Strategy at Yuhisai Koudoukan: Reading the Tea Leaves

Abstract

This field-based case uses a Japanese teahouse and cultural space to discuss broader themes in strategy formation.The material would work well to conduct a strategic capability analysis. Sotatsu Ota, director of Yuhisai Koudoukan (Koudoukan), bought the property to save it from being destroyed in 2008. In the decade since, sales have grown, but the business has yet to turn a profit. Yet there is a traditional piece to teahouses that Ota-san was sensitive about: they were not meant to be prosperous. Koudoukan was a place that served as a cultural embassy, marrying the traditional tea ceremony with modern cultural outreach internationally. Customers were often interesting people from all over the world as well as locals. Yet the space for traditional culture in Japan seemed to be shrinking, even in the face of an aggressive governmental campaign to encourage integration of the old and new. Was there a place for Koudoukan to teach culture, tradition, and creativity to a modernized Japan and a globalized world? Could the primary mission of promoting traditional tea ceremonies become financially successful without violating the tradition wrapped around the original intent of teahouses? Ota-san needed to figure out how best to run Koudoukan in the years ahead. Excerpt UVA-S-0303 Jul. 9, 2018 Strategy at Yuhisai Koudoukan: Reading the Tea Leaves Sotatsu Ota (in kanji: 太田達), director of Yuhisai Koudoukan (Koudoukan), sat on a white-stone bench; before him, a small waterfall snaked its way down the round rocks. He stayed for several minutes, trying to leave his thoughts behind before the tea ceremony that awaited him. Yet he couldn't shake his worries about the future of Koudoukan, a Japanese culture space and teahouse in Kyoto. Ota-san bought the property to save it from being destroyed in 2008. In the decade since, sales had grown, but the business had yet to turn a profit—a situation not exactly unheard of in a global economy where many companies ran on the basis of growth now, profits later. Yet there was a traditional piece to teahouses that Ota-san was sensitive about: they were not meant to be prosperous. Koudoukan was a place that served as a cultural ambassador, marrying the traditional tea ceremony with modern cultural outreach internationally. Customers were often interesting people from all over the world as well as locals. Yet the space for traditional culture in Japan seemed to be shrinking, even in the face of an aggressive governmental campaign to encourage integration of the old and new. Was there a place for a cultural school like Koudoukan in a modernized Japan? Could the primary mission of promoting traditional tea ceremonies become financially successful without violating the tradition wrapped around the original intent of teahouses? Ota-san needed to figure out how best to run Koudoukan in the decade ahead. Introduction of Chadou . . .