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Zennovation: An East-West Approach to Business Success by Mortimer R. Feinberg, PhD, Adam Taki, Tomio Taki

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CHAPTER 7

The Break from Culture

A new era had emerged—one in which Takihyo’s fiscal strength came into question. The 1970s demonstrated the susceptibility of all companies—no matter how high the quality of the product, the management, or the institution—to macroeconomic stress. The demand for dresses that had previously flown off the shelves evaporated. Once-profitable subdivisions fell from well into the black to deep into the red. For the first time since my appointment as the chief executive, Takihyo held rather than distributed warehouses of inventory. We were bleeding; we needed relief. Many feared that the Nixon shocks and the oil and energy crises would bury Takihyo.

Because textile-and-garment manufacturing and wholesaling comprised the bulk of Takihyo’s revenue stream, we held a lot of inventory. In healthy markets, demand within distribution channels dictates the flow of goods: some to regional chain stores like Uny and Jusco, and others to regional wholesalers. In normal markets, goods are in constant flow; however, the slump in consumer demand during the early 1970s forecasted a different—and difficult—road ahead.

The upside to manufacturing and wholesaling is the elimination of the middleman. We create and distribute, so there are no agent or licensing fees for sales. Instead of introducing a third party, we would reap the benefits of higher profit margins by utilizing in-house wholesaling after production; instead of one area in which we could profit, there were ...

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