VMS3.info FEATURE ARTICLE
Subject: February 2003 VMS3.info:
Sazaby Analyzed via the Value Framework
Analyzed via the Value Framework
Sazaby can be the total brand, offering all types of joys: clothing, dining, housing, and time-refreshment with classes for hobbies
Sazaby is a domestically focused Japanese corporation known for creating original brands in dining, clothing, and household goods for the last 30 years. Sazaby promotes its expansion through domestic and foreign alliances that share its philosophy and provide a brand image. Through these partnerships, Sazaby continually offers a new mixture of fashions and lifestyles to its customers.
core sectors today are:
With the long economic slump in Japan, personal consumption continues to decrease with the apparel industry being particularly hard hit. While rival brands are trying to set consumer trends, they appear to be forgetting to establish their own brand concepts. Sazaby, on the other hand, is creating its own brand concept that can be loved by customers over the long haul. After the Japanese "bubble economy" ended in the early 90's, many apparel businesses suffered significantly, but Sazaby did not suffer as much due to its consistent brand image and trusted products.
Sazaby's products are not essential for living. They are luxury goods and services; however, people cannot stop spending for luxury items even in a bad economy. People need to feel a joy for living. Sazaby can thus be the total brand, offering all types of joy: clothing, dining, household goods, and time-refreshment with classes for hobbies. Sazaby's current strategy is to create a general store that contains the entire essence of Sazaby group's brand values.
In its business strategy, Sazaby focuses on specific targeted customers
(20~35 aged females) and satisfies all their needs for the
three basic concepts of dining, clothing, and housing
After Sazaby established its three basic concepts of clothing, dining, and household goods, it started expanding with foreign alliances that would generate more sales and opportunities for its groups. In 1995, it established "Starbucks Coffee Japan, Ltd.," through a joint venture with Starbucks Coffee International Inc. of the U.S.A. By November 2002, Sazaby had six consolidated subsidiaries and two consolidated affiliates. Through its 30 years of history, Sazaby has promoted three fundamental business strategies:
In its business strategy, Sazaby
focuses on specific targeted customers (single women, aged 20~35 years) and satisfies
all their needs for the three basic concepts of dining, clothing, and housing.
For instance, when a target customer shops for clothing, she will be able to find
a matching bag along with the stationery and a purse to carry in that same bag.
Having thus satisfied her need for clothing, she can then extend it to satisfying
her need for household goods, potentially finding furniture and linens to furnish
her home. Finally, she can chose to enjoy a great meal at any one of the restaurants
that Sazaby offers.
Points for Strategy Deployed:
As a retailer, customer satisfaction is a key concept of its business
and its enhancement is a primary concern of management
As a retailer, customer satisfaction is a key concept of its business and its enhancement is a primary concern of management. For maintaining high-level customer satisfaction, Sazaby manages three areas:
Based on performance metrics, Sazaby is comfortable with closing stores that do not generate sufficient profits for the group.
Management recognizes cash flow management as the key strategic measurement that will assure the following benefits: effective allocation of cash to each business, a return on capital, an overall efficiency in the group's mid-term investments. The key strength of its strategic management is: positive results from each of the business segments, namely, "bags and leather goods," "apparel and accessories," "lifestyle-enhancing products and furniture," and "food operations." Customers from each segment are converted to other segments. For instance, the customers from the apparel and accessories segment could be the customers for the food operation. This conversion of customers could happen because Sazaby has set a common brand philosophy to organize all of its business segments.
Key Points for Strategy Managed:
In answering the first challenge, Sazaby has already created several new brands. The first of these will be in the food and beverage business. "Afternoon Tea Baker & Dinner" is the new brand, which is in collaboration with famous English chef, Jamie Oliver. Another is a tearoom called, "Sadeu," offering Japanese style tea to customers. Through these new brands, Sazaby offers several different food brands that satisfy all kinds of needs for its customers. It includes: British style tearooms, American style café (Starbucks,) Japanese style tearooms, large restaurants that are capable of offering bridal services, and a British style diner and bakery.
In answering the second challenge, Sazaby has created a general store called "Afternoon Tea the General Store in Ginza," which comprises the entire 10 floors of a building. In each floor, Sazaby offers its own brands. Through this store, Sazaby offers tearooms, wardrobes, living products, and furniture from the "Afternoon tea" brand. It also offers two new brands: "Taacoba," which consists of a nail saloon and a nail academy, and "Jane Packer," which consists of a flower shop and a flower arrangement school. Through this project, Sazaby is expecting current loyal customers from "Afternoon Tea" brand to be the new customers for its two new brands and new concept-academy.
For answering the third and fourth challenges, Sazaby needs a success from it's second challenge; opening a general store. If its general store succeeds, Sazaby could reduce the number of smaller stores and expand to fewer numbers of larger stores.
For answering the last challenge, Sazaby continues to track each brand through the open network.
About the Authors:
Mitchell Levy, is President and CEO of ECnow.com (http://ecnow.com), an e-commerce management consulting company helping corporations transition from the industrial age to the Internet age through strategy, marketing, and off-the-shelf and customized on-line and on-ground training. He is the author of the book E-Volve-or-Die.com (http://e-volve-or-die.com), creator of the Value Framework and author of the Value Framework Workbook (http://ecnow.com/value/).
Riko Ono is a student the San Jose State University.
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