18th in a series of occasional articles on venture businesses
One key to running a successful business is to turn your product into a tool consumers can use to take advantage of ongoing deregulation, says Hideo Ohkubo, president of Forval Corp.
Three years ago, Forval Corp. entered the telecommunications industry as a resale business leasing telephone circuits from carriers at bulk discount rates to offer consumers cut-rate phone services.
Ohkubo’s current strategy for succeeding in this quickly expanding industry is one-stop shopping, a concept he hopes will help consumers receive the best service at reasonable rates without the trouble of picking through the morass of confusing services and rates mushrooming with the ongoing telecommunications deregulation.
“One-stop shopping is the concept of a supermarket,” Ohkubo, 42, said, referring to the notion of shopping for every need at one store. “Although more and more companies will emerge in the telecommunications industry, the important thing is how they benefit consumers,” Ohkubo said.
Forval Corp. customers can automatically get a combination of discount international calls, domestic long-distance and regular calls, cellular phone calls and data transmission services.
In the current telecommunications industry, users basically need to enter into contracts with different carriers for different services. Ohkubo predicted the resale business will grow in the future because it also benefits carriers by reducing the cost of sending bills to individual customers every month. “We are not competing against carriers, and they can save costs by working with us,” he said. “We select carriers from the consumers’ viewpoint. If carriers launch a number of good services, we always select the best one and provide it for consumers.”
Forval sales increased from 13 billion yen in fiscal 1993 to 22.5 billion yen in fiscal 1997 on an unconsolidated basis, up 57.8 percent over a five-year period. Forval entered the telecom business in 1996 through an affiliated firm.
In 1980, Ohkubo founded the predecessor of Forval Corp., a telephone equipment and office computer sales and maintenance company, with capital of 1 million yen. When he decided to enter the telephone sales business, Ohkubo planned to capture a 50 percent share of the market in five years, a market then dominated by the nationalized Nippon Telegraph and Telephone Public Corp.
Anger toward the state-owned company motivated Ohkubo to make the decision, as he witnessed NTT, which rented telephones to users, continually raising its rental fees. Although about 890 companies dealt in telephones at that time, most were subcontractors of the public company, Ohkubo said. “I didn’t want to lose (a battle against a public firm). I approached customers with the ‘simple is best’ approach,” he said. “We have to make things simple when we talk to customers (as salesmen).”
Together with Masayoshi Son, founder of Softbank Corp. and a well-known entrepreneur, Ohkubo developed an adapter — designed to be attached to a regular phone and to automatically select the most inexpensive carriers — at a cost of 3.3 billion yen.
Even after new carriers that offer much lower rates than those of NTT are born, consumers cannot easily switch to them because they have to compare prices.
The adapter logged sales of 1 trillion yen over a five-year period and helped new carriers attract customers. “I’m not good at making money. I’m interested in changing society. The fact that I changed society can remain for 100 years. Making money cannot do that,” Ohkubo said.
Entrepreneurial women honored
Two Japanese were among those awarded by The Star Group, a U.S.-based consulting firm, which honored 53 women from 26 countries for their role as leading entrepreneurs, it was learned Wednesday.
The two are Yuri Konno, president of Dial Service Co., and Aiko Okawara, president of JC Foods Co. The ceremony honoring “The Leading Women Entrepreneurs of the World” was held in London from April 29 to May 1. Konno also received an award presented by IBM Corp., a cosponsor of the event, for her company’s work with computers in such fields as health care.
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