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Vibrant SMEs of JAPAN

Shoe Manufacturer Going Global with Unique Business Model [Miyagi Kogyo]

Secret to Robustness
  • Business model that doesn't pursue volume.
  • Easy shoe ordering system.
  • Creative and high quality manufacturing.

"Shoes are a product that people will always need in their daily lives. We will do business without chasing volume." President Kazunori Takahashi of Miyagi Kogyo--a custom-made shoe manufacturer based in Nanyo City, Yamagata Prefecture--has discovered a path of survival with a high mix low volume business model. He gazes intently at the world from Yamagata. By creating a unique custom-made system, the company is increasing its presence while offering greater added value. The company is also exploring new techniques in shoe manufacturing, and for the future it also has its eye on developing new production technology using 3D printers.

Turning Point with Bubble Collapse

Miyagi Kogyo was founded in 1941 in Sendai City but was evacuated to Nanyo City in Yamagata Prefecture in the final year of WWII. After the war, the company settled in Nanyo City and achieved growth through OEM production for major shoe manufacturers. The market has changed dramatically with the times. A turning point in recent years was the "collapse of the bubble" according to company president Takahashi. As a result of the bubble collapse, the company's trading partners suddenly accelerated their business overseas. Volume-based business shrunk dramatically, so the company was forced to make a business decision to shift toward a high mix low volume business model. The company firmed up its strategy to adopt a business model based on low volume and gradually began changing the attitude in the manufacturing workplace. Eventually it successfully created a system where the business could survive on a high mix low volume model. As a result of not being able to pursue a high volume based business, "We wound up surviving as a high mix low volume shoe manufacturer," says Takahashi.

Easy Shoe Ordering System

One model established for the high mix low volume strategy was a custom-made system that makes ordering shoes easy. Customers choose from over 100 types of foot shape samples to fit their own feet, and from there a shoe craftsman makes minor adjustments to arrive at a finished shoe. By offering over 100 samples, Miyagi Kogyo devised a way to offer custom-made shoes at a more reasonable price than if starting from scratch with a wooden form. This year marks about ten years since the company began earnestly offering this system, and it built a sales network by partnering with reliable shoe stores. Today, approximately 250 stores nationwide offer the company's custom-made shoes. However under the current circumstances, "The limit is about 300 stores," says Takahashi.

Taking on Challenge in Europe, the Home of Shoes

Miyagi Kogyo's proprietary system accounts for approximately 20% of its sales. Overseas there are stores in countries such as the US, Canada, and China that offer shoes ordered through this system that is without peer even globally. The company's challenge moving forward will be overseas sales. Currently the percentage of overseas sales is still very low, but the company is planning to focus on growing business in Europe, the home of shoes. Building a track record overseas will also lead to enhancing business domestically.

Currently, the company's three main areas of business are custom-made shoes, a comfort shoe series under the company's proprietary brand, and OEM manufacturing of genuine leather men's and women's shoes. The company offers OEM manufacturing starting at low volumes such as a few dozen pairs of shoes of a single design and color. OEM manufacturing accounts for half of the company's sales. By gradually shifting to a high mix low volume model after the bubble economy collapse, the company changed the attitude in the manufacturing workplace and evolved its manufacturing. Miyagi Kogyo, which is engaged in the production of quality shoes, has also attracted young workers from across the country seeking to become shoemakers. Of the company's approximately 80 employees, about 20 are in their 20s or 30s. As a result of a blend of young and veteran craftsmen, an environment exists that fosters the production of creative and high quality shoes.

As for future development of the company's own brand, Miyagi Kogyo aims to develop ideal shoes for the medical and human services sectors. The company always has its mind on shoe manufacturing that is clearly distinct from ready-made shoes. Research of new manufacturing technology using 3D printers is conducted with overseas competition in mind. Looking ahead, Takahashi says, "How will we continue to improve our business model? We will carry on the challenge from Yamagata."

Many kinds of shoes are in a factory.

Many kinds of shoes are in a factory.

One Point: Key Point is Foreign Market

Solution to Survival

The business environment has become markedly more difficult for small and medium sized businesses that operate simply on volume. One solution to survival moving forward is to create a unique business model that specializes in high mix low volume production. By establishing an easy shoe ordering system, Miyagi Kogyo enhanced the advantage of high mix low volume production. The foundation of this lies in shoes manufactured to satisfy customers.

Company Data

President: Kazunori Takahashi

Kazunori Takahashi

Company name Miyagi Kogyo Corp. & One's Co.,Ltd.
President Kazuyoshi Takahashi
Industry Type Leather Shoe Manufacturing and Sales
Address 300 Miyauchi, Nanyo-shi, Yamagata Prefecture, Japan
Phone 0238-47-3155

Printing day:April 7, 2014

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