Toshifumi Suzuki 1932— Biography - Lessons from abroad

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Toshifumi Suzuki 1932— Biography

Toshifumi Suzuki

1932–

Chairman and chief executive officer, Ito-Yokado Group and its<br>subsidiary, Seven-Eleven Japan Company

Nationality: Japanese.

Born: December 1, 1932, in Nagano prefecture, Japan.

Education: Chuo University, Tokyo, BA, 1956.

Career: Worked in a publishing sales company until 1963, when he joined<br>Ito-Yokado Co.; first president of its subsidiary, Seven-Eleven Japan, in<br>1973; has remained with Ito-Yokado group through 2004.

Awards: Voted the fifth most respected business leader in Japan,

Nikkei Industrial News

, January 2004.

Publications: Coauthor,

The Essence of Management: Spontaneous Managerial Decisions Based on<br>Conviction

[in Japanese], 2000;

The Starting Point of Business,

2003.

Address: Ito-Yokado Company, 8-8, Nibancho, Chiyoda-ku, Tokyo 102-8455,<br>Japan.

■ Toshifumi Suzuki, head of the giant Ito-Yokado Group of Japan,<br>helped revolutionize his country's retail sector, previously known<br>for its inefficient, hidebound practices. He introduced franchising to the<br>Japanese retail industry in 1974, as founder of Japan's<br>Seven-Eleven convenience stores, which eventually grew to a chain of over<br>10,000 units by 2003, many of them operating 24-hours a day. He pushed the<br>franchise concept in new, creative directions, and then turned around in<br>1991 to rescue the U.S. company that originated the brand. He has been a<br>pioneer in the gradual introduction of business-to-consumer e-commerce and<br>a forceful public spokesman for economic liberalization and reform.

Suzuki belied all the stereotypes of the consensus-based Japanese business<br>style and was never deterred by opposition within or outside his company<br>or by appeals to tradition. Using the leverage of his growing retail<br>empire, with over $28 billion in worldwide sales in 2003, he succeeded in<br>streamlining much of Japan's multilayered consumer-product<br>distribution

Toshifumi Suzuki. ©

AFP/Corbis

system and helped introduce a more consumer-driven orientation to product<br>development and manufacturing. Perhaps his most forward-looking<br>achievement was Seven-Eleven Japan's integrated data systems, whose<br>up-to-the-minute sales, customer, inventory, and supply-chain information<br>dramatically improved productivity, profitability, and responsiveness to<br>consumer needs. Suzuki devoted more than 40 years to finding creative ways<br>to wring ever-more value from his company's assets for stockholders<br>and customers alike.

LESSONS FROM ABROAD

Born in 1932 in the then-rural Nagano, 125 miles northwest of Tokyo,<br>Toshifumi Suzuki moved to the capital after finishing high school. He<br>received an economics and commerce degree from Chuo University in 1956,<br>where, by his<br>own later description, he was a student protestor; he also did a stint as<br>labor-union leader. Suzuki left a promising career in publishing sales<br>after a fateful 1963 meeting with the legendary retailer Masatoshi Ito,<br>who was then in the process of parlaying his family's modest<br>40-year-old clothing business into one of the first chains of superstores<br>under the company name Ito-Yokado. This new type of consumer emporium<br>combined separate food, clothing, and other stores into one unified<br>location. It proved to be a successful attempt to work around retail laws<br>that limited department stores. These laws, passed originally in the 1930s<br>and strengthened in the 1950s, were designed to protect the omnipresent<br>mom-and-pop neighborhood markets.

Suzuki became a director of the company in 1971. By then, the small<br>markets had succeeded in imposing legal limits to the superstores too, and<br>Ito-Yokado began shopping around for other growth options. In 1973 Suzuki<br>was instrumental in licensing the Denny's name for a chain of<br>restaurants. During his repeated visits to the United States to clinch<br>that deal, he became enamored with the country's thriving<br>convenience-store chains, especially the brand leader 7-Eleven of Dallas,<br>Texas. He immediately recognized the potential of convenience stores for<br>Japan.

Japanese consumers had long been in the habit of shopping several times a<br>day for small quantities of food. They placed a high value on freshness,<br>and their homes tended to be small, with tiny kitchens and little storage<br>space. Frequent shopping and crowded roads reinforced the need for small,<br>local food shops carrying a limited range of staples. The small shops<br>suffered, however, from antiquated management styles, poor capitalization,<br>and a weak position in the face of distributors and manufacturers. It had<br>become conventional wisdom, shared by most Ito-Yokado executives, that<br>only large stores could achieve productivity, through economies of scale<br>and professional management. Backed by economic consultants and industry<br>experts, Suzuki's colleagues saw no demand for any additional small<br>markets in the crowded Japanese retail scene.

Acting the part of visionary, Suzuki argued that...