From single-product leader to full-line housing-equipment maker (1981)

The fate a single-product leader carries: demand it cannot set

The heart of this shift was the question of where a company that has already taken almost all of a single product market puts its next growth. Holding two-thirds of Japan in sanitary ware and tap fittings, Toto Kiki could not grow faster than the market itself. The road it chose was to widen along the water — into bathrooms, washbasins and hot water — and take a larger share of the plumbing of each house. Releasing the investment restraint it had held since the oil shock and switching to the offensive can be read as anticipating the ceiling before reaching it.

What the widening did not change was the structure that binds housing equipment tightly to new housing starts. In 1980, the year TOTO turned aggressive, starts were already heading below the previous year. So long as sales ride on external demand, diversification can dampen the swings but cannot generate the demand itself. That TOTO went on from here to cultivate renovation demand and to create categories of its own, such as the Washlet, was a long answer to the fate a single-product leader carries.