Should a New Business Continue or Withdraw? Students Experience Decision-Making from a Managerial Perspective in 'Management Administration'

The Management Administration course, taught by Associate Professor Hirotaka Yanagida, has begun. This subject aims to deepen understanding of essential modern business management and learn how to theoretically solve issues currently faced by companies. In this class, students experienced managerial decision-making regarding challenges faced by a suit retailer's new business initiative. Through discussion, they cultivated problem-solving skills to think through questions without clear answers while learning management theories.

What are the challenges facing this successful new business?

This class covered a case study on a new business project by a company primarily selling suits. The company launched a suit subscription service called 'Suitsbox.' After the service began, many applications were received, marking a smooth start. However, the primary users were not the originally targeted young generation, but people in their 40s who also use the physical stores. This led to cannibalization, where the service competed with physical stores for sales. Furthermore, problems were discovered concerning the subscription profits relative to the cost of suits and cleaning fees. Students, imagining themselves as members of a management board, discussed whether to continue 'Suitsbox' in the future.

Discussion on the fate of 'Suitsbox'

First, students analyzed the problems facing 'Suitsbox.' While profits from users were low, costs such as the cost of suits and cleaning fees created issues in the cost structure. Based on this, three options were presented to the management board: continue with adjustments, temporarily suspend the business to rework the strategy, or withdraw.

Since the business had difficulties, opinions favoring suspension emerged, such as "temporarily suspend to revise the strategy since there are users" and "withdraw to avoid losses caused by competing with physical store users for profits." On the other hand, some argued, "We should continue because there are hidden benefits like avoiding the risk of damaging the company's image by closing the business and increasing awareness of our products." The discussion became intense. Students realized the need to examine such questions without a "correct" answer from various positions and perspectives as they deepened the debate.

Redesigning challenges for the next new business!

Finally, they considered how the content of the discussion could be utilized for future new business strategies.

Students examined the current situation of people in their 20s and 30s, who were the original target of 'Suitsbox.' They proposed ideas to solve the business challenges and lead to the next project, such as: "Since people in their 20s and 30s have fewer opportunities to wear suits due to the increase in telework, why not propose events such as creating a week where they wear tailor-made suits in collaboration with companies?" or "Using 'Suitsbox' as an entry point for people to get to know the company and offering low-cost rental plans might be good. Since services that lend suits for job hunting already exist, customers who feel 'it was good after using it' could be connected to purchases." They cultivated the ability to think from multiple angles and connect to problem-solving, which is required in actual management sites.