Deodeo and Eiden combine to create Edion (2002)

What choosing a federation meant

To read this combination only as two provincial mid-sized chains huddling together for survival against the two national leaders leaves something out. Both chief executives spoke of the fear that without a certain scale they would not survive — but they also set a target of a tenth of a ¥9tn market, and deliberately placed the holding company in Tokyo rather than in either home city so that other chains could join. It was defence and, at the same time, an opening move to seize the initiative in the industry's consolidation before anyone else. Reading a shake-out as inevitable, they tried to stand among those doing the consolidating rather than among the consolidated: that is the core of the decision.

Most of that ambition, though, did not go as drawn. The merger with Gigas broke within two months, joint ordering through Voice Network never escaped own-brand goods, and the plan to widen the alliance nationally shrank into the reality of finishing the integration of three companies. What is not in doubt is that the ground taken first — two non-overlapping territories held as a solid block across western Japan — became the platform from which the addition of Midori Denka carried Edion to number two nationally. A design for expansion may fail while the foundation laid first still supports the scale that comes later; the Deodeo–Eiden combination can be read as one example of that.