by Hisakazu Matsuda

You hear a lot about the ongoing financial crisis, how companies are losing money and shedding jobs. But take a look at the bigger picture and we see something unexpectedly encouraging.  Even though many companies in Japan and the U.S. are struggling in these hard economic times,  a large minority continues to flourish. 

Japan's Situation - Lean Economic Times
  During each of the three “economic crises” to hit Japan, somewhere between 28% to 32% of companies continued to see rising sales as well as rising profits.  The chart here shows this unlikely outcome.   Even factoring in the weak performers  --  a steady 5.7%  of firms that suffer falling sales during the downturns yet still eek out increased profits, and  another group of firms that sees sales increase while profits fall -- the economic crisis no longer look so one-sided.  All of this reminding us that in any market there will be companies that respond faster and rise to the top.  These are the truly built-to-last companies.   Click to Enlarge
   
 
 Mayo, Tea and OTC
 Despite all the bad news, today’s  economic crisis is no different from previous downturns.  Let's look at three companies that have maintained their places in the elite “increased sales and profits” club throughout each of the past three recessions:
         *  Kewpie, food products firm -famous in Japan for its mayonnaise,
         *  Itoen, maker of high-quality teas and beverages,
         *  Takeda Pharmaceuticals, medical supplies and OTC  drug maker.
Among the three there are some similar strategies and interesting differences.  By examining them we can learn  what  
strategies contributed to continued success despite the tough                                       
times.                                                                                                                         Click to Enlarge
Itoen and Kewpie share the advantage of having well-known brands perceived by Japanese as high quality.  Itoen makes drinks with mass-market appeal such as bottled water and tea.  These items have become popular with health-conscious consumers because they are perceived as health and wellness related thanks to Itoen's clever positioning strategy.   This makes them less subject to the negative impact of  prevailing economic conditions.  Also, Itoen controls the quality of its tea from the fields to the final product, a quality strategy that is hard for wannabe companies to imitate.  Both companies have also diversified their product lines--  Kewpie has come out with a range of healthier products, including zero calorie salad dressings--and both have been adept at predicting consumers’ needs and then quickly filling those needs with new product offerings.
The third company in the thrivers group, Takeda Pharmaceuticals, is less well-known to the public overseas.  While the Japanese market for over-the-counter drugs is growing, Takeda has focused on higher margin medical supplies market, producing products for health care professionals-- doctors and the like.   They have also taken aggressive steps to enter the US market.  Arguably the biggest reason for their success has been their vigorous and agile execution of  cost-cutting measures.  Redeploying the resources it saved by reducing headcount and underperforming businesses, Takeda has cut expenditures and re-invested  the savings in the company, allowing it to focus on protecting market share and expanding into new markets.

Lesson from Lean Times
Three overall trends can be gleaned from the example of these three companies:
        *  diversify,
        *  preserve market share,
        *  listen to and act on consumer needs. 
More than anything else, these companies have listened to what consumers wanted and have responded accordingly.  These basic ideas can be put to use by both marketers and strategic planners to better help steer their companies through the current turbulent economic times. 

For more about the companies mentioned, see our JMR profiles (in Japanese for subscribers), at   Kewpie,  Itoen,  Takeda Pharma.