For this internationally renowned interactive contents agency, we have developed and implemented managerial strategies, overseas business development strategies, personnel strategies, and M&A activities. This is an ideal case study to understand OIC's comprehensive business capabilities.
Keys for the rapid growth: Standardised processing and Branding
TYO-Interactive design (TYO-ID) has been rapidly growing after spinning out from TYO, one of the top 3 media production groups in Japan. OIC has supported TYO-ID's success, and is directly involved in its management. This unique management commitment is only possible because OIC takes full responsibility for the management results.
-- There are many cases where you consult for a company's executive board, but it is rather unusual to actually become a member of the client company's executive board yourself. How did this happen?
Matsutani (OIC Founder) : "It all began when TYO group's President/CEO, Mr. Yoshida consulted me in 2002 about his plan to spin out TYO's media design department as a web design company called TYO-ID. He wanted us to take on its management, especially the business administration and business development."
-- What were your objectives?
Matsutani: "The media design department had been in red since it was established. Therefore, our most urgent objective was to become profitable. Our other tasks included developing robust strategies to grow in the interactive contents filed, which was expected to prosper, and develop a successful business model."
"The first problem to solve was profitability; up to that time, each production stage was unlinked to other stages and it was difficult to tell which stage was increasing the costs and making the project in the red. The whole production procedure was so random that they only found out that the project was in the red after the actual production was completed."
"So at first, we concentrated on establishing a standard production procedure and creating a clear division of labour within the company. By identifying exactly how much cost is incurred for direction, design, technology, production, and administration, each producer is now able to manage the cost for an entire project."
"For example, when you ask the internal design team to design some contents, the design team will bill you according to their hours worked. By making each department manage its budget, they become more conscious of their costs and expenses. This has significantly improved their profitability"
"As a result, the company turned a single-year profit in the first year after spinning out. Since then, it has been rapidly growing, increasing profit steadily. Also, in line with our initial expectations, because the worked hours are directly linked to cost the unnecessarily long working hours have been significantly reduced."
-- What solution did you suggest as a development strategy?
Matsutani: "When we thought about the advantages and core competences of TYO-ID, we came to the conclusion that they were its creative and high-quality producers and management. Then, we decided to focus the company on its creative concept and project management expertise. In other words, we decided to outsource the small and detailed designing procedures and programming works. This solution has allowed the company to take on and process many projects simultaneously."
"Whilst other production companies are becoming larger, TYO-ID rigidly remains a compact company of 30. Thanks to this lean management group, the company is able to maintain its products’ high-quality whilst steadily increasing it sales and profits. This is one of the results from specialising in management."
"TYO-ID's branding strategy has been successful as well. TYO-ID has established itself in the Japanese market by winning a number of international advertisement awards including the Cannes’ CyberLion. The company has earned a strong reputation by cooperating with competent overseas production companies to offer unique and high-quality products, which can only be achieved with a combination of diverse talents, national and international. These factors improve TYO-ID’s brand value and the result is seen in better production unit prices."
-- Can we expect the same result with other companies?
Matsutani: "The principle of any business is always the same: establish strict cost management by creating a production procedure with clear cost forecasts; determine the company's strongest advantage and utilise it to increase the business value; be the first one to go global to improve the brand value. I believe that these are all essential solutions for today's company management."
Of course, these presumptions can vary according to the industry or market changes. OIC is able to offer flexible and innovative solutions based on its extensive experience to each client, increasing the client's business value."
TYO Interactive Design Inc.
-- There are many cases where you consult for a company's executive board, but it is rather unusual to actually become a member of the client company's executive board yourself. How did this happen?
Matsutani (OIC Founder) : "It all began when TYO group's President/CEO, Mr. Yoshida consulted me in 2002 about his plan to spin out TYO's media design department as a web design company called TYO-ID. He wanted us to take on its management, especially the business administration and business development."
-- What were your objectives?
Matsutani: "The media design department had been in red since it was established. Therefore, our most urgent objective was to become profitable. Our other tasks included developing robust strategies to grow in the interactive contents filed, which was expected to prosper, and develop a successful business model."
"The first problem to solve was profitability; up to that time, each production stage was unlinked to other stages and it was difficult to tell which stage was increasing the costs and making the project in the red. The whole production procedure was so random that they only found out that the project was in the red after the actual production was completed."
"So at first, we concentrated on establishing a standard production procedure and creating a clear division of labour within the company. By identifying exactly how much cost is incurred for direction, design, technology, production, and administration, each producer is now able to manage the cost for an entire project."
"For example, when you ask the internal design team to design some contents, the design team will bill you according to their hours worked. By making each department manage its budget, they become more conscious of their costs and expenses. This has significantly improved their profitability"
"As a result, the company turned a single-year profit in the first year after spinning out. Since then, it has been rapidly growing, increasing profit steadily. Also, in line with our initial expectations, because the worked hours are directly linked to cost the unnecessarily long working hours have been significantly reduced."
-- What solution did you suggest as a development strategy?
Matsutani: "When we thought about the advantages and core competences of TYO-ID, we came to the conclusion that they were its creative and high-quality producers and management. Then, we decided to focus the company on its creative concept and project management expertise. In other words, we decided to outsource the small and detailed designing procedures and programming works. This solution has allowed the company to take on and process many projects simultaneously."
"Whilst other production companies are becoming larger, TYO-ID rigidly remains a compact company of 30. Thanks to this lean management group, the company is able to maintain its products’ high-quality whilst steadily increasing it sales and profits. This is one of the results from specialising in management."
"TYO-ID's branding strategy has been successful as well. TYO-ID has established itself in the Japanese market by winning a number of international advertisement awards including the Cannes’ CyberLion. The company has earned a strong reputation by cooperating with competent overseas production companies to offer unique and high-quality products, which can only be achieved with a combination of diverse talents, national and international. These factors improve TYO-ID’s brand value and the result is seen in better production unit prices."
-- Can we expect the same result with other companies?
Matsutani: "The principle of any business is always the same: establish strict cost management by creating a production procedure with clear cost forecasts; determine the company's strongest advantage and utilise it to increase the business value; be the first one to go global to improve the brand value. I believe that these are all essential solutions for today's company management."
Of course, these presumptions can vary according to the industry or market changes. OIC is able to offer flexible and innovative solutions based on its extensive experience to each client, increasing the client's business value."
TYO Interactive Design Inc.
