Media Partner the newyork times

Hankyu Toho Group

Founder

Ichizo Kobayashi

Hankyu Toho Group
A man who took the nature of business to its extremes

Commerce is unchanging in its simplicity. If the demands of the buyer and the supply of seller match up with one another, commerce is achieved. Therefore, the seller side needs to find customers who desire their product. However, "finding customers" is difficult to achieve successfully, and modern Japanese companies are sluggish. However, Hankyu Toho Group founder Ichizo Kobayashi created an incredible business model for finding customers a century ago.

Born in 1873, Ichizo Kobayashi was originally an orphan and raised by his uncle and aunt. During the schooling period in Keio University he was a young literature enthusiast with aspirations of becoming a novelist, but he failed to achieve that dream and became a bank employee instead. At age 34, he was transferred to work in Osaka, and attempted to branch out as manager of a securities company, but this also ended in failure due to depression. Finding himself unemployed with a wife and child, he set out for a future in the railway business, purchasing the stock of "Minoh Arima Electric Railway Co." and focused on duties as managing director there. There was no president at this company, so Ichizo was in actuality in charge of the administration.

At this time, Ichizo had other things in mind in addition to the railway business. What he envisioned was the creation of one large commercial sphere targeting passengers of railway.

Specifically, establishing a railroad would be followed by residential areas naturally being built along it, so he attempted to also create the residential area itself. Furthermore, he assumed that residents of these residential areas would be neither poor nor rich but middle-class. He thought entertainment and shopping facilities that were neither too coarse nor too refined would be necessary. This idea led to the creation of the modern Takarazuka Revue Company, the professional baseball team Hankyu Braves (currently Orix), and Hankyu department store.

In this way Ichizo laid out the management strategy for a private railway company which has been succeeded to today, and then bought up more and more land. The aforementioned Takarazuka Revue Company was founded in 1914, and the Hankyu department store opened in front of Osaka Umeda station in 1929.

At that time there were no examples of a railway company managing a department store in Japan or even abroad, but if customers were using the railway, they would necessarily be walking to the station. By building directly operated stores there, he thought he could drive large numbers of customers without effort. This scheme was a great success, and Hankyu Department Store thrived even during the global depression.

The reason many Japanese companies are currently sluggish is because traditional markets are saturated and new markets cannot be found. In this circumstance, what modern business persons should do is creating new demands by combining the traditional commerce methods, isn’t it? Ichizo's massive success is sure to be a pattern for this.

Hankyu Toho Group
Hankyu Toho Group

*Information accurate as of time of publication.

Hankyu Toho Group

Founder
Ichizo Kobayashi