Management Issues Faced by the Client

The client is a typical owner-operated company that has been run by the same family since its establishment. Having made components for the recreation industry for many years, the company had established a certain position and market share in that field.

However, the industry’s dependence on domestic demand resulted in its decline as a consequence of the shrinking population and economic stagnation in Japan. Although the company was still able to generate operating income, sales were slowly shrinking, introducing the risk that in 10 years the company would go into the red and the business would no longer be viable. The biggest management issue was therefore to create new business(es) that would be able to compensate for the contraction of the existing business.

However, lacking any prior experience with starting new businesses, the company vacillated, not knowing where to begin. As they searched for a consulting firm that could support new business development, they became interested in FMI’s Management Executive Support Division, which provides comprehensive support for new business development, covering not only the planning but also the execution. FMI therefore began to support them from the start of their new business initiatives.

The Content and Approach of the Support We Provided

We have been supporting the client over two years, divided into three major phases.

[Phase 1: Establishing a Structure for the Development of New Businesses] The client was starting from scratch, with neither a department nor any personnel for new businesses. The first step was therefore to create a new business development department as an organization under the direct control of the company’s executives. Six people were selected to be assigned to this department through a process that also used a Design Thinking test to measure the right brain power required for new business development.

At the same time, we identified and articulated the company’s core competencies, which will constitute the “axis” of new business development, by analyzing the company’s growth history and interviewing a wide range of people, from executives to front-line workers.

[Phase 2: Expanding New Business Ideas and Picking Out Those that Stand Out] We issued a call to people in the company to offer a large number of business ideas that would utilize the company’s established core competencies. In addition, several professionals from FMI submitted business ideas created from a market perspective. In total, we created a pool of around 250 business ideas.

FMI’s view is that picking out the ideas that particularly stand out from among a large number of business ideas will significantly affect the probability of success of new businesses. Based on this viewpoint, we utilized “VISITS Forms,” which are a form of innovation technology that assigns points to ideas based on their advantages and disadvantages. In this way, we picked out 30 ideas with the top scores from among roughly 250 total business ideas. Following additional research, analysis and discussions with the client, we ultimately settled on two business ideas for further development.

[Phase 3: Business Development and Launch] FMI also provided “body-on” support with our staff stationed full-time or part-time with the client to work as a single team with the client to propel them through various steps of business development, such as business modeling, business verification and launch of the business. The client granted FMI the positions and business cards of CINO (Chief Innovation Officer [Executive Officer]), Head of the New Business Development Department, and the Deputy Manager of the same department. FMI then worked to acquire new customers and negotiated partnerships on the client’s behalf. The first new business launched 2 years after we started supporting the client.

Results Achieved Through This Project

Starting from scratch, we were able to launch a new business within the relatively short time period of just two years. The new business is currently being developed with the aim of turning a profit. The market’s response thus far has been positive, as the client company’s strengths are being put to good use and the product is one that anticipates social change in the near future. Product-market fit appears likely to be achieved.

In addition, through the process of business development, we have contributed to the development of human resources for the client’s new business development team, as well as the construction of a new business development process customized for the company. Furthermore, the client’s gratitude was of priceless value.