Founding Tama Home: spinning the low-cost housing division out of the family firm (1998)

What it meant to carve a price-first company out of the family business

The core of this founding decision lies in reversing the order of pricing a house. Rather than adding up costs to arrive at a selling price, it fixed first the ¥248,000 per tsubo that customers could pay, and then made a house buildable at that price work through design and procurement. Tamaki Yasuhiro had spent six years proving the pattern inside the family construction business, and he deliberately carved it out into a separate company, launching it as a specialist that pursued nothing but low-priced volume. Left mixed in with the existing construction business, an operation committed wholly to mass production and standardization would likely have been difficult to run. The character of this founding can be seen in the way a first-person conviction acquired in America — that Japanese houses are too expensive — was carried all the way down into the design philosophy of the business.

That said, a model that puts price first is strong while volume grows and carries a weakness when demand contracts. After listing, the 2014 consumption-tax increase stalled the low-price flagship and Tama Home sank into two consecutive years of net losses. The founding pattern was not universally effective as it stood. Even so, it remains the case that what drove a single regional Kyushu firm to a TSE First Section listing in fifteen years was the view of price that came out of that American experience, and the decision to carve it out as a dedicated company. In placing at the centre of the business the question of how much quality can be mass-produced at what price — rather than expansion of scale as such — this founding decision occupies a distinctive position within the housing industry.