Mizuno Corporation

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Mizuno Corporation

12-35, 1-chome, Nanko-kita
Suminoe-ku, Osaka 559
Japan
81-6-614-8315
Fax: 81-6-614-8389
Web site: http://www.mizuno.co.jp

Public Company
Incorporated: 1906
Employees: 3,911
Sales: $1.59 billion (1996)
Stock Exchanges: Tokyo Osaka Nagoya
SICs: 2329 Men’s and Boys’ Clothing, Not Elsewhere Classified; 3949 Sporting and Athletic Goods, Not Elsewhere Classified; 7999 Amusement and Recreation, Not Elsewhere Classified

Mizuno Corporation is a world leader in sports equipment manufacturing. In particular, Mizuno’s baseball equipment is considered one of the foremost brands, and the manufacturer’s irons are the leading clubs used on the Professional Golf Association tour. As of 1997, six of the past ten Masters winners had played with Mizuno irons. The company produces its products in-house and maintains offices and dealers across the globe, including in Japan, France, Canada, Germany, England, Taiwan, and the United States.

The Early Years

In 1906, a devoted fan of baseball—Rihachi Mizuno—started a sporting goods store that would grow into the international corporation of the 1990s. Rihachi Mizuno, a kimono shop worker, saw his first baseball game in Kyoto when he was 18 years old. He loved the game, which dated back to 1867 in Japan, and soon opened his own baseball equipment store, offering custom uniforms as well as sports clothing. Eventually, Rihachi Mizuno expanded into manufacturing sports equipment. His baseballs became the standard of excellence for the product in Japan; Rihachi Mizuno rejected any baseballs that did not bounce to his eye level—4 feet and 5 inches—when dropped 16.5 feet.

During the 1920s, Mizuno supported the Olympic games and began to expand the operations of his company. In 1927, the company started manufacturing ski equipment; by 1933, Mizuno engaged in the manufacture of golf equipment. Mizuno opened a small factory based near Osaka, Japan, in 1934 for making baseball bats, balls, and uniforms, as well as for manufacturing golf clubs and skis. The company continued to expand into other areas of sports and began manufacturing tennis equipment in 1943.

The purpose of the Osaka factory changed drastically during World War II. At the request of the Japanese government, Mizuno fitted its manufacturing facility for making military ordnance building gliders instead of bats and balls. After the war, Mizuno manufactured housewares such as furniture and kitchen ware. Eventually, the company returned to producing baseball equipment, in particular sailcloth for gloves and wooden bats with resin added for longevity.

By the mid-1900s, Mizuno was once again at the forefront of the sporting goods industry, supporting the 1964 Olympics and the Sapporo Winter Olympics in 1972. The company became known as an innovator in its field in 1977, creating customized gloves for major league baseball players. Nubuyoshi (Yoshi) Tsubota, a master craftsmen for Mizuno, began holding glove making workshops at the spring training camps of major league teams. On the spot, he would customize gloves and other equipment for the teams’ players. Owing to his efforts, the number of professional baseball players using Mizuno equipment grew, with 29 percent opting for the company’s merchandise.

The Need to Rejuvenate in the 1980s

Despite the company’s many past successes, the need to revitalize Mizuno became clear during the 1980s. The company suffered from a lagging corporate image, not to mention a sluggish Japanese economy, so in 1982 Mizuno launched an American division under the direction of Jack Curran. A sports equipment veteran, Curran worked at bowling’s Brunswick

Corporation for 18 years and headed golfs MacGregor Corporation until 1982. At the Masters golf tournament that year, Curran asked Mizuno executives to consider starting a U.S. operation. The company had been contemplating the idea for some time and decided Curran’s timing was right. He began Mizuno Corporation of America from his home, with one other employee for support. “From the Japanese side,” Curran explained to Industry Week, “we had strong R&D, a strong product line, and, initially, a strong sourcing base overseas. Within a relatively short time, Mizuno had catapulted into the American sporting-goods scene with several technologically advanced products and nationally known endorsers.”

The following year, the U.S. division launched the Black Turbo, a golf club with a graphite head. The company also offered its first mobile golf workshop to the pros on the Professional Golf Association’s (PGA) tour in 1983. Within two years, Mizuno Corporation of America’s golf division established a manufacturing plant in Norcross, Georgia.

In 1987, Masato Mizuno, grandson of the firm’s founder, gained control of all the company’s operations, assuming the presidency from his father. Though considered an “untradi-tional” leader, Masato Mizuno nevertheless helped the company prosper. According to one company advisor, commenting in Sports Illustrated, Masato Mizuno is “not the regular Japanese president of a billion-dollar company.” This Mizuno had studied at Carthage College in Wisconsin during the 1960s. He utilized technology to enhance the company’s operations, added a computerized inventory system, and increased automation in manufacturing; for example, Mizuno installed robots able to wind 4,000 baseball cords daily in company plants. He was also an aggressive marketer. By 1989, Mizuno controlled 30 percent of the Japanese golf club and baseball markets. Mizuno’s goal became global dominance of the markets. He espoused “full-service sports marketing,” including computerized golf lessons, acupuncture treatments, and massages for Mizuno customers. “We want to be able to meet every sports need,” he explained to Sports Illustrated, “and we want true internationalization. Those are our goals.”

By the end of the decade, the company secured the endorsements of numerous star U.S. athletes, including football’s Joe Montana and John Elway and Olympians such as Carl Lewis. Two hundred and forty major league baseball players in the United States utilized Mizuno equipment during 1989, notably gloves and shoes. “You see the name so much,” San Francisco Giants manager Roger Craig told Sports Illustrated, “you hardly think it’s Japanese.” The company also launched new products. Prior to the Seoul Olympics in 1988, track-and-field star Florence Griffith Joyner signed a million dollar shoe contract with Mizuno, then in 1989 the company introduced her line of Flo-Jo sportswear. Mizuno also made golf history that year, debuting the first all-titanium iron—the MGC-35. By the end of the year, Mizuno achieved $1 billion in sales.

Dominance in the 1990s

In 1990, Japan’s Ministry of International Trade and Industry (MIDI) hoped to make sports and recreation a formidable industry for the country, projecting an $821 billion market by the year 1999. Masato Mizuno committed to this vision as well. He told Time: “Grandfather founded the company, and father introduced technological innovations. Now it’s my turn to expand and truly internationalize it.”

Capitalizing on the cost-effective labor market and its close proximity to the U.S. border, in February 1990 Mizuno established a $3 million production facility in Juarez, Mexico, for the manufacture of golf bags. This brought the company a product total of 35,000 and dominance in the United States. Hundreds of baseball players in both U.S. professional leagues wore Mizuno shoes and gloves, and one million of the company’s golf clubs sold in the United States in 1990, including the first all-titanium wood—the Ti-110.

Mizuno gained further notoriety at the summer Olympics held in Barcelona, Spain, during 1992. Twelve of the gold medalists at the games wore Mizuno shoes, as did 30 of the silver and bronze medalists. In fact, more winning track-and-field athletes wore Mizuno footwear than that of any other manufacturer. The company improved its manufacturing processes in 1992. It began sheet rolling golf shafts and utilizing structural reaction injection molding (SRIM)—a completely automated, nonsolvent process—for tennis racket production. Mizuno also started production of graphite skis, tennis rackets, baseball bats, and sports shoes. Employing composites stronger and wood or steel, the company incorporated 20 types of carbon fiber into its production operations.

By 1993, Mizuno achieved $1.6 billion in sales and controlled a 7 percent market share of the $750 million golf-club industry, making it the world’s number one sporting goods manufacturer. With products built around technology and innovation, Mizuno launched new items such as the Reactor tennis racquet, which claimed a 200 percent increase in accuracy owing to its symmetrical head and patented string system.

In America, Jack Curran became president of Mizuno Corporation of America, based in Atlanta, Georgia. This branch of the company grew to include 320 employees, five divisions (one in Canada), and manufacturing operations in Georgia, Texas, and Mexico. Mizuno Corporation of America earned $100 million in sales in 1993.

Company Perspectives:

Miz.uno’s mission is to contribute to society through the advancement of sports and the promotion of better sporting life.

A division of Mizuno’s U.S. arm, Mizuno Golf, began an aggressive marketing campaign to promote the TC29 irons in 1994. The company named Doug Woods as marketing director and developed trade and consumer print ads for publication in the fall, as well as television ads for 1995. Similarly, Mizuno Corporation of America’s baseball division earned notoriety in 1996 as the only manufacturer of handcrafted professional catchers’ mitts

Once again, Mizuno played an active role in the 1996 Olympics, which were held in Atlanta, Georgia—home of Mizuno Corporation of America. Athletes wearing Mizuno products performed well in the games. In fact, five of every six medal winners in baseball and softball used Mizuno equipment. Mizuno opened an exclusive chain of retail stores that year to market its baseball equipment. Known as K-KLUB, the shops offered high-quality baseball and softball products with the intention of promoting and developing both sports.

Beginning in October 1996, Mizuno became involved with the Golf Network. The network’s digital satellite broadcasts provided a base for the company’s public activities. Mizuno averaged 15 to 20 commercials each day on the Golf Network.

Mizuno also renewed it commitment to the environment in 1996. The company began preparations for ISO 14001 qualification that year. Mizuno hoped its main Yoro factory would qualify for the International Standards Organization’s benchmark for management control systems that protect the environment. Indeed, the company achieved its certification on June 30, 1997, prompting Masato Mizuno to comment: “Every possible effort will now be exerted to publicly show our corporate attitude, that Mizuno has much interest in and is actively tackling global environment problems.”

A Tightening Market in the Late 1990s

By 1997, the market for sporting goods had become a “confining situation,” according to Mizuno’s Letter to Shareholders in the company’s 1997 annual report. Masato Mizuno explained: “All of us at Mizuno will promote management renovation to get us out of such a stringent situation. At the same time, the organization will continue to improve, so that we can cope with any changes in the form of physical distribution. In this way, business forces as well as the strength of product development will be enhanced to further improve business performance and strengthen our corporate structure.” Mizuno pledged to execute management reforms, to institute a merchandising policy, to establish a personnel management system, and to develop overseas marketing and diversified distribution channel strategies. The company’s long-term plans included global marketing strategies, as well as using state-of-the-art technology and precision craftsmanship in production. Mizuno established a production base in Shanghai, China, and began developing global sales and production tactics.

During this time, Mizuno liquidated the Mizuno Corporation of America and closed the golf equipment and apparel distribution company located in Georgia, owing to unprecedented losses. Instead, the company established Mizuno USA Corporation as its presence in the United States, consolidating its golf brands into T-ZOID and cutting its shoe line by 40 percent. Mizuno also decreased staffing and marketing costs at the U.S. subsidiary, but continued developing its golf products. In order to achieve larger and lighter club heads, for example, Mizuno adapted 7J55—a super Duralumin alloy manufactured by Kobe Steel—for its golf clubs. Lighter than titanium, this strongest type of Duralumin was typically used in aircraft and defense equipment.

Mizuno acted as a gold sponsor of the winter Olympic games held in Nagano, Japan, in 1998. To encourage the spirit of the games, the company offered prizes on 200 Japanese media stations. Mizuno also auctioned Olympic t-shirts over the Internet.

Mizuno’s long-term plans after 1998 included global development of the markets for its merchandise. In particular, the company hoped to advance the positions of it golf, baseball, running, and soccer products in the worldwide marketplace.

Principal Subsidiaries

Mizuno Canada; Mizuno Corporation Niederlassung (Germany); Mizuno Corporation (United Kingdom); Mizuno France; Mizuno Taiwan Corporation; Mizuno USA Corporation.