Confining the business to “lifting equipment,” and declining to diversify (2008)

The side that draws the line is bound by it

There is a certain scrupulousness in the sentence “we might have had the option of operating businesses outside LE” — a company recording, in its own hand, the road it did not take. A firm that had just been through three annual losses and 119 retirements chose not the conventional remedy of widening the range to absorb the swings, but staying narrow and aiming to be first in the world. The substance of that choice was to forbid itself, in advance, the manoeuvre of shifting funds into another business when results turn down. Missing products would have to be built or bought — the 2008 definition determined the shape of every subsequent investment.

The price is not concealed. Sales of ¥89.8bn and a net loss of ¥6.7bn in the year to March 2011, operating profit down to ¥18.4bn in the year to March 2017, a net loss of ¥13.0bn in the year to March 2021: each time demand moved one way, the numbers sank. And the line itself keeps moving. The materials-handling business absorbed in 2025 includes fixed cranes that do not move at all. In buying products to stay faithful to the definition, the company ends up rewriting the definition. The strength and the fragility of a firm that draws its own perimeter in its own words lie in the same place.