1 The Apprentice
2 Seeking a New Market in Tokyo
3 On hte Move
4 Lead by Example
5 Starting with Less than Nothing
6 A run of Bad Luck
7 Company Foundation
8 The Third Crisis
9 Entry into the Electric Appliance Industry
10 SANYO Move into the Appliance Business
11 Venturing into the Global Market
12 Great Leap Forward
13 From President to Chairman
14 The End of An Era

The Life And times of Toshio Iue. Founder of SANYO

3 On the Move 1 2 3

Closed Territory System


Closed Territory System
Toshio was married soon after his return to Japan, but sadly his new bride came down with pneumonia and died shortly after the ceremony. Emotionally wounded, Toshio could not shake off a feeling of depression. At his sister's suggestion, Toshio decided to remarry. In October of 1927, Toshio wed his brother-in-law's sister. Ready to build a family, Toshio once again immersed himself in work. Though an economic slump was being felt worldwide, Matsushita Electric was leading the industry with its extremely popular box lamps invented by Konosuke Matsushita. The company prospered and from 1927 to 1929 facilities were expanded and new factories established one after the other, with the aim to build a nation-wide sales network.
Konosuke was often sick, and as Toshio was second in command that meant being constantly on the move. In 1929, Toshio and his wife moved to Nagoya to establish a new plant and lived there for six months before returning to Osaka. It was also at this time that his eldest daughter was born. The family then moved to Tokyo the following year where his eldest son (Satoshi Iue, current chairman of SANYO) was born in 1932. In 1933, they once again returned to Osaka. During these ten years, Toshio and his family were to move ten times.
In December of 1935, Toshio at age 33 was appointed Managing Director. He also held eight other posts (such as president, vice president, managing director, etc.) at Matsushita subsidiaries. Accordingly, he was required to travel overseas to branch offices and plants in Manchuria and Taiwan.
One example of his keen business sense can be seen from his experience in 1936 in Hamamatsu, Japan. Acting as Managing Director for a subsidiary, Toshio was interested in the sales performances of the company's dry batteries. On learning that sales in this district saw little growth over a three-year period and knowing that other districts were enjoying a 40% increase, he decided to investigate. After visiting several retail stores, he discovered that one shop was purchasing products from two Matsushita distributors.
Further investigation revealed that the shop lists of the four distributors combined totalled fifteen hundred when there were only 750 retail shops operating in Hamamatsu. Clearly retail shops had multiple distributor accounts creating excessive competition and stagnating growth. To correct the situation, Toshio set up a closed territory system by having the owners of the four distributors agree to divide Hamamatsu into four territories. With this system needless conflicts were eliminated and healthy competition ensued under fair rules.
Results were visible in just two months, and within a year Hamamatsu's total sales for dry batteries overtook all other districts. Toshio applied the system to other areas and eventually Matsushita dominated the dry battery market in Japan. Though common now, at the time this closed territory system was rarely practiced.

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