Daimaru Department Store’s Turnaround Strategy Led by President Okuda Tsutomu
Daimaru Department Store, one of Japan’s largest retail chains, underwent a major transformation in the late 1990s under the leadership of its new president, Okuda Tsutomu. Okuda, who hailed from a family of successful businesspeople, was selected to lead the company and immediately set out to make significant changes.
One of the first steps Okuda took was to address the complex web of relationships and interests that had developed within the company over the years. He made the difficult decision to lay off employees who were deemed unnecessary or redundant, a move that had previously been considered too risky by his predecessors.
At the time, Daimaru had numerous storefronts and departments, each with its own set of operating procedures and management practices. These practices were often guarded closely by the employees in charge, who considered themselves experts in their respective areas. This lack of communication and collaboration across departments had led to inefficiencies and high operating costs.
Okuda, who had worked in retail operations in the United States, Australia, and Japan, recognized that there was a need for significant changes to be made in the company’s sales structure and layout. He focused on improving efficiency while maintaining a high level of customer service, and began by standardizing operating procedures across all departments.
To achieve this goal, Okuda had to overcome the challenge of getting employees to work together and take responsibility for the company’s success. He recognized that this was not just a technical problem, but one that required a change in mindset and culture. He encouraged employees at all levels to take an active role in the company’s ongoing improvement process.
In addition to addressing these cultural issues, Okuda also reclassified the store’s inventory, which at the time consisted of over a million different products. By simplifying and streamlining the product offerings, he was able to reduce costs and increase efficiency.
These changes were not without their challenges, however. Okuda faced significant resistance from employees who were used to working independently and were hesitant to embrace change. He also had to navigate complex relationships with suppliers and other stakeholders who were resistant to the changes he was proposing.
Despite these challenges, Okuda remained committed to his vision for the company and continued to push for change. Over time, his efforts paid off, and Daimaru began to see significant improvements in efficiency and profitability.
Today, Daimaru is recognized as one of Japan’s most successful retail chains, thanks in large part to Okuda’s leadership and vision. His willingness to take risks and challenge established practices has become a model for other companies looking to transform themselves in today’s rapidly changing business environment.
In conclusion, Okuda Tsutomu’s leadership at Daimaru Department Store serves as an example of how a company can successfully transform itself by addressing cultural issues and embracing change. His vision and determination have helped Daimaru become one of Japan’s most successful retail chains, and his legacy continues to inspire other companies to pursue their own transformation strategies.
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