Tombow in Japan
Executive Summary
The Tombow Pencil Co. established in the early 20th Centaury has survived many difficult times in Japanese history, including the Second World War, numerous recessions and fundamental technological changes affecting its market. However, profits have declined and remained low during the 1990’s despite efforts to modernise.
In reviewing this case it is tempting to view its current methods as inefficient, with an over-reliance on many subcontractors, with the temptation of following a Western European/USA model of centralising production and driving tighter Arms Length Contractual Relations (ACR) to drive efficiency and reduce costs.
However, the business system operating in the region is of great importance. There are many deeply rooted cultural influences which can affect the attitudes towards business, but by accepting and embracing the local business culture a smoother more successful and ultimately less risky path to success may be possible.
In this analysis, the fundamental Japanese principles of the Keiretsu, the close knit knowledge sharing manufacturing network, is seen as the main focus for improving the future prosperity of the company and its suppliers.
Table of contents
Introduction Page 4
Analysis of Tombow Subcontracting Page 5
The Changing Business Environment Page 7
Distribution Channels Page 8
The Need for Change Page 10
Lessons from International Business Systems The Western Approach Page 12
The Japanese Business System and Culture Page 13
Conclusion Page 14
Reference List Page 15
Appendix 1 – History (taken from case study) Page 16
Appendix 2 – Tombow Case Study Exhibit 2-B Page 17
Introduction
The Tombow Pencil Co. Ltd is a Japanese writing instrument manufacturer, enjoying sales in 1990 of 16,133 M Yen. Its largest competitor is Mitsubishi, with sales of over 41 M Yen. It is clear however that Mitsubishi are
The Tombow Pencil Co. established in the early 20th Centaury has survived many difficult times in Japanese history, including the Second World War, numerous recessions and fundamental technological changes affecting its market. However, profits have declined and remained low during the 1990’s despite efforts to modernise.
In reviewing this case it is tempting to view its current methods as inefficient, with an over-reliance on many subcontractors, with the temptation of following a Western European/USA model of centralising production and driving tighter Arms Length Contractual Relations (ACR) to drive efficiency and reduce costs.
However, the business system operating in the region is of great importance. There are many deeply rooted cultural influences which can affect the attitudes towards business, but by accepting and embracing the local business culture a smoother more successful and ultimately less risky path to success may be possible.
In this analysis, the fundamental Japanese principles of the Keiretsu, the close knit knowledge sharing manufacturing network, is seen as the main focus for improving the future prosperity of the company and its suppliers.
Table of contents
Introduction Page 4
Analysis of Tombow Subcontracting Page 5
The Changing Business Environment Page 7
Distribution Channels Page 8
The Need for Change Page 10
Lessons from International Business Systems The Western Approach Page 12
The Japanese Business System and Culture Page 13
Conclusion Page 14
Reference List Page 15
Appendix 1 – History (taken from case study) Page 16
Appendix 2 – Tombow Case Study Exhibit 2-B Page 17
Introduction
The Tombow Pencil Co. Ltd is a Japanese writing instrument manufacturer, enjoying sales in 1990 of 16,133 M Yen. Its largest competitor is Mitsubishi, with sales of over 41 M Yen. It is clear however that Mitsubishi are