Boardroom Battle at Otsuka Kagu: The Shareholder’s Dilemma

Japan’s oldest furniture retail chain, Otsuka Kagu Ltd. witnessed significant turmoil in 2015 with the company’s founder and Chairman Katsuhisa Otsuka (Katsuhisa) and his daughter and President of the company, Kumiko Otsuka (Kumiko), fighting for boardroom control. Both of them differed over the strategy of the company with Katsuhisa favouring the business model developed by him, catering to the affluent customer base in Japan. But Kumiko contended that the business model was not in tune with the times and was leading to losses for the company. She pushed for the discontinuation of the old membership-based business model and opened small and cheaper outlets to boost the sales. The fight for boardroom control between the father and the daughter had spilt over to the public domain, with both blaming the other for the company’s misfortune. In a shareholder meeting, both of them prepared contrasting strategies for the company and presented them before the shareholders. The shareholders now had the onerous task of deciding who should be given control of the troubled company. The case provides an ideal opportunity to the participants for evaluating the two strategic approaches threadbare with the Suitability, Acceptability and Feasibility criteria or using criteria like internal consistency, external consistency and dynamic consistency, as part of a Strategic Management curriculum.