1 / 13

Keiretsu and NEC Corporation

Keiretsu and NEC Corporation. Stephanie Hilgeford Charlotte Ford-Cunningham Al Renner. Zaibatsu. Pre-World War II Goal = realize economies of scope Manufacturing, distribution, and banking industries 4 major zaibatsu Matsui, Mitsubishi, Sumitomo, and Yasuda. Zaibatsu Characteristics.

chas
Download Presentation

Keiretsu and NEC Corporation

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Keiretsu and NEC Corporation Stephanie Hilgeford Charlotte Ford-Cunningham Al Renner

  2. Zaibatsu • Pre-World War II • Goal = realize economies of scope • Manufacturing, distribution, and banking industries • 4 major zaibatsu • Matsui, Mitsubishi, Sumitomo, and Yasuda

  3. Zaibatsu Characteristics • Family-controlled monopolies • Holding company at the top of hierarchy • Wholly owned bank subsidiary • Supplied military forces

  4. Keiretsu • Post – World War II • Dissolution of zaibatsu • Removal of decision-making executive • Modified zaibatsu 1950s = keiretsu • Occupation force support because of Mao’s communism and the Korean War • Benefit • Solution to last-period problem • Issue • Monopolistic

  5. Keiretsu • 2 forms • Horizontal • Vertical • 6 major keiretsu • Mitsubishi, Mitsui, Sumitomo, Fuyo, Dai-Ichi Kangyo, and Sanwa • 4 pillars of keiretsu • Lifetime employment, seniority wages, enterprise unions, and consensual capitalism

  6. NEC Corporation • 1899 – company was incorporated • Early 1920s – involvement with Sumitomo • 1925 – ISE transferred 15% of ownership to Sumitomo • 1943- Sumitomo took full control • 1945- Sumitomo ordered to dissolve • Mid-1950s computer industry • 1960s- Honeywell collaboration • 1977- C&C initiative • 1996- Merger with Packard Bell • 2003- NEC goes public

  7. NEC Corporation Today • President: Kaora Yano • Senior Executive Vice Presidents: • Botaro Hirosaki and Masatoshi • Major operations • IT service, IT products, and network systems • 166,800 employees • 328 consolidated subsidiaries • Operation in 44 countries

  8. NEC’s Problems & StrategiesPost WW II • No demand for products • Strategies • President Watanabe’s vision • Public works contracts • Adapt military technology to civilian market • Laid off 2,700 employees • Closed 3 plants and R&D facility Outcome - Recovered in 50s due to new telecom markets

  9. NEC’s Problems & Strategies 60s & 70s • Telecom market saturation • Strategies • President Kobayashi’s vision • Future success in knowledge based products • Total Quality Control movement • Zero-Defect movement • Restructured to 14 autonomous divisions Outcome - Global expansion

  10. NEC’s Problems & Strategies 80s & 90s • Performance hurt by: Japanese recession, strong yen, US competition • Strategies • Expand global markets • PCs sold in Europe • Joint manfacturing ventures in Asia • Merger - Packard Bell NEC PCs Outcome - FY 96: • Net worldwide sales $41 billion • 89 domestic & 38 overseas subsidiaries • 152,719 employees

  11. NEC’s Problems & Strategies98-00 • Packard Bell NEC fails, $1.5 billion net loss • Strategies • Investments: 97 - $285 million, 98 - $225 million • NEC is majority owner • Pulls plug on US retail PC market • Closed CA plant, laid off 2,100 workers Outcome - FY 00: $10 million net income

  12. Summary • Kerietsu system emerged after WW II • Incentivize cooperation, minimize risk, & maximize future profits • NEC a member of Sumitomo since 20s • Kerietsu are less centralized and integrated • NEC’s future: IT service/products, network systems, personal solutions, and electron devices

More Related