Table Speech


The Flower Business and Phalaenopsis Orchid

March 9, 2016

Mr. Naosuke Goto
President, U. Goto Florist


I will talk about the flower and ornamental plant retail business and cut flowers we offer. In Japan, florist shops started to sell cut flowers, including foreign flowers like roses and orchids, from the mid-Meiji period. Today, there are about 39,000 shops across Japan, of which 20,000 are flower-only outlets. The rest includes supermarkets where flowers are sold with other items. The economic recession of the Heisei era has brought a sharp increase in on-line stores and floral design specialists that do not have storefront shops and thus are free from the risk of overstocking.



Florists had ranked the fourth in the “Top 10 Dream Occupations of Japanese Girls” survey from 1998 to 2002. Unfortunately, it ranked the ninth last year. It seems children these days are not familiar with florist shops in towns, as more and more people order flowers online via PCs and smartphones. I believe an old-fashioned florist is an attractive job that heals our mind and I hope many young girls are encouraged to pursue this career.



I had travelled around the world for an apprenticeship over three years before I took over the family business. Having worked at florist shops in different cities, I learnt that “the world’s top-class shops exist in the metropolises with four clear-cut seasons and with high cultural levels (having the top-class symphony orchestras, museums, theaters, hotels and restaurants).” Florist shops also reflect the distinctive nature of each locality as well as technical strengths or weaknesses. I advise you to observe florist shops in different towns and make interesting observations when you travel abroad.



For example, Germany and the Netherlands strive to develop unconventional avant-garde designs and techniques, while France excels at color coordination and attractive shop displays. The U.K. has superior gardening techniques and major cities in the U.S.A. lead the world in the largest scale unconventional party decorations and spatial presentations.



Before I close my speech, let me talk about one of the most well-known flowers, Phalaenopsis orchid. A potted Phalaenopsis orchid is the most popular celebratory gift, especially for corporate customers. You must have achieved social success to become a Rotarian and I am sure you have received many Phalaenopsis orchids as gifts every time you were decorated or promoted. Now what makes Phalaenopsis orchids so special? I believe there are three reasons: orchids are luxurious and elegant and Phalaenopsis orchids are the largest and most gorgeous; Phalaenopsis orchids last the longest among all potted flowers; and people tend to think the safest way is to follow others and send the most popular gift.



Contrary to these merits, I must warn you about the disadvantage of sending potted Phalaenopsis orchids. As this flower is widely recognized as the best gift, many people are aware of its price. If you want to make a special gift, let me advise you to order a king-sized Phalaenopsis orchids or choose more unique flowers. You can also consult a florist who will be happy to help you.





The Role of General Trading Companies and Their Business Transition

March 9, 2016

Mr. Mamoru Sekiyama
Advisor
Marubeni Corporation


1. The role of general trading companies
General trading companies conduct various business activities that can be classified in three major categories. Firstly, they strive to secure stable supply of resources and energy to meet demand which is forecasted to expand in the mid-to-long term, as well as to ensure sustainable growth of the world economy. Secondly, they engage in infrastructure development, based on extensive experiences acquired over many years, to seize enormous business opportunities especially in the emerging countries. And lastly, they adapt to changes in consumption and lifestyles. Companies implement new business activities that respond to the needs of growing middle class and the ecologically minded.



2. History of Trading Companies
The business model of trading companies has undergone various transformations. As Japan revived its industries based on processing trade after the War, trading companies functioned as transaction mediators to promote trade and expand business.
They launched on a project-based business model from the 1970s. They started to assist Japanese companies expand their business internationally from the 1980s, by utilizing the know-how they had accumulated overseas and providing advanced and multiple functions. Since the 1990s, companies have further expanded their business scope to power generation, renewable energy, water and grains to meet diversified needs.



3. Trade and investment enhance the business The business structure of trading companies changed
dramatically as we entered the 21st century. As manufacturers came to accumulate their own know-how, trading companies had no choice but to transform their business model from distributing goods horizontally to making investments in each production phase, ranging from upstream raw material manufacturers to downstream retailers, as well as building a value chain to provide high-quality services. Trading performance and experiences, personal connections and know-how are advantages of trading companies that ensure successful business investments.



4. Characteristics of recent trading company businesses
Business practices have also transformed in recent years. Firstly, investments have become large-scale, with growing importance of risk management and portfolio management. Trading companies must diversify their scope of business operation to secure a balanced source of income, especially between the resource and non-resource sectors.
Secondly, there is a growing importance to take a conciliatory stance towards acquired companies in M&A, to overcome differences in management policies and corporate cultures. Extensive human resources and know-how must be allocated in the initial stage for sound management.
Lastly, trading companies must seek the best business partner around the world, not limited to Japanese companies, to strengthen their competitive edge.



5. Business Cases
The electric power business best describes the operation of trading companies.
Power stations are designed, procured and constructed by EPC (engineering, procurement and construction) business, which has transformed over time. Since the 1960s, trading companies delivered power generation, transmission and transformation installations overseas. As the Plaza Agreement in 1985 led to stronger yen and Japanese products became less competitive, trading companies formed consortiums with overseas manufacturers and participated in international biddings. With the easing of regulations in the 1990s, trading companies launched on overseas IPP (Independent Power Producer) projects. As we entered the 21st century, business operations became diversified.
Corporate structure has also undergone dynamic changes to meet diversified needs of business operations. We can expect further expansion in the electric power value chain.



6. Conclusion
Human resource is the greatest asset for trading companies. Our sustainable business development depends on human resource cultivation and utilization. Each company is making significant investment in human resource training programs to secure diversity in the workplace.