Aiming to advance growth strategies aligned with the positioning of each business and to achieve further strong growth in Japan and overseas.Masaru Kawaguchi President and Representative Director, BANDAI CO., LTD.
In the current Mid-term Plan, the new mid-term vision of the Toys and Hobby Unit is Break Out of the Box. Wow the World! In accordance with this vision, the Toys and Hobby Unit has announced five main strategies, and in the first quarter of FY2019.3, the unit achieved favorable results, with year-on-year gains. In this section, Masaru Kawaguchi, the president of BANDAI CO., LTD., the core company in the Toys and Hobby Unit, discusses specific initiatives for the strategies in the Mid-term Plan, his expectations for specific focus IP, and his message for employees.
The current Mid-term Plan has gotten off to a good start.
Kawaguchi: In the first quarter, the Toys and Hobby Unit recorded sales of ¥50.5 billion, up 18% year on year, and operating income of ¥5.2 billion, an increase of 293%. We have gotten off to a good start. Our results were centered on products for the mature fan base, such as Gundam plastic models and collectable figures, and core IP products, such as DRAGON BALL, KAMEN RIDER, and PRETTY CURE!
What is the Unit’s mid-term vision?
Kawaguchi: Our vision is Break Out of the Box. Wow the World! To achieve stable earnings in an industry in which results are significantly affected by the presence or absence of hit products, the Toys and Hobby Unit has worked to enhance its IP lineup and establish organizational systems. However, to step up to the next stage with a view to markets around the world, we cannot limit ourselves to current methods of doing things. We must move beyond existing concepts and strive to create new forms of fun. Our new vision was created to strongly advance those ideas in the current Mid-term Plan.
A reorganization was implemented in April.
Kawaguchi: Up to this point, BANDAI has implemented initiatives for a wide range of target customers and business fields. However, looking at products for pre-school children and elementary school students, and then products for the mature fan base, there are substantial differences in such areas as production methods, marketing measures, and ways of advancing into overseas markets. As a result, it became difficult to operate these different businesses under the same organization. Accordingly, we split off the departments that handle products for the mature fan base and consolidated them into BANDAI SPIRITS CO., LTD. In this way, we will aim to implement business development in a more-strategic and rapid manner. The new system has just gotten started, but I believe that the mission for each business has been clarified and that we have started to establish an environment that makes it easy to take on challenges.
Five main strategies were announced.
Kawaguchi: The first is to create, nurture, and obtain new IPs. The Toys and Hobby Unit is working to nurture and expand core IP and to acquire the commercialization rights for new IP. Going forward, the Unit will also strive to create new IP. In August, we launched the Content Project, which is a Unit-wide initiative. The core members of the project are employees who are well versed in each business, and they are working to foster the creation of new IP.
The second strategy is to bolster positioning and business growth. This incorporates measures to achieve growth through an overwhelming No. 1 position for each business in Japan, with a worldwide perspective. I would like all of our companies and departments to clarify their originality and target market position and work to achieve steady gains in line with their various distinctive characteristics and growth stages.
Is the Unit making progress in regard to the third strategy, which is breaking into the Chinese market?
Kawaguchi: The full-blown entry into the Chinese market was announced as a pillar of the Group’s Mid-term Plan, and accordingly the Toys and Hobby Unit set up an office in April to take charge of related preparations. On that basis, we are moving forward with preparatory initiatives, including the establishment of a local company. In response to popularity of Gundam plastic models in mainland China, we opened THE GUNDAM BASE SHANGHAI in August in Shanghai. This is our first flagship facility for Gundam plastic models in mainland China. In addition, localized Ultraman toys are also recording favorable sales. Moving forward, we might incorporate the idea of “local production, local consumption,” under which we would consider the possible implementation of sales of China-originated IP and products in the local market. In these ways, we will aim for further growth.
In Europe and the Americas, DRAGON BALL trading cards and collectable figures are enjoying favorable demand. Going forward, we will further expand products for the mature fan base. In addition, we will roll out products in conjunction with the TV broadcasts of Disney IP Big Hero 6, and roll out in-house IP, such as Tamagotchi and Hyper Yo-Yo. In these ways, we will work to increase the profitability of our operations in Europe and the Americas.
「THE GUNDAM BASE SHANGHAI」
We will work to maintain a corporate culture that enables employees to think and take action without fearing failure.
Would you discuss the remaining two strategies?
Kawaguchi: In expanding new business domains, the Toys and Hobby Unit will take a broad view of its business fields and work to create new products and new businesses. Until now, our business development initiatives have focused on the fields of toys and hobby products. However, moving forward we will also aggressively take on new challenges, such as utilizing digital technologies and addressing demand for experiences rather than things. In addition, we will also step up collaboration with other Units and external partners, and we will strive to create and nurture our next business pillar.
In strengthening functions to maximize business, we will implement organizational restructuring and personnel development and will formulate measures to address e-commerce, which is expected to record further growth in the future. In particular, in overseas markets business growth is not possible without e-commerce. Under the current Mid-term Plan, we will focus on the establishment of a foundation for the further expansion of global e-commerce.
What IP and products will the Unit focus on during the current fiscal year?
Kawaguchi: KAMEN RIDER ZI-O, for which broadcasts started in September, marks a turning point as the 20th series of Heisei KAMEN RIDER. The ability of the character to draw on the powers of generations of KAMEN RIDERS has been well received in the market. BANDAI will launch a number of new products, so there will be exciting developments as we move forward.
Also, the new Himitsu no Cocotama series — Kira Kira Happy Hirake! Cocotama — will start from September, and Bakutsuri Bar Hunter TV animation , for which product roll-outs are already being implemented, will start from the fall. The Toys and Hobby Unit’s business development initiatives are centered on products for pre-school children and elementary school students, and the Unit plays a major role within the Group in regard to the creation and development of future BANDAI NAMCO fans. Moving forward, we will strive to roll-out products and services that touch the hearts of children and to create future opportunities for other Units as well.
Kira Kira Happy Hirake! Cocotama
Bakutsuri Bar Hunter
Are there other focus products?
Kawaguchi: We have started to take orders for Gundam Concierge Haro, a communication robot. To establish the theme that guided the development of this product, we asked a question. What if Haro, the mascot robot that appeared in the Mobile Suit Gundam series, actually existed now? On that basis, we took on the new challenge of incorporating AI into IP products.
In addition, the Dango Mushi capsule toy was launched in August. This product has a high profile, and at the same time, as a capsule toy, it is environmentally friendly. As a result, Dango Mushi received considerable attention at the International Tokyo Toy Show. Moving forward, we will strive to rapidly take on the challenge of creating these types of products and services that incorporate new viewpoints.
What are your expectations of employees?
Kawaguchi: We all work at an entertainment company, and accordingly I would like to see everyone do things that they really want to do, and to take on challenges that they consider to be interesting, without fearing failure. The BANDAI NAMCO Group has a corporate culture that values independence and treats failure as a learning opportunity. If you have an idea and take on the challenge of implementing it, even if you fail you will be able to leverage that experience in your next challenge. If you can do that, then your career will not suffer. I myself have failed many times in my career. We need to strive to maintain our free and open-minded corporate culture and to achieve further business growth and expansion through the growth of individual employees.
This article is an extract from the Newsletter, BANDAI NAMCO News, which was published in September 2018 and partially re-edited.