JIN-353 -- Adversity Makes the Company

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T H E J @ P A N I N C N E W S L E T T E R
Commentary on the Week's Business, Technology and Cultural News
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Issue No. 353
Wednesday January 25, 2006 TOKYO

+++ VIEWPOINT: Adversity Makes the Company

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+++ VIEWPOINT: Adversity Makes the Company

Stock prices, which had plummeted after the "Livedoor shock,"
the revelation the company was under suspicion for securities
law violations, rebounded on January 19th. Sometimes the
market moves according to no particular logic but rather by force
of circumstance, investors buying because of a rise in price or
selling because of a drop in price. My crystal ball is clouded,
but I would venture to say that at the moment the Japanese
economy is fundamentally sound.

Even if the market fluctuates, the economy has shown strength of
resilience. Take, for example, Yoshinoya D & C Co., Ltd. Because
of BSE, or mad cow disease, two years ago the Japanese government
banned US beef imports, forcing Yoshinoya to remove its popular
beef-on-rice dish from the menu -- a worst-case scenario
come true.

However, Shuji Abe, president of Yoshinoya, remained
surprisingly unperturbed. "We gained valuable experience
during these two years," the Nikkei Shimbun, a financial daily,
reported Abe saying. Indeed, because the company embarked on
an expansion of its menu as it fought desperately to preserve
its customer base, the Yoshinoya group of companies
"collectively grew much stronger," according to Abe. "This
[experience] is a superb intangible asset." He had brought
the group back from the brink through surprisingly positive
thinking.

Yoshinoya is but one example. After the bubble burst, many
Japanese companies fell on hard times. Fujio Mitarai,
President and CEO of Canon, who has been informally tapped
as the next chairman of Nippon Keidanren (Japan Business
Federation), a weighty economic organization comprising
corporations and industrial associations, struggled to
dispose of underperforming businesses 10 years ago. It
is said adversity makes the man. It also makes the company.
Companies with the power to dig themselves out of a hole
are different from companies built of sand. Which is one
reason Livedoor Co. President Takafumi Horie now sits
behind bars.

--Burritt Sabin

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EDITOR
Written and edited by Burritt Sabin (editors2@japaninc.com)

(C) Copyright 2005 Japan Inc Communications KK. All Rights Reserved.