Project #38723 - Strategic Management

 

SECTION A – CASE ANALYSIS 

 

Answer Four Questions only [Each question carries 10 marks and Total Marks is 40]

 

Mitsubishi Strategic Development in the World Business Competitive Environment

 

of the Twenty First Century and onwards

 

The Mitsubishi Group of Companies of Japan is the top 25 companies in the world. Its coal-mining and iron mill firms were used its shipbuilding yard and insured by its insurance company group, and so forth. Later, expand the manufacture of aircraft and equipment and active trading. Other business are banking, insurance, warehousing and later diversifying into sectors as papersteelglass, electrical equipment, aircraftoil, and real estate, etc. The diversification include: Mitsubishi Bank (now a part of the Mitsubishi UFJ Financial Group) 1919; Mitsubishi Corporation in 1950; Mitsubishi Heavy Industries; Mitsubishi Motors, the sixth-largest Japan-based auto manufacturer; Mitsubishi Atomic Industry, a nuclear power company; Mitsubishi Chemical; Mitsubishi Power Systems.

 

As of 2007, Mitsubishi Corporation, had become Japan's largest general trading company with over 200 bases of operations in approximately 80 countries worldwide. Together with its over 500 group companies, Mitsubishi employs a multinational workforce. Mitsubishi Motors reached 1.3 million cars of total production. In January 2013, with $197 million, Mitsubishi took over meat processor Yonekyu Corp. In May 2014, Germany’s Siemens announced it had signed a deal to enter a joint venture with Mitsubishi Heavy Industries to provide plants, products and services for the metals industry. The joint venture is 51% owned by Mitsubishi, while the remaining stake is held by Siemens.

 

The Mitsubishi Group has no parent company but made up of 40 individual companies operates under the direction of the three important companies: the Mitsubishi Bank, the Mitsubishi Corporation, and Mitsubishi Heavy Industries. The senior managers of these three companies act as the co-chairman of a coordinating board called the Kinyo-Kai, or Friday Conference. Core members are merely all its established companies of Mitsubishi.

 

In 1921, Amagasaki, Hyōgo, established a glass, ceramics and chemical industries with the revenue $12.843 billion in 2013 and employed 6,269 (non-consolidated) 51,500 (consolidated). Asahi Glass Co. is one of the largest flat glass producing companies in the world, owning Glaverbel glass plants across Europe and AFG Industries in North America operating on; Automotive glass and industrial material, Bio-technology and environment, commodity and performance chemicals, such as the external surface of the Allianz Arena football stadium, built in 2005 and the world's largest structure. However, AGC Flat Glass Europe was one of the four flat-glass manufacturers involved in the 2007 price fixing scandal uncovered by the EU Competition Commission. The European Commission said that the firms had raised prices in 2004 and 2005 through illicit contacts. The EU's competition commissioner, said that the EU would "not tolerate companies cheating consumers and business customers by fixing prices and depriving them of the benefits of the single market".

 

 

 

Asahi India Glass Ltd. has grown from being a ‘single-plant single-customer’ company to a glass company with 12 plants and customers spanning across India listed on the National Stock Exchange and Bombay Stock Exchange with around 55,000 shareholders. In 1970s, Asahi Glass Co. Ltd. was searching for a new overseas production e.g. Thailand and Indonesia. Its product line was diversified to, innovative products such as Specialty Glass, History Safety Glass, Reflective Glass and Mirror.

 

 

 

In 2006 the Mitsubishi Bank, Ltd., the Sanwa Bank, Ltd., the Tokai Bank, Ltd. have 868 branches as of March 31, 2009. Revenue ¥2.391 trillion (2009) 15%, Profit was ¥213.9 billion (2009) 113%, Total assets ¥160.8 trillion (as of March 31, 2009). The Bank is the largest bank in Japan with the merger of the Bank of Tokyo-Mitsubishi, Ltd. and UFJ Bank Ltd. The bank serves as the core retail and commercial banking arm of the Mitsubishi UFJ Financial Group. Its traditional client base is made up of Japanese corporates, however, overseas corporate lending increased 35% in the nine months until December 31, 2011. The bank has steadily increased its tier 1 capital ratios from 7.76% in 2009 to 13.04% as reported in February 2012, and its credit ratings have been unaffected by developments in Europe – Standard & Poor’s assigned BTMU’s most recent series of senior unsecured bonds an A-plus rating (as at February 2012). 

 

 

 

Kirin Company, Ltd, Japan Brewery was established in 1885 by Norwegian-American brewer, William

 

Copeland, Tokyo, Japan doing business in the Services Strategic management and oversight of the domestic beverage business employs 870 (2013), focused on the Japanese domestic market. In a deal brokered by Thomas Blake Glover, the Japan Brewery was incorporated in Hong Kong in the name of W.H. Talbot and E.H. Abbott with financial backing provided by a group of Japanese investors. Kirin's brewery operations also extend overseas, through strategic alliances, subsidiaries, and affiliates, to ChinaTaiwanAustralia, the PhilippinesEuropeNew Zealand and the United States. The company holds a 100% stake in Lion Nathan Limited, a consolidated subsidiary that is based in Australia but has particularly important operations in China. Kirin has a 48% stake in San Miguel Brewery, the dominant brewer in the Philippines. Kirin now applies its fermentation technology to areas such as plant genetics, pharmaceuticals, and bioengineering.

 

Meiji Yasuda Life Insurance Company, Tokyo is part of Mitsubishi group, a life insurance in 2004 from the merger of Meiji Life and Yasuda Life. The company is one of the oldest and largest insurers in Japan. Mitsubishi Corporation is Japan's largest trading company employs over 60,000 people and has seven business segments, including finance, banking, energy, machinery, chemicals and food. Chemicals, Construction, Energy, Metal, Food and Consumer Goods with revenue was ¥19,233,443 million (2011).

 

 

 

The Mitsubishi Aircraft Corporation (MJET) is an aircraft manufacturer. The company was established on April 1, 2008 as a subsidiary of Mitsubishi Heavy Industries (MHI) to develop and produce the Mitsubishi Regional Jet (MRJ), a 70 to 90 passenger regional airliner. MHI is the majority shareholder of the company, with Toyota Motor Corporation owning 10%.

 

Mitsubishi Electric Corporation is a Japanese multinational electronics and electrical equipment manufacturing company headquartered in TokyoJapan. It is one of the core companies of the Mitsubishi Group. Revenue¥3,567.1 billion (2013), Profit ¥69.5 billion (2013), Total assets   ¥3,410.4 billion (2013) and employed 120,958 (2013).

 

MHI has shipbuilding facilities in NagasakiKobe and Shimonoseki, Japan is the primary shipbuilding division specialized commercial vessels production, including LNG carriersoil tankers and passenger cruise ships. The company is developing 7-MW-turbines for offshore wind power. Tests were done for 2013 in Europe.

 

Despite the ongoing tensions between Chrysler and Mitsubishi, they agreed to unite in a vehicle manufacturing operation in Normal, Illinois. The 50/50 venture provided a way to circumvent the voluntary import restrictions, while providing a new line of compact and subcompact cars for Chrysler. Diamond-Star Motors (DSM)—from the parent companies' logos: three diamonds (Mitsubishi) and a pentastar (Chrysler)—was incorporated in October 1985, and in April 1986 ground was broken on a 1.9 million square-foot (177,000 m²) production facility. In 1987, the company was selling 67,000 cars a year in the U.S., but when the plant was completed in March 1988 it offered an annual capacity of 240,000 vehicles. Mitsubishi Motors went public in 1988, ending its status as the only one of Japan's eleven auto manufacturers to be privately held. Mitsubishi Heavy Industries agreed to reduce its share to 25 percent, retaining its position as largest single stockholder. Chrysler, meanwhile, increased its holding to over 20 percent. The capital raised by this initial offering enabled Mitsubishi to pay off part of its debts, as well as to expand its investments throughout south-east Asia where it was by now operating in the PhilippinesMalaysia, and Thailand.

 

While Mitsubishi was riding high off of profitable vehicles such as the Diamante and Pajero, Honda was caught off-guard with the SUV and truck boom. Although sales of SUVs and light trucks were booming in the U.S., Japan's car manufacturers dismissed the idea that such a trend could occur in their own country. Nakamura, however, increased the budget for sport utility product development, and his gamble paid off; Mitsubishi's wide line of four-wheel drive vehicles, from the Mitsubishi Pajero Mini kei car to the Delica Space Gear passenger van, rode the wave of SUV-buying in Japan in the early to mid-1990s, and Mitsubishi saw its overall domestic share rise to 11.6 percent in 1995.

 

Two years after the merger of Daimler and Chrysler to form DCX, the U.S.-German conglomerate paid US$1.9 billion for a controlling 34 percent of MMC. The price reflected a US$200 million discount on the originally agreed figure, caused by the public disclosure of the defect cover-up scandal. In March 2001 it increased its stake to 37.3 percent when it acquired Volvo's stake in MMC's truck-making operations, further boosting Mercedes' share of a market it already dominated. However, boardroom wrangling at DCX in April 2004 prevented them offering financial assistance as Mitsubishi attempted to reduce its crippling debts. When a US$4 billion rescue package was agreed with Tokyo-based Phoenix Capital in May 2004, DCX's stake was reduced to 23 percent, and further recapitalizations subsequently diluted the holding to 12.4 percent.

 

New major stockholder Phoenix Capital followed suit the following month, selling all but 50 million of its 575 million shares to JPMorgan on December 9, 2005. Once again, the investment bank offloaded their purchase within a few days for tens of millions in profit. In both cases, the eventual buyers were part of the Mitsubishi keiretsu, returning MMC to Japanese ownership.

 

Mitsubishi has been allied with PSA Peugeot Citroën since 1999, after they agreed to co-operate on the development of diesel engines using the Japanese company's gasoline direct injection (GDI) technology. They united again in 2005 to develop the Peugeot 4007 and Citroën C-Crosser sport utility vehicles (SUVs), based on the Japanese company's Mitsubishi Outlander.

 

The first establishment jointly owned production facility in Kaluga which will manufacture up to 160,000 Outlander-based SUVs for the fast-growing Russian market. They are also collaborating in the research and development of electric powertrains for small urban vehicles. In November 2013, Mitsubishi Motors announces they will sell a model produced by Renault Samsung in the Busan factory in South Korea.

 

In Europe, Mitsubishi Motors used diesel engines supplied by the German manufacturer Volkswagen for some of its mid-sized cars, such as the LancerGrandis, and Outlander. The Colt name appears frequently in Mitsubishi's history since its introduction as a rear-engined 600cc sedan in the early 1960s. Today, it most commonly refers to the Mitsubishi Colt subcompact in the company's line-up, but is also the name of MMC's import/distribution company in the United Kingdom, the Colt Car Company, established in 1974. For the first decade of its existence, before Far Eastern auto manufacturers had established their reputations, its cars carried the "Colt" badge in Britain instead of "Mitsubishi".

 

Malaysian manufacturer Proton was initially very dependent on Mitsubishi Motors, only assembling their 1985 Proton Saga using MMC components at a newly established facility in Shah Alam. Subsequent models like the Wira and Perdana were based on the Lancer/Colt and Galant/Eterna respectively, before the company finally produced entirely self-developed vehicles, the Waja in 2001, and the Proton Gen-2 in 2004. At its peak, the car maker controlled 75 percent of its domestic market, even after Mitsubishi ended their 22-year partnership in 2005, selling their 7.9 percent stake for RM384 million to Khazanah Nasional Berhad. However, in October 2008, Proton renewed its technology transfer agreements with MMC, and the Proton Inspira (the Proton Waja replacement) is to be based on the Mitsubishi Lancer platform and official launched on 10 November 2010.

 

South Korean manufacturer Hyundai, built the Hyundai Pony in 1975 using MMC's Saturn engine and transmissions. Korea's first car, it remained in production for thirteen years. Mitsubishi held up to a 10 percent stake in the company, until disposing of the last of its remaining shares in March 2003. The 1985 Hyundai Excel was sold in the United States as the Mitsubishi Precise between 1987 and 1994, whereas several other Mitsubishi models were rebadged as Hyundai, namely the Mitsubishi Chariot (as the Hyundai Santamo), the Mitsubishi Pajero (as the Hyundai Galloper) or the Mitsubishi Delica (as the Hyundai Porter).

 

As of 2006 Mitsubishi has four joint ventures with Chinese partners. South East (Fujian) Motor Co Ltd, Shenyang Aerospace Mitsubishi Motors Engine Manufacturing Co Ltd, Harbin Dongan Automotive Engine Manufacturing Co Ltd - A subsidiary of Harbin Hafei Automobile Industry Group Co Ltd, Hunan Changfeng Motor Co Ltd - A subsidiary , Chang Feng (Group) Co Ltd.

 

Mitsubishi strong presence in south-east Asia reversed themselves as a result of the in 1991 with the advent of the collapse of the Japanese asset price bubble, referred to in Japan as the beginning of the Lost Decade and continued to 1997. The collapse was partly the result of the Plaza Accord agreement in 1985, which sought to equalize the United States dollar with the Japanese yen and the German mark. In September of that year the company closed its Thai factory in response to a crash in the country's currency and plummeting consumer demand. The large truck plant, which had produced 8,700 trucks in 1996, was shut down indefinitely. In addition, Mitsubishi had little support from sales in Japan, which slowed considerably throughout 1997 and were affected by that country's own economic uncertainty into 1998. Other Japanese automakers, such as Toyota and Honda, bolstered their own slipping domestic sales with success in the U.S. However, with a comparatively small percentage of the American market, the impact of the turmoil in the Asian economy had a greater effect on Mitsubishi, and the company's 1997 losses were the worst in its history. In addition, it lost both its rank as the third largest automaker in Japan to Mazda, and market share overseas. Its stock price fell precipitously, prompting the company to cancel its year-end dividend payment.

 

In November 1997, Mitsubishi unveiled an aggressive restructuring program that aimed to cut costs by ¥350 billion in three years, reduce personnel by 1,400, and return the company to profitability by 1998. But while the program had some initial success, the company's sales were still stagnant as the Asian economy continued to sputter. In 1999, Mitsubishi was forced once again to skip dividend payments. Its interest-bearing debt totalled ¥1.7 trillion.

 

Mitsubishi Plastics, Inc. is a Japanese chemical company in TokyoJapan, produces various kinds of synthetic resins. The Company's products include polyvinyl chloride pipes and films. The Company also manufactures construction materials and electronic industry materials. Hishi Plastics USA, an ISO 9001:2008 Quality System certified subsidiary, located in Lincoln Park, New Jersey, is focusing R&D on non-palate alternatives to traditional plastic resins. These include corn & soya based compounds as well as materials of a completely distinct origin. At July 29, 2007 the company are delisted its stocks from Tokyo Stock Exchange and Osaka Securities Exchange. Mitsubishi Chemical Holdings Corporation acquire the 100% of company.

 

Mitsubishi Research Institute, Inc. (MRI), (1970), invested by the various companies of the group (currently capitalized at 5,302,000,000 yen), and is a Think tank, representative of Japan. It is the consulting firm of Mitsubishi Group. It has its branches in TokyoOsaka and Nagoya, and keeps an office in Washington, D.C.. It owns dozen of subsidiaries, such as Mitsubishi Research Institute DCS, the IT support arm of Mitsubishi UFJ Financial Group (MUFG), and MUFG (40 percent) competing with Nomura Research Institute of Nomura Group, Mizuho Research Institute of Mizuho Financial Group, Japan Research Institute of Sumitomo Mitsui Financial Group, Boston Consulting Group, Arthur D. Little.

 

Sources:

 

All articles are taken from different Wikipedia Encyclopedia, texts dated as on; 6 August 2014; 1 July 2014; 31 July 2014; 18 May 2013; 21 March 2013; 5 August 2014; 16 August 2014; 7 June 2014; 8 April 2013.

 

 

 

(Please note, your answers may and could be based on the Text of the above Passage, your other source of readings, lectures series as well as your own).

 

 

 

Answer only four questions as well as their sub-question(s) below [Each question carries 10 marks and Total Marks is 40]

 

 

 

1.      Describe Mitsubishi global strategy in maintaining its strengths to enable it to retain its market share regionally and globally?

 

[10 marks]

 

 

 

OR

 

 

 

 

 

1b) Discuss the factors and objectives of Mitsubishi’s cooperative strategy with three examples.

 

[10 marks]

 

 

 

2.      Discuss the factors and objectives of Mitsubishi’s cooperative strategy with three examples.

 

[10 marks]

 

 

 

3.      Identify the opportunities and threats faced by Mitsubishi in dealing its business for the last few decades?

 

[10 marks]

 

 

 

4.      Discuss diversification strategy that Mitsubishi incorporate into its business so that it can stay at above average performance?

 

[10 marks]

 

 

 

5.      Compare Mitsubishi strategic business with one of Japanese car brands; Toyota or Nissan or Honda?

 

[10 marks]

 

[10 X 4 = 40 TOTAL MARKS]

 

 

 

 

 

SECTION B - Answer any THREE (3) questions out of FIVE (5) questions

 

QUESTION 1.a):

 

With examples, Argue, in not least than 250 words regarding horizontal and vertical diversification by a firm?                                                                                                                                                                            [20 marks]

 

OR

 

QUESTION 1. b):

 

1.1.              With examples, Argue, in not least than 150 words, that diversifying the products and/services may improve production?                                                                                                                                                                                                                                                                                                                                [10 marks]

 

1.2.         With examples, describe in not least than 150 words that why a business should not diversified?                                                                                                                                                                     10 marks]

 

                                                                                                                                                                                [Total 20 marks]

 

QUESTION 2.a):

 

2.1.         Discuss, why is it beneficial of acquisition over internal development?    

 

[10 marks]

 

2.2.         Discuss, with examples four disadvantages of acquisition?

 

[10 marks]

 

       [Total 20 marks]

 

OR

 

QUESTION 2.b):

 

2.1.         Discuss, with example three benefits of acquisition over internal development?    

 

[10 marks]

 

 

 

2.2.         Discuss, with examples four disadvantages of acquisition?

 

[10 marks]

 

                [Total 20 marks]

 

 

 

QUESTION 3.a):

 

 

 

3.1.         Describe four global strategies, and give examples of each?                                                                                                                                                                                                                                        (10 marks]

 

 

 

3.2.         Why should a business concentrate on its domestic operation?

 

     [10 marks]

 

                                                                                                                                                                [TOTAL 20 MARKS]

 

 

 

OR

 

 

 

QUESTION 3.b):

 

 

 

3.1.         Describe four international strategy characteristics, and give examples of each?                                                                                                                                                                                                  (10 marks]

 

3.2.         Why should a business avoid operating internationally?

 

     [5 marks]

 

3.3.         Discuss two possible costs a firm has to bear when operating globally?

 

     [5 marks]

 

                                                                                                                                                                [TOTAL 20 MARKS]

 

 

 

QUESTION 4.a):

 

 

 

4.1. Why many computers, operating software and other networks firm associate themselves in alliances? Give three examples of competitive advantages derived from such strategy?    

 

[12 marks]

 

 

 

4.2.   What are the shortcomings of strategic alliance?  

 

[8 marks]

 

                [TOTAL=20 MARKS]

 

 

 

OR

 

 

 

QUESTION 4.b):

 

 

 

4.1. Why many airlines firms associate themselves in alliances? Give three examples of   competitive advantages derived from such strategy?  

 

[12 marks]

 

 

 

4.2.   Discuss the risks associated with alliances.  

 

[8 marks]

 

                  [TOTAL=20 MARKS]

 

QUESTION 5a:

 

 

 

5.1.         Public Corporation practices in the western countries are often tied up with shareholders goals, discuss? Give three examples.

 

                                                                                                                               [10 marks]

 

 

 

5.2.         What are the four roles of the Top Management in a big multinational firms? Give three examples that you could observe from the real world undertakings?                

 

[10 marks]

 

 [TOTAL = 20 MARKS]

 

 

 

OR

 

QUESTION 5b:

 

 

 

5.1.         Discuss how managerial team in Public Corporation practices strategies to their advantages against the shareholders’ goals? Give three examples.

 

                                                                                                                               [10 marks]

 

 

 

5.2.         What are the four roles of the Board of Directors in corporate governance?                

 

[10 marks]

 

 

 

 [TOTAL = 20 MARKS]

 

 

 

 

 

 

 

END OF QUESTIONS

 

 

 

 

 

 

 

Subject Business
Due By (Pacific Time) 08/30/2014 12:00 am
Report DMCA
TutorRating
pallavi

Chat Now!

out of 1971 reviews
More..
amosmm

Chat Now!

out of 766 reviews
More..
PhyzKyd

Chat Now!

out of 1164 reviews
More..
rajdeep77

Chat Now!

out of 721 reviews
More..
sctys

Chat Now!

out of 1600 reviews
More..
sharadgreen

Chat Now!

out of 770 reviews
More..
topnotcher

Chat Now!

out of 766 reviews
More..
XXXIAO

Chat Now!

out of 680 reviews
More..
All Rights Reserved. Copyright by AceMyHW.com - Copyright Policy