Otsuka Kagu: Competitive Strategy in the Japanese Furniture Market

Otsuka Kagu was a luxury furniture store in Japan that began operations in 1969. It operated 16 retail stores throughout Japan. The business was growing until the financial crisis of 2008. After that, the company faced the challenge of sustaining a long-term competitive advantage in a highly contested competitive environment and a declining economy. In 2009, Kumiko Otsuka, the founder's daughter, succeeded the company. She repositioned the company from a luxury full-service retailer to a self-service middle-priced retailer. Her father was furious about the change and started a new full-service furniture retailing business. Eventually, Yamada Holdings, a big-box electronics retailer, acquired Otsuka Kagu in 2019.  The theories of market penetration, market development, product development, and diversification are applied in this case, as is SWOT analysis.