Do not wait for demand, create it — running on demand creation through the oil shock (1976)

Is demand a given, or something you make?

The core of this decision is that it declined to treat swings in external demand as a given, and dug demand out for itself on several fronts at once — finance, land, brokerage and range. As the oil shock thinned housing demand and the large late entrants withdrew, Sekisui House lowered the money barrier with its own housing loan, cleared the land barrier with the uridate model, removed the trade-up barrier with Sekiwa Real Estate, and answered the diversification of taste by turning itself into “a department store of homes.” Every one of them ran on the same idea: not waiting for orders, but excavating them.

The profit judgement that held a price rise to half the industry’s, and the reading that a loss on the interest of land purchases would be recovered by the core business, both rested on Tanabe Ken’s feel for the market. Aggressive management temporarily worsened the equity ratio and the interest burden, and sat next to real risk. Even so, the stance that demand is created rather than awaited delivered fifteen straight years of rising sales and profit in the teeth of the oil shock, and a level of profit that closed on the major general contractors. There are moves available before you conclude that low growth means you cannot grow — Sekisui House in this period puts that question to industries far beyond its own.