Tanabe Ken’s switch to direct sales, responsible construction and the upmarket house (1963)

Choosing to be picked on quality, not on price

The core of this decision is that it refused to blame the product or the market for poor sales, and changed both the way of selling and the positioning of the product at the same time. Replacing dealer-led distribution with direct selling and responsible construction by the company’s own employees was a choice to take back, at a known cost, both the point of contact with the customer and the responsibility for quality. Tanabe Ken deliberately took the road that rivals had avoided as unsuited to volume production and volume selling.

The other choice was to go upmarket. At a time when “prefab means cheap” had settled into common opinion, putting the deluxe type at the centre of the range was a declaration that the company meant to keep its distance from price competition and be chosen for quality instead. Tanabe Ken turned a three-year-old company carrying an accumulated deficit into a profitable one within a year, and led it through fifteen consecutive years of rising sales and profit to a stock-market listing; he would later be called the man who remade Sekisui House. Wind up a business that will not sell, or rebuild the way it is sold — this decision is worth revisiting as the judgement of a manager who chose the latter.