalty, basket analyses, consumer’s purchase level (heavy/medium/light)
Purchases - Purchasing level per 100 HHs/persons (units/value/volume)
- Average purchasing unit price (units/volume)
Consumer Attributes
- Consumer profile + demographics
平成二十二年十一月十八日
Universe
(34 mil. HHs)
Municipality
(473)
Strata
(632)
HH Panel
(12,640)
Stratified
sampling
Random
sampling Stratified sampling (Multiply the family members
by the wife’s age and stratify
the number by 8 categories.)
SCI Sampling Method
Three Stage Random Sampling
700
720
820
3460
760
1220
2300 860
1080
720
Hokkaido
Tohoku
Kanto
Keihin
(Greater Tokyo) Tokai
(Greater Nagoya)
Hokuriku Kinki
(Greater Osaka) Chugoku
Shikoku
Kyushu
Total : 12,640 HHs
SCI Sample Distribution
What You Can Learn from Retail
Panels
Competitors - Market share (units/value/volume)
Stores - Index per store selling item (units/value/volume)
Sales - Market size (units/value/volume)
- Average sales unit price (units/volume)
Distribution - Store count distribution (per tabulated store/per store selling item)
- Product category weighted distribution (units/value/volume)
Speedy, Timely and Accuracy
Daily, online data collection from large SM and CVS.
Weekly data searches possible the following week.
Combination with monthly data allowing provision of
weighted estimate figures representative of the market.
Promotion Effectiveness Measurement
Store promotion data collection and delivery such as
circulars and mass displays.
SPI – Understanding structures related to store
promotion and sales data.
Synchronizing with INTAGE Consumer Panels
Allows data searches with the same charts and terminal
as SCI
Integrated consumer purchase data and retailer data DB
service → Partner ＆Brains
Retail Panel: Key Success Factor of Marketing
INTAGE
Retail Panel
Research
GMS Self service store with store floor space above 3,000m2
and more than 50 staff
SM Self service store with store floor space from 500m2 to 2,999m2
Mini SM Self service store with store floor space from 100m2 to 499m2
CVS Floor space from 50m2 to 249m2 , fresh foods less than 30% of sales.
Business hours over 16 hours. Store closed less than 10 days annually.
Drug Store Stores selling drugs and OTC products
Home Center / Discounter Store floor space of above 500m2 with over 50% of household goods
SRI: Respondent Store Definition
226
481
379
986
247
522
754 430
659
305
Hokkaido
Tohoku
Kanto
Keihin
(Greater Tokyo) Tokai
(Greater Nagoya)
Hokuriku Kinki
(Greater Osaka) Chugoku
Shikoku Kyushu & Okinawa
Total : 5,221 retail outlets
SRI: Sample Distribution
232
Shinetsu
With the SM and CVS etc weighted estimate value offered
weekly, market
movements can be captured in real-time and rapid marketing
action
decisions are made possible
25
27
29
31
33
35
(%)
Weekly Monthly
Sept Oct Nov
2002 Autumn carbonated beverage ‘A’ Brand Share movement (SM & CVS)
SRI: Speed - Weekly Market Evaluation
ALARM
Share Volume share for new products
10-13 weeks after launch
Trial
Repeat
Advertising
Share
Height level =
Trial amount,
Advertising volume,
Quality and target
size
Fall = Repeat occurrence
Product power ⇔SCI repeat
Re-ascent
SRI: New Product Evaluation
3 weeks after new product launch forecast sales volume in 3 months time
INTAGE
proprietary
model using
weekly data
SPI: Promotion Effectiveness Measurement
6.0 6.3 3.9 5.6
13.2 13.9
1.5
3.3
13.7 6.0
14.0
7.1
60.6 55.7
64.4 61.5
―Product X‖ Promotional effects
0.0
5.0
10.
15.
20.0
25.0
30.0
35.0
40.0
4 Jul. - 11 Jul. - 18 Jul. - 25 Jul. -
Valu
e S
hare
(%
)
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
Dis
pla
yin
g R
ate
(%
)
No Display & No Chirashi Display & No Chirashi
Display & Chirashi Displaying Rate
Intage: KSF
Leadership by Mr. Taori
First mover advantage in developing consumer and retail panel (pre-empting Nielsen and other foreign firms)
In house systems (investment and risks)
Sound judgment in expanding services such as healthcare, on-line survey, integrating data and offering solutions ( timing and type of services)
Successful Japanese Firms:
Summary of KSF
Strong leaders (founders or second
generation)
Fast decision making
Sound judgment
Risk taking
Global perspective
FSA (Firm specific competitive advantage)
5. Low Cost Retailing:
Restaurant Chains
Sushiro (Sushi chain)—266 stores in Kanto
Ohsho (Chinese noodles/pot stickers)—555
stores
Gyu-kaku (BBQ Meat)--1,000 stores
Sukiya (Sukiyaki-don)—1,482 stores
Yoshinoya (Sukiyaki-don)—1,178 stores
Saizeria (Italian)—836 stores
Low Cost Retailing cont.
ABC Mart (Footwear)
Muji (apparel and accessories)
Shimamura (Apparel)
Yamada Denki (Electronics/Appliances)
Bic Camera (Electronics/Appliances)
Nitori (Furniture)
6. Green/Eco/CSR
Japan efforts highly concentrated in solar
energy by existing large corporations such as
Sanyo (Panasonic), Sharp—no recognizable
start ups
Many startups in linear LED lighting, but too
early to tell who’s winner here (Large existing
firms like Toshiba, Panasonic concentrating
on LED bulbs
6. Manufacturing
Over-all, Declining. SME’s hard hit as large
corporations move off shore (need to go off
shore with them, or replaced by local SME’s)
as well as lack of successors
Still a lot of Japanese SME’s with excellent
technologies who are doing well
Japan SME’s strength: B to B rather than B
to C
Manufacturing cont.-No. 1
Firms Globally
Shimano (Intel of the Bicycle industry)
Kaihara (world class high end denim)
Nichia Kagaku (LED chips)
Atago (Refractometer): Measure taste of soup and others used by restaurant. 30% of Global share at $21 million
Morinaka (Industrial tanks): No. 1 in stainless tanks. $480 million
Takenaka (Specialty bolts for bridges and atomic power plants): 50% global share at $33 million
Nemoto (Illuminating paints/smoke sensors): 80% global share at $70 million
Manufacturing Cont.
Konan Medical ( Take a photo of cornea for
Cataract operations): 40% global share at $10
million
Kitahara (fireworks): Now mostly made in China,
over 200 firework events in many countries
Hidehiro (Measuring instrument for solar batteries):
70% domestic share, increasingly adopted by
foreign solar energy firms such as Suntec at $22
million
DMP (Imagery processing technology, you can 3D
image without a 3D lens): Nintendo 3DS, $12 million
Successful Japanese Firms:
Summary of KSF
Strong leaders (founders or second
generation)
Fast decision making
Sound judgment
Risk taking
Global perspective
FSA (Firm specific competitive advantage)
Related Documents
![[Japanese Culture] Japanese Fairy Tale](https://static.cupdf.com/doc/110x72/577dab5a1a28ab223f8c5222/japanese-culture-japanese-fairy-tale.jpg)
![ミニ2セット文字一覧（合計文字数4,833文字）...!"#$%&'()*+,-./0123456789:;?@ABCDEFGHIJKLMNOPQRSTUVWXYZ[¥]^_`abcdefghijklmnopqrstuvwxyz{ }˜ʼ\ʻ|~“”Å、。，．・：；？！゛゜](https://static.cupdf.com/doc/110x72/5fc17b0179c121258a6258a8/ff2fffeie4833i-0123456789abcdefghijklmnopqrstuvwxyzabcdefghijklmnopqrstuvwxyz.jpg)