by Corky Alexander
(Editor’s Note: As Japan’s persistent economic woes continue to cast a glum perspective over the area’s—indeed, the world’s—commercial and marketing prognosis, it becomes difficult to realize that just a few short years ago, we were in the midst of that rarified “bubble economy” in which everyone in this country seemed to have more money than really necessary. Throughout this stressful period of economic adjustment, many foreigners doing business in Japan have persevered, convinced that hard work, inventiveness and capitalistic determination will see them through. In the second installment of this new Weekender series, we continue to interview some of these “success stories” in an effort to learn what factors make these entrepreneurs click in the face of contrary conditions.)
Ernie Higa, born a sansei in Honolulu 40-odd years ago, has become the personification of the theory that a bicultural kid can turn that particular circumstance into a positive factor in business, social adjustment—and life. He’s President and Chief Executive Officer of Higa Industries, an interestingly diversified company that imports lumber from British Columbia and the U.S. northwest, sophisticated medial equipment from the States and owns the Japan franchise for the mighty Domino’s Pizza. Ernie admits that success in business helps by having a wealthy father and an inheritance, but the fact remains that Ernie, youngest of four Higa kids, took over the family business, revamped it, undertook new challenges and made it into one of the most progressive, fastest-moving companies on the scene.
Ernie spent his formative years in Tokyo, dividing his time between Japan, Honolulu and the U.S. mainland. Ernie’s father, Yetsuo (Yets) Higa, came to Japan in the early ’50s from his native Hawaii and made a fortune in a number of always-successful enterprises. Ernie had two older brothers, Howard and Arnold, and an older sister, Merle.
When Yets retired in 1979, he had three businesses and four kids; he “gave” each of the older offspring a piece of the action, leaving young Ernie with a hunk of cash and much ambition. Ernie had graduated from ASIJ here, then Wharton School of the University of Pennsylvania, finally earning his MBA at Columbia University in New York. Earlier, he also attended school at both lolani and the exclusive Punahou in Honolulu.
He returned to Tokyo, worked in the family business for three years before assuming the presidency. His three siblings went on to other enterprises both in Tokyo and Honolulu.
Shortly after Ernie Higa took over the president’s position in Y. Higa Corporation, he moved to assimilate three separate companies under one entity which has recently been re-established as “Higa Industries.” The firm is somewhat unusual in that all its business involves imports from North America. “We are definitely not a part of the balance of payments problem,” Ernie states. “We import all our lumber from B.C. and Washington state, the state-of-the-art neurosurgical products as exclusive sales agent for Pudenz-Schulte Medical Research Corporation in California, and as the exclusive franchise for Domino’s pizza, importing a lot of the products from America.”
He credits his bicultural upbringing with much of the success being enjoyed in all three fields. “If we were doing business in the U.S., there would be no need for someone like me,” he asserts. “However, in Japan, with its multi-layered system of distribution and sales, it is vital to understand the Japanese processes. The U.S. market is not nearly as complicated as here in Japan.
“In the States, if you have a good product, you simply go out and sell it; you don’t need someone like me to handle the deal. But the converse is not true. In Japan you have the complicated distribution system and the particularly oblique way of conducting business. My own raison d’etre is to bring U.S. products to Japan.
“Understanding what pleases the Japanese consumer is vital. One can learn this by being brought up in this one-of-a-kind atmosphere. You know what I mean: often, it’s how things look rather than other considerations. For instance in the lumber business, we own our own sawmill in B.C. There we developed the system of cutting lumber to the sizes and specifications that fit Japanese home-building needs. The lumber arrives here precut to the specifications needed here; thus, no waste.
“Even in the medical supplies and equipment, there are needs and requirements Japanese consider unique to themselves. We try to specialize in certain equipment—for implants, for example—that will not compete with the bigger Japanese importers.
“The pizza business certainly needed adaptation to the Japanese taste. We were the original franchise here, opening our first store in Ebisu Sept. 30,1985. We also pioneered the home delivery aspect, but first we had to overcome the wary Japanese attitude to what we were trying to sell. Most had never heard of pepperoni, for instance, nor Italian sausage. They thought the first was some sort of bell pepper and the latter a hot dog on a bun.
“The Domino’s people back in Michigan thought we were absolutely nuts when we introduced such locally prized toppings as squid, teriyaki and tandoori chicken. By this time, however, they are finally convinced that we know what we’re doing and that—again—that bicultural knowledge has paid off.”
From that first little store in Ebisu almost a decade ago, Domino’s, under the Higa aegis, now has 103 stores, including 35 in the Osaka-Kobe area. Another 15 to 20 stores will be opened in the Tokyo Yokohama area before next spring.
Two years ago, Higa Industries Hawaii bought 18 Domino’s stores on Oahu, and supervise five on Kauai, Maui and the Big Island.
Knowing what will appeal to the Japanese consumer, while at the same time understanding the business mores of the United States has paid off for bicultural Ernie Higa. A true success story.