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< Example 9 >
Achieving vitalized organization and performance improvement through upgrading management structure |
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Inoue Shobo Yugen Kaisha
Line of business: Retail bookstore operator which also handles textbooks for elementary schools, junior high schools and high schools (5 retail stores of books, magazines, CDs, DVDs, stationery; 1 store of animation goods, 1 cartoon cafe)
Head Office: Itano-gun, Tokushima Prefecture
Capitalization: 11,000,000 yen
Founded: January 1955
Sales: 1,350 million yen (period ended July 2003)
Employees: 23 (plus 24 part-timers)
Representative director: Mariko Inoue |
In pursuit of store-making under the catch phrase "Specialty Shop for Individuality Seeker"
 The environment that surrounds bookstores is harshening because of larger-size bookstores, chain bookstores, convenience stores selling books, secondhand bookstores selling "new" secondhand books, bookselling over the Internet, decreasing number of children, increasing tendency not to read, slumping publishing industry...... bookstore operators find themselves in an unprecedented difficult age.
As compared with other retail businesses bookstores are subjected to low margins while a peculiar type of transaction is practiced e.g. lump-sum distribution and returns. As a resale-price maintenance system in place keeps fixed prices, differentiation from other stores is difficult in this business.
Since foundation in 1959 Inoue Shobo has been dealing in textbooks for elementary, junior high and high schools. In addition the company has deployed stores in a wide range of types and places such as a bookstore in front of Tokushima Station, an adjacent cartoon café, animation goods stores, university co-op stores and roadside-type suburban stores. The company has been pursuing store building that corresponds to locational conditions and types of customers under the catchphrase "Specialty Shop for Individuality Seeker".
In what concerns the community the founder-chairman puts her efforts in local cultural activities: she organizes "Children's Society" that aims to hand down hearts of children's songs and invites each year chorus groups from different places to celebrate a rollout. President Mariko Inoue, successor to the founder, maintains a wide range of human connections in the region through the local chamber of commerce and industry and goes to Tokyo or travels to visit overseas exhibitions in search of business opportunities. Thus, she is proactively responding to changing management environments.
Although the company has continued growing sales through development of multi-store strategy and new types of business, it has not adequately addressed the problems involving control system, education of management staff and financial strength. Inoue thought strengthening management is indispensable to further step up her business. This is how she came to visit the SME/Venture Total Support Center/Shikoku. |
Rapid growth through multi-store development without supporting management
Inoue raised two themes on which she asked the Center for dispatch of experts: (1) how to build a company all employees can be proud of, and how to establish (2) a financing strategy and building stock control system.
The Center conducted preliminary fact-finding to see what are the concrete tasks that should be addressed by management. The preliminary fact-finding revealed that the company's ordinary profit is secured not from operations but from other income such as rents, that the company has been virtually in the red in terms of operating profit over the last three consecutive periods and that management has been absent behind the rapid growth achieved through multi-store development. Such situation has resulted in seasonal deficient cash positions, which have been covered by overdraft facilities under good relations with the financing bank.
The first thing addressed by the dispatched expert (Small and Medium Enterprise Management Consultant) was to clarify profitability situation by store and item handled so as to set up a profit-making structure. Measures to be taken on non-profitable stores or items were thoroughly discussed with executives including if necessary store managers. Any decision taken then was put into effect immediately, including store manager shifting. Next, annual budget was drawn up with the participation of store managers, in which process different measures intended for achieving objectives were incorporated.
The second support performed was on operation flow (sales, purchases, returns, cash control, cost control and labor control) and job authority and responsibilities, all of which were made into rules. In addition, recommendation was made on revision of wage system, which. is underway.
The third thing addressed was for the president to hold each month a store manager meeting which has never been held over the last few years. Director Inoue, president's eldest son, will preside over the meeting, at which he will show in turn plans and achieved results and will see that the tasks be addressed. Through monthly meetings each store manager is able to understand management information and get to share sense of crisis and awareness of problems. Meetings have had all store managers strongly motivated.
On the other hand, suburban stores conducted a questionnaire survey on customers to check on the gap that exists between the specialties of stores and customers' needs, level of customer satisfaction, etc. Results thus obtained are shared by all stores as showing points for improvement. The company also had all its stores diagnosed by Japan Small and Medium Enterprise Corporation in terms of energy consumption, which helped reduce electricity bills. |
Sales target achieved at all stores; store vitalization bears fruit
At each monthly meeting, store managers gradually began to let out wisdom and contrivance, put them together and integrate them. All this led all stores to achieve target sales budgets and post operating profit. At the end of December 2002 the company's cashflow improved and overdraft debts (almost 40 million yen) were all repaid.
At the same time, rules of conduct were made clear at all stores as to "what to do". It vitalized stores and led to a lot of ingenuity and contrivance: shelved were replaced or interchanged based on the information obtained on hot-selling items; a variety of events were performed; and the Web site was renewed, etc.
Several points may claim to have contributed to successful structural improvement of Inoue Shobo. First, the top executive put confidence in the Center and had positively disclosed accounting information. At the same time, executive managers were able to enforce decided measures based on their understanding of the actual state of the business.
The company plans to have a new president three years later. Director Inoue was happy to remark: "The vision about what the company and I myself will be in five years has been put in writing thanks to the expert's support. Now that the picture we wish to realize has been clearly shown, we have been able to develop well defined rules of conduct as to what to do at this moment toward realization of the dreams." |
< Comments of Representative director >
"Thanks to the Center's support, our company has become what a company should be. I am very happy that in such a short time the Center's support has turned out to be so fruitful. My successor has acquired practical management skills and started showing some leadership. I am happy about it. For the future, I'd like to have an outlook over an upcoming IT society and changes in educational environments and seek to develop new types of bookselling business. I'd like to continue counting on the Center's support." |
(prepared by Organization for Small & Medium Enterprises and Regional Innovation, Japan)
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