Monday, July 14, 2008OLD COMPANIES (older than 200 years!)
In the May 12, 2008 edition of the NIKKEI WEEKLY, a company named Kongo Gumi was mentioned. The company lasted as a family run business for over 1,400 years until 2006! The company apparently had financial problems and another company, the Takamatsu Corporation took it over. According to wikipedia this is the oldest continuous company in the world. No, I don't think I'm related to the Takamatsu Corporation.
In the following week, the NIKKEI WEEKLY ran an article called "'Creative Destruction' helps age-old firms." According to this article Japan has the highest number of companies over 200 years old at 3,113. Germany has the second highest number at about 1,500 and France has the third largest number at little over 300. I guess the secret to the longevity of these Japanese companies is their willingness to change and adapt to new technology. The companies engage in "creative destruction" in eliminating the old business to make way for the new business. One of the companies, profiled, Suzuyo, withdrew from selling coal as oil became the prominent fuel, source and switched to selling gasoline. Now the company is planning to go into the airline business. One way a company survives is by anticipating future trends and plan according to those trends. Unfortunately it is not always easy to tell what the future trends will be. I remember a video store switching to laser disks in anticipation of consumers buying laser disks over VHS videos. Unfortunately for that owner, that did not happen and his store closed. How was that owner to know that DVD was the format of the future? One has to be very careful in discerning future trends. Sometimes the change is not in the product. One company decided to introduce franchising to survive. Another company, which sold dried bonito (fish), used shopping vouchers as a marketing tool. The voucher, shaped like a bonito, could be exchanged for a real dried bonito. This article on the "creative destruction" used by the Japanese companies to survive illustrated the foresight and creativity used by the companies to survive. Some may also say the companies had good luck. But one may also argue that perhaps a providential hand was guiding these companies.
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