Odakyu Electric Railway Co., Ltd.

Diversification Begins in the 1960s

Until the mid-1960s, Odakyu's main strategic task was to expand its flagship line connecting the western gateway of Tokyo with Japan's most famous tourist resort, Hakone. However, since the mid-1960s the strategy of Odakyu has developed into a second phase, directed toward enhancing the quality of life of the residents along its lines. Odakyu's strategy in the second phase was, as is the case in other major private railway companies, to further promote affiliated divisions and subsidiaries through diversification, and thereby to reinforce the overall strength of the Odakyu Group. The Odakyu Group comprises many diversified divisions and subsidiaries, with Odakyu Electric Railway Company as its core. Their business activities are classified into seven fields: public transport, leisure, distribution, real estate, construction, information services, and overseas business.

In 1967, Odakyu completed the rebuilding of Shinjuku Terminal Building, and in 1975 it opened a branch line, the Tama Line, to Tama New Town for the commuters among the town's 300,000 inhabitants. In 1978, a direct route into all areas of Tokyo was opened by way of the agreement with the Underground Chiyoda Line, enabling trains of both companies to use the same track, dramatically enhancing the function of Odakyu in providing urban transport networks.

However, as the population of the areas along its lines has been growing rapidly, Odakyu's transport capability is increasingly unable to cope with the growing number of passengers. During the rush hours, Odakyu runs one ten-carriage train every two minutes or so, yet the trains are filled to more than twice their capacity, so that the passengers often find it difficult even to read magazines on their journey.

With an increasing number of high-tech industries and universities either newly set up or moving out from the city center, and with population expected to increase further in the areas along the Odakyu Line, the consensus of management is that the only way to solve the problem is to build a four-track line as soon as possible. Odakyu attempted to raise finance for this project in various ways such as obtaining government grants and issuing warrant and convertible bonds as well as foreign bonds in 1978, the first such attempt made by a Japanese railroad company. Having successfully secured such financing, Odakyu began to build a four-track line in the early 1990s. In 1991, Odakyu achieved the extension of its operations to Nishi-Izu, a fashionable seaside resort particularly popular among young people, and developed its business activities into the new area.

Group Management Structure Emerges in the 1990s

As Odakyu moved forward under the guidance of its Best Way Odakyu plan, the company continued to expand, building on its already towering size. In 2002, the company established Odakyu Hotels and Resorts Co., Ltd. as the core entity of its hotel business. On the restaurant side of its business, a subsidiary company, Giraud Restaurant System Co. Ltd., acquired a pasta restaurant company and, together with Odakyu Restaurant System Co., opened 11 new restaurants in 2004. As the company prepared for the future, it had bold plans for its railway business, the essence of Odakyu. The company was working on the construction of a more than ten-kilometer section of multiple double tracks in the greater Tokyo area. The majority of the section was expected to open by the beginning of 2005. Looking further ahead, Odakyu planned to complete construction of multiple double tracks in all its regions by 2014.