Hawaii’s World

By A.A. Smyser

Tuesday, August 17, 1999

Peddling pizza
in Japan

HAWAII-born Ernest Higa recently told the Japan-America Society of Hawaii how he made Domino's Pizza the biggest pizza seller in Japan -- by far.

With his interest aroused by a peek at the wealthy lifestyle of Domino's U.S. founder, Thomas Monaghan, Higa, already successful in other lines of business, looked into Japanese potential for Domino's. He found reasons not to try.

To wit, pizza houses already existed in Japan. They weren't doing very well. Home delivery, an attractive innovation in America, was old stuff in Japan -- used for years for noodles, sushi and more.

Higa then looked beyond the negatives. He found some possible positives. Then-existing Japanese pizza places operated big restaurants in places where real estate was super-expensive. Why not cost-cut with a take-out emphasis where fewer square feet of real estate are needed and operate from back streets where real estate is cheaper?

Why not include Japanese-preferred toppings like squid? Japanese prize it very much.

Why not make Domino's delivery cycles stand out with a "Star Wars" motif that also affords a place to keep deliveries dry when it is raining?

What about a daring promise to deliver within 30 minutes even through crowded Tokyo streets with vague street addresses that baffle foreigners? Some customers ordered, it turned out, just to test the 30-minute promise.

Basic to all this was Higa's belief that Japanese are adopting more and more Western ways, but with a time lag and an emphasis on reshaping them to Japanese wants and tastes. What hadn't worked in the past, he felt, might still succeed in the future.

He took a small plunge in 1985 by opening a single Domino's in Tokyo, had startling success and now owns and operates 205 stores in Japan plus 21 in Hawaii. He uses franchises only for two additional Hawaii stores.

In 1993 President Clinton heard Higa relate Domino's success story at a U.S.-Japan business conference. He ordered 15 with squid topping for his entourage.

Higa, taking no chances, oversaw the order personally. He went with the deliverer to the posh Okura Hotel. He was told security for the Clinton party was such that they could not get through. He argued. Finally someone from the Clinton staff appeared and confirmed the pizza order. Once inside the hotel, Higa heard security guards reporting their progress every step of the way through the halls and up the elevator to the 15th floor, the presidential floor. There the delivery was made and that was that.

Higa's father, Yets Higa, the now-retired founder of Y. Higa Enterprises in Hawaii, had the Pepsi-Cola franchise for Japan and took American baseball teams, including the Yankees, on tours of Japan.

Ernest, the youngest of Higa's four children, got his lower grade education in Switzerland and topped it with business degrees from Columbia University and the University of Pennsylvania.

Along with the success in Japan of McDonald's and Kentucky Fried Chicken, the Domino's venture helps belie the idea that Americans can't succeed in Japan. Higa now lives in Tokyo, speaks both English and Japanese easily, and remains an American citizen.

A.A. Smyser is the contributing editor
and former editor of the the Star-Bulletin
His column runs Tuesday and Thursday.

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