Domestic Competition in Japan
In October 1987, Tadao Suzuki, President of Sanraku Inc., and the ‘RS Team’ (‘Restructure Sanraku’) were reviewing a 7-month in-depth investigation of Sanraku’s situation. Established in 1934, and listed on the First Section of the Tokyo Stock Exchange since 1949, Sanraku was a leading Japanese manufacturer and distributor of alcoholic beverages. In 1987, Sanraku had boasted the largest market shares in wine and ‘shin-seishu’ (a kind of ‘sake’), and had held fourth place in whisky sales. Since 1984, Sanraku had also begun selling and distributing the de-luxe imported brandy, Rémy Martin. Despite this record of achievements, Sanraku had been facing a steady decline in profits and sales since 1984 (refer to Exhibits 1 to 3). At the end of fiscal year 1986 (April 1986–March 1987), net sales of Sanraku had declined from ¥70.4 billion in 1985 to ¥62.4 billion (US$445.9 million), and net income had dropped from ¥1.4 billion to ¥947 million (US$6.8 million) during the same period of time (in 1987, US$1 = ¥139). In April 1987, Sanraku’s shareholders had appointed Tadao Suzuki as CEO of the company with the challenging task of turning the company around.
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