APU Case study
Kaihara Co., Ltd.1
-From a family business to the world leading company in Denim manufacturing-
Kaihara Corporation started as indigo Kasuri weaving manufacturing in 1877 and the establishment of the corporation was completed in the year 1893. The head office of the corporation is located in Fukuyama City of Hiroshima Prefecture. The corporation is a long-established business with years of experiences, now employing around 450 people in the company and 650 people in total in the company’ group.
Kaihara holds a total of approximately 80% share in blue jeans domestically and 70% of total export of Denim2 from Japan. The net sale of year 2012 is of 124 hundred million Yen. In terms of sales, the ratio of export is crossing over 30% of the total amount of production. The company also got the world’ recognition for being the top class manufacturer in Denim s
The target market of Kaihara, is a premium fashion for jeans and casual fashion, the customers of Kaihara are Levis, Edwin, GAP, UNIQLO (Fast Retailing Co.), seven jeans, Hugo Boss, and Pierre Cardin, etc.
One characteristic in Kaihara business is, instead moving the production process abroad like other textile businesses, the choice of having built its 4 production plants domestically in Hiroshima Prefecture, with consistent jeans material supply for production (spinning, dying, weaving, finishing), as well as consistent sales and marketing. Kaihara was awarded the 7th “
Porter Prize”in 2007. Porter Prize is managed by Michael
Porter, Professor, Harvard University and Hitotsubashi University, and it is awarded to the excellent management.
Prepared in 2005, revised in 2006 and 2013
Denim: serge Denim means a fabric that resembled in Nimes area, France
(Miwa integrated jeans factory of Kaihara built in 2008, state-of-the-art worldwide)
This case study will focus on the global vision of management of Kaihara, while the company holds manufacturing base only domestically in Japan, particularly in Hiroshima area. This case describes strategic viewpoints necessary for Japanese companies hereafter focusing on Management of Technology and Marketing aspects. This case refers to how a family business has been grown to the world competitive company in Denim area through developing the core technology, creating domestic and global market with managing innovation, marketing strategy and corporate positioning strategy.
Manufacturing Process of jeans
In this case study, manufacturing process of jeans is simply shown in the four processes below.
(Raw material: cotton)
(Spinning process in Kaihara)
(Rope dyeing process in other company)
(Weaving process in Kaihara)
(Dyeing process in Kaihara)
（Finished product of Kaihara）
History of Kasuri industry and the brief history of Kaihara
Indigo Kasuri weaving industry is the traditional industry in Bingo (old name of Hiroshima Prefecture) which was high popularity in Japanese society until 1960s. The technique of Kasuri is to bundle the threads and dye the parts which want to be colored with indigo. As the result a thread has the colored part and the remaining white part. This thread is used as weft and also warp. They produce design patterns on the cloth through the weave gradation method what is called Kasure (blurred). Later on, the word transformed into Kasuri.
(Spinning for Kasuri: Replication of spinning used during the Edo Period in Bingo district)
(Weaving of Kasuri: same type used during Edo Era)
The Kasuri industry was originated during the Edo Period (The Centralized Feudalism [Tokugawa shogunate: 1603~1867]). Ashidagawa River, in Yoshida District (today, part of
Fukuyama City, Hiroshima Prefecture), was appointed by the Tokugawa male cousin to be the center of indigo plantation....
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