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Goods and Competitor Analysis

Gain insights into Toshiba's competitor analysis framework, background information, corporate strategy, product/market analysis, financial performance, and management team.

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Goods and Competitor Analysis

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  1. SEC China010821BJ-Toshiba Goods and Competitor Analysis

  2. SEC China010821BJ-Toshiba OVERVIEW OF COMPETITOR ANALYSIS FRAMEWORK • 1. Background information • 4. Value chain strategy • Location • Registered capital • Managementteam • Equitystructure • Focus on • Marketing, advertising and promotion • Distribution (channel and sales force) • Starting year • Number of employees • Era analysis • 2. Strategy • 5. Organization and ownership • Mission • Vision • Corporate strategy • Organization structure • Ownership structure • 3. Product/market • 6. Financial performance • Key product offerings • Market position • Sales • Profit

  3. SEC China010821BJ-Toshiba BACKGROUND INFORMATION • 1. Background information • 4. Value chain strategy • Location • Registered capital • Managementteam • Equitystructure • Focus on • Marketing, advertising and promotion • Distribution (channel and sales force) • Starting year • Number of employees • Era analysis • 2. Strategy • 5. Organization and ownership • Mission • Vision • Corporate strategy • Organization structure • Ownership structure • 3. Product/market • 6. Financial performance • Key product offerings • Market position • Sales • Profit

  4. SEC China010821BJ-Toshiba BACKGROUND INFORMATION – TOSHIBA • (As of September 30, 2000) • 1875 by Hisashige Tanaka • Established: • Tadashi Okamura • President & CEO: • US$51,578 million • Total Assets: • Shareholders’ Equity: US$10,054 million • Number of employees: 190,000 worldwide • Domestic Plants, • Branches Offices • And Other Facilities: • Production facilities: 25 • Branch offices: 35 • Sales offices: 23 • Overseas Plants, • Branches Offices • and Other Facilities: • Offices: 10 • Manufacturing companies: 42 • Subsidiaries & affiliates: 72 • Source: Toshiba website, Lit search

  5. SEC China010821BJ-Toshiba BACKGROUND INFORMATION – DALIAN TOSHIBA TELEVISION, LTD • Location: • Dalian, Liaoning Province • Starting year: • 1996 • Registered Capital: • US$30 million • Products: 21’ – 34’color TV (CRT, Projection, Flat) • Unit Sold: color TV 1 million sets, 50% export (Year 2000) • Number of employees: 2,000 • Joint Venture Partners • Type • Toshiba • Foreign Juristic Person's Shares • Toshiba (China) Co. • Foreign Juristic Person's Shares Domestic Juristic Person's Shares • Dalian Daxian (Group) Co., Ltd. • Source: Company website, Lit search

  6. SEC China010821BJ-Toshiba TOSHIBA’S CORPORATE MANAGEMENT TEAM iValue Creation Company CEO: Tsutomu Kawada e-Solutions Company CEO: Hiroo Okuhara Corporate project Social Infrastructure Systems Company CEO: Tsuyoshi Kimura Digital Media Network Company CEO: Atsutoshi Nishida Corporate staff Mobile Communications Company CEO: Tetsuya Mizoguchi Power Systems & Services Company CEO: Toshiyuki Oshima Semiconductor Company CEO: Takeshi Nakagawa President & CEO Tadashi Okamura Display Devices & Components Company CEO: Eisaburo Hamano Corporate support services Medical Systems Company CEO: Masamichi Katsurada Home Appliances Company CEO: Makoto Nakagawa • Source: Company Report, Lit search

  7. SEC China010821BJ-Toshiba HISTORY OF TOSHIBA • Source: Company website, Literature Search

  8. SEC China010821BJ-Toshiba TOSHIBA’S DEVELOPMENT WENT THROUGH THREE STAGES • 1875-1939 • 1939-1978 • 1978- PRESENT • Becoming Industry Leader • Meeting worldwide competition • Business Building • Organization structure • Corporate • strategy • Product Development & Technology • Two Japanese electrical equipment manufacturers merged in 1939 to create Toshiba. • Technological innovation accounted for the companies’ successes. One of the founders was the so-called Edison of Japan. • Main products included transformers, electric motors, light bulbs, radio receivers, and cathode-ray tubes. • The company grew rapidly and became a market leader in the electrical and electronic industry. However, the organization became more bureaucratic. • The company continued to be innovative in the early years, producing many firsts in the industry. However, It lost its innovator image in the 70’s . • Numerous leading products in the electrical and electronics areas. Examples includes Japan’s first vacuum cleaner, first fluorescent lamp, first radar, etc. • Toshiba shifted direction by investing heavily in IT segment. The organization became increasingly global, employing 190,000 employees world-wide with annual sales over ¥ 5 trillion. • IT focus, diversification, innovation and globalization are four key elements of Toshiba’s corporate strategy. • Toshiba is intensively focusing on IT-related business (i.e. telecom and internet), meanwhile, leveraging its legacy businesses to generate stable income • Source: Literature Search; Team Analysis

  9. SEC China010821BJ-Toshiba DEVELOPMENT OF DALIAN TOSHIBA’S TV BUSINESS IN CHINA • 1996-1997 • 1998-2000 • 2001 • Establishing Leadership in PJTV Market • Becoming Toshiba’s Key Global TV Production Base • Business Building • Key initiative • Key results • Founded as a joint venture in 1996, construction was completed in 1997. • Conducted accurate market forecast and implemented just in order inventory management. • Inventory turn-over less than two days. • Made profit the next year. • Focused on high profit margin PJTV segment, and competed on technology, service and management rather than price. • Strengthened customer service • Revenue and profit grew 50% annually. Became the No. 1 market share leader in PJTV segment. • Toshiba decided to relocate its digital TV production to Dalian and invested ¥300 million to expand capacity from one million units to 1.5 million units • exported 800,000 units to Japan. • Source: Literature Search; Team Analysis

  10. Invested companies in China • Total investment • Chief representative • Total number of employees • Importance of China • Future investment plan • 23 • RMB 6 billion • Pintianxinzheng (pinyin) • over 10,000 • “Apart from Japan, Toshiba divides global market into four regions, America, Europe, China and the rest of Asia. China is the only region made up of one single country" • Chief representative of Toshiba in China • "To support China's 10th 5-year plan, we will enlarge our investment in IT industry…. Toshiba has the world-leading LCD related and semiconductor technology. The amount of each investment will exceed I billion USD." • Chief representative of Toshiba in China SEC China010821BJ-Toshiba TOSHIBA WILL FURTHER INVEST IN IT INDUSTRY IN CHINA • Background information • Source: literature research, interview • Source: Literature research, interview

  11. SEC China010821BJ-Toshiba TOSHIBA IS THE LEADING PLAYER IN NOTEBOOK MARKET BOTH IN CHINA AND GLOBALLY • Era analysis of Toshiba in Notebook • Time • Key milestones • 1985 • 1990 • 1993 • 1994 • 1999 • 2000 • Introduced the first notebook in the world • Introduced STN notebook • Introduced color TFT notebook • Introduced Pentium-empowered notebook • Ranked number one in China notebook market for 4 years • Ranked number one in world wide notebook market for 7 years • Source: literature research, interview

  12. SEC China010821BJ-Toshiba STRATEGY • 1. Background information • 4. Value chain strategy • Location • Registered capital • Managementteam • Equitystructure • Focus on • Marketing, advertising and promotion • Distribution (channel and sales force) • Starting year • Number of employees • Era analysis • 2. Strategy • 5. Organization and ownership • Mission • Vision • Corporate strategy • Market position • Organization structure • Ownership structure • 3. Product /market • 6. Financial performance • Key product offerings • Sales • Profit

  13. SEC China010821BJ-Toshiba TOSHIBA’S MISSION AND VISION • Corporate mission • “We, the Toshiba Group companies, based on our total commitment to people and to the future, are determined to help create a higher quality of life for all people, and to do our part to help ensure that progress continues within the world community" • Corporate vision • “To grow with excellence as the leading-edge, internet-ready enterprise globally by accelerating innovation with agility, and to create a 21st century of success hand in hand with our customers" Source: Company website, Lit search.

  14. SEC China010821BJ-Toshiba THREE STRATEGIES PROPEL TOSHIBA TO BECOME A GLOBAL HI-TECH LEADER IN THE NEW MELLIMUM • Accelerate the speed of innovation • Management Innovation (MI2001) is a major initiative being promoted throughout Toshiba Group. It is aimed at advancing creative destruction and competitive superiority • Toshiba as a leading-edge, internet-ready global leader in hi-tech • Champion market-centric management • Customer Relationship Management and Supply Chain Management systems will be deployed to cover company-wide operations. • Be internet-ready • Digital Manufacturing, a new system, will be introduced throughout the Toshiba Group • An IT infrastructure for collaborative engineering will be established • Source: Lit search, external interviews: Toshiba Annual Report

  15. SEC China010821BJ-Toshiba ASSESSMENT OF TOSHIBA'S CURRENT STRATEGIC POSITION – SWOT • Strengths • Weaknesses • Broad and diversified product portfolio • Strong presence in Asia • Strong R&D and manufacturing capabilities • Less customer focused • Weak brand name in cutting-edge information technologies • Unbalanced global presence • Opportunities • Threats • Global digital convergence • Emerging technologies, i.e., Internet, 3G • China joining WTO opens doors to foreign companies • Bureaucratic management style • Its core semiconductor business is a cyclical commodity business • Behind the curve in key IT developments

  16. SEC China010821BJ-Toshiba THERE ARE TWO SUCCESSFUL MODELS IN THE CHINA CTV MARKET, DALIAN TOSHIBA FOLLOWS THE SONY MODEL • The Konka Model • The Sony Model • Capital intensive, aggressive growth through economies of scale in manufacturing and in the sales force • From 1993 to 1998 Konka acquired TV manufacturers: North east Du Dan Jian, San Xi, An Suo, Chong Qing factories to bulk up • Grew capacity by 2 million units from 1993 to 1998 • Through economics of scale and aggressive pricing Konka was able to grow market share from 3% to 11% from 1995 to 2000 • Zero in on the high end, high profit segment of CRT TV market with a strong brand able to command price premiums • Not in a strong presence in unit market share, but the top brand when consumers respond for the brand quality and reliability • Corporate philosophy unwilling to sacrifice profits for larger market share (vast different from Chinese players) • Future target focused on higher end, cutting edge technology TVs e.g. PJTV, Digital TV, LCD and PDP which have significantly higher profit margins. • Source: Lit search, Team analysis

  17. SEC China010821BJ-Toshiba TOSHIBA SHIFTS ITS STRATEGIC FOCUS TO APPLICATION SOLUTION AND CUSTOMER SERVICE IN CHINA NOTEBOOK MARKET • Toshiba notebook strategy* in China • Mission • To be the most responsible IT product application solution and service provider • Strategy evolvement • Time • Strategic focus • 1996 • 1997 • 1998 • 1999 • Product itself • Channel development • Application • Customer service • 2000 • VIP certification focusing on core customers • Channel development into 2nd tier geographies • Application solution of "mobile office" concept • * Toshiba notebook strategy in China is co-developed by Digital China, Toshiba’s exclusive notebook chief-distributor in China • Source: literature research, interview

  18. SEC China010821BJ-Toshiba PRODUCT/MARKET • 1. Background information • 4. Value chain strategy • Location • Registered capital • Managementteam • Equitystructure • Focus on • Marketing, advertising and promotion • Distribution (channel and sales force) • Starting year • Number of employees • Era analysis • 2. Strategy • 5. Organization and ownership • Mission • Vision • Corporate strategy • Organization structure • Ownership structure • 3. Product /market • 6. Financial performance • Key product offerings • Market position • Sales • Profit

  19. SEC China010821BJ-Toshiba TOSHIBA’S GLOBAL NET SALES BY BUSINESS SEGMENT • Yea 2000 (¥ billion) Others ¥473 Information & Communications & Industrial Systems ¥1,858 Home Appliances ¥660 Electronic Devices & Components ¥1,477 Digital Media ¥1,518 Power Systems ¥571 • Source: Toshiba web site, Lit Search

  20. SEC China010821BJ-Toshiba DALIAN TOSHIBA's KEY TV PRODUCT OFFERINGS • Color TVs (inch, model no.) • Projection TV Series: 43’ – 61’ • 61D9UXC • 50D9UXC • 43D9UXC • 50D8UXC • 43D8UXC • Flat TV Series: 21’ – 34’ • 34D8UXC • 34D6DC • 29D8UXC • 29D6DC • 29D3XC • 25D6XC • 21AF6C • CRT TV Series: 21’ – 29’ • 29D2DC • 29D2XC • 25D2XC • 25E3DC3 • 21D2NC Source: Company website, Lit search

  21. SEC China010821BJ-Toshiba DALIAN TOSHIBA’S MARKET POSITION IN CHINA’S CONVENTIONAL CRT TV MARKET: NO. 5 MARKET SHARE LEADER • Market share by sales, % • 100% • 100% • Key trends • Rationale Others Rowa 1.9 2.0 LG • Top five players in the market –Changhong, TCl, Konka, Hisense, Skyworth,controlled 41.6% of the market in 1999 grew to 43.7% in 2000 • Local players increased market share from 65% in 1999 to ~67% in 2000 Panda • Industry undergoes further consolidation • Foreign players lose market share to local players Jinxing Skyworth-RGB Xoceco Philips Haier Panasonic Hisense Toshiba TCL Changhong Konka Sony 1999 2000 • Source: GFK, Team Analysis, External interviews: Konka, Sony, Toshiba

  22. SEC China010821BJ-Toshiba DALIAN TOSHIBA’S MARKET POSITION IN CHINA’S PJTV MARKET: NO. 1 MARKET SHARE LEADER • Market share by sales • Percent • Key trends • Rationale • Established MNCs, Toshiba, Sony will continue to dominate market • Local players start establishing themselves by 2005 • High-end producers with superior technology in pixel resolution and brightness • Local players expected to acquire key PJTV technologies as of 2003 • As comparison, Changhong alone now controls ~ 20% of large screen CRTV market, local players likely to gain similar share in PJTV market • Local (Konka • Changhong, etc) 100% • 100% • Other MNCs • Hitachi • Panasonic • Samsung • Sony • Toshiba • 1999 • 2000 • Source: GFK, internal interview, literature search, external interviews: Sony, Panasonic, Toshiba

  23. SEC China010821BJ-Toshiba PJTV PLAYERS’ STRENGTHS AND WEAKNESSES • Company • Strengths/weaknesses • Toshiba • Strong brand name • Aggressive sales and marketing • Sony • No. 1 brand name • Premium market with highest industry profits • Samsung • Strong quality in resolution and brightness • Solid position in the market • Comparable technology with Japanese counterparts • Other MNCs: Panasonic, Philips, etc. • Possess the technology, but yet to establish themselves in market • Local companies: TCL, Konka, Hinsense, Haier, Changhong • Lack the key technologies for PJTV components – tubes and screen • Low-end brand have resulted in low sales volume • Will fill up the technology gap by about 2003 • Source: Lit search, Team analysis

  24. SEC China010821BJ-Toshiba TOSHIBA HAS A FULL-LINE PROUCT OFFERING IN NOTEBOOK, COVERING LOW-END TO PREMIUM SEGMENT • Key product offerings • Satellite Series 2800 (13.3", 14.1", 15.0") • Portege Series (7220CT, 3480CT, 3490CT) • Tecra Series (8100H, 8000J, 8200) • Satellite 1750 (13.3") • New satellite 2800 (13.3", 14.1",15.0") • Satellite Pro 4600 (13.3", 14.1", 15.0") • New Satellite Pro 4600 (14.1") • Satellite 3000 (13.3") • Source: Literature research • Source: literature research

  25. SEC China010821BJ-Toshiba TOSHIBA IS STRONG IN EDUCATION, LARGE AND MEDIUM BUSINESS, BUT PARTICULARLY WEAK IN GOVERNMENT • Sales by customer segments • Percent of units shipment (000s), 2000 • 100% = • 73 • 484 • Small office • 3.8 • 3.5 • 3.7 • Home • Education • Small business • Large business • Medium business • Government • Toshiba • Market average • Source: IDC

  26. SEC China010821BJ-Toshiba TOSHIBA IS GENERALLY A MEDIUM TO HIGH-END PLAYER, PARTICULARLY STRONG IN USD 2.5-3.5K PRICE BRAND • Sales by customer segments • Percent of units shipment (M), 2000 • Toshiba's market share • 100% = • 0.11 • 0.12 • 0.17 • 0.08 • Others • 0.1 • 0.1 • 1.4 • Founder • Dell • 3.5 • 0.7 • Acer • 2.2 • Toshiba • IBM • 0.9 • Legend • Low(0-2k) • Medium (2-2.5k) • High (2.5-3.5k) • Premium (>3.5K) • Source: IDC

  27. SEC China010821BJ-Toshiba VALUE CHAIN STRATEGY • 1. Background information • 4. Value chain strategy • Location • Registered capital • Managementteam • Equitystructure • Focus on • Marketing, advertising and promotion • Distribution (channel and sales force) • Starting year • Number of employees • Era analysis • 2. Strategy • 5. Organization and ownership • Mission • Vision • Corporate strategy • Organization structure • Ownership structure • 3. Product/market • 6. Financial performance • Key product offerings • Market position • Sales • Profit

  28. R&D • Manufacturing • Marketing • & Sales • Distribution • After-Sales • Services SEC China010821BJ-Toshiba TOSHIBA CHINA TV BUSINESS HAS A PRODUCT LINE ORIENTED VALUE DELIVERY SYSTEM Digital Media Network Co. Dalian Toshiba TV Co. • Digital media • Toshiba Digital Media Network Company is responsible for Color TV R&D • Dalian Toshiba and its 4 subsidiaries in Dalian, Beijing, Shanghai and Guangzhou are responsible for marketing and sales • Dalian Toshiba is responsible for TV production. 30% parts come from China • Dalian Toshiba primarily uses sales forces in its four subsidiaries to sell TV products directly to retailers. It also uses distributors in certain regions such as Chongqing. • Toshiba (China) helped set up the after-sales service network, and Dalian Toshiba is running the network and responsible for PNL. • Source: Literature Search, Konka web site, team analysis

  29. SEC China010821BJ-Toshiba DALIAN TOSHIBA’S TV DISTRIBUTION CHANNEL • Dalian Toshiba TV Co. • Manufacturing Plant • Consumers • Retailers: • Hyper/super-market: 10% • Designated Stores: 25% • Dept. Stores: 30% • Specialty Stores: 35% • Dalian Subsidiary • Beijing Subsidiary • Shanghai Subsidiary • Guangzhou Subsidiary • 70% • Subsidiary Sales Force • 30% • Distributors • Source: Team Literature Search, external interviews, Team analysis

  30. R&D • Manufacturing • Marketing and branding • Sales and distribution • After-sales service SEC China010821BJ-Toshiba TOSHIBA ADOPTS THE NATIONAL CHIEF-DISTRIBUTOR PRACTICE IN NOTEBOOK BUSNIESS IN CHINA • OEM • Digital China • Toshiba • Toshiba • Dealers • Toshiba SH • Toshiba SH • Toshiba R&D • Toshiba SH • OEM: Renbao, a Taiwanese OEM player • Digital China • Digital China (for Toshiba notebook only) • Toshiba • Digital China • Centralize key accounts across different products • Centralize SI for key accounts (banking, tax) • Be in charge of channel develop-ment and management • Digital China • Major responsibility • Toshiba SH factory • Parts' inventory • Ancillary hotline • Source: interview

  31. SEC China010821BJ-Toshiba TOSHIBA HAS POSITIONED CHINA AS A KEY R&D BASE • R&D • Three-layer structure of Toshiba R&D • First layer focusing on technology trends in the next 3-5 years • Second layer focusing on multi-media technology and technology trends in the next 2-3 years • Third layer focusing on product development • Toshiba R&D in China • Established "R&D department" in Beijing, April 2001 • Plan to develop it into "Toshiba (China) R&D center” in October 2001 which will be the third overseas R&D center of Toshiba • Plan to have 250 people this year and expand to 500 people in R&D center in 2005 • * The other two R&D centers are in the UK and the US respectively • Source: Literature research

  32. Digital China • Customization for big-batch order according to customers' individualized demand for hardware configuration SEC China010821BJ-Toshiba TOSHIBA HAS OUTSOURCED THE MAJOR PART OF NOTEBOOK MANU-FACTURING AND ITS DISTRIBUTOR IS CAPABLE OF CUSTOMIZATION IN CONFIGURATION • Manufacturing • Parties involved • Responsibilities • Toshiba SH • Assembling production to cover total volume sold in China • Assembling production for expert • OEM (Renbao) • Major part of notebook manufacturing • Source: Literature research, interview

  33. SEC China010821BJ-Toshiba UNDER STRONG COST PRESSURE, DIGITAL CHINA AND TOSHIBA ARE PUSHING TOWARDS MORE FLATTENED CHANNEL STRUCTURE • Channel strategy • Pay sufficient attention to fast-growing customer segments, such as education and home, as well as major segments, such as government and business • Expand into 2nd-tier geographies and enhance channel • Channel Structure • Channel Cost • Percent of retail price • Digital China • >> 10 • Industry distributors • Core distributors (~ 50) • Specialty shops (over 100) • Direct • >10 • 8-10 • 5-8 • Second tier dealers (hundreds) • End users • Before 1997 • 1997-1998 • 1999-2001 • Future expecta-tion of manu-facturers • Source: CCID, interview

  34. Key initiative • Build up a nation-wide logistics system • Total investment • RMB 65 million • Three-tier structure • 3 first-tier centers in Beijing, Shanghai and Guangzhou • 7 second-tier centers • Third-tier components • Detailed practice • Providers deliver to three first-tier centers • Inventory is distributed among all the three tiers with inventory cycle shortening from first tier to the third • SCM management is through IT network SEC China010821BJ-Toshiba DIGITAL CHINA IS BUILDING UP AN ADVANCED NATION-WIDE DISTRIBUTION NETWORK TO FURTHER CUT DOWN COST • Distribution • Source: Literature research, interview

  35. SEC China010821BJ-Toshiba DESPITE CONTINUOUS IMPROVEMENT, TOSHIBA NOTEBOOK’S CUSTOMER SERVICE STILL LAGS BEHIND IN CERTAIN ASPECTS • Customer service • VIP certificate For A-class customers, Toshiba notebook guarantee includes response within 10 hours, and repair finished within 20 hours, otherwise offering a backup notebook • On-site service On-site service is offered in Beijing, Shanghai, and Guangzhou • Dell and Acer offer 4-hour response commitment • Dell offers on-site service in major cities in China Major initiatives Competitor’s offerings • * Footnote • Source: Source • Source: Literature research, interview

  36. SEC China010821BJ-Toshiba ORGANIZATION AND OWNERSHIP • 1. Background information • 4. Value chain strategy • Location • Registered capital • Managementteam • Equitystructure • Focus on • Marketing, advertising and promotion • Distribution (channel and sales force) • Starting year • Number of employees • Era analysis • 2. Strategy • 5. Organization and ownership • Mission • Vision • Corporate strategy • Market position • Organization structure • Ownership structure • 3. Product /market • 6. Financial performance • Key product offerings • Sales • Profit

  37. SEC China010821BJ-Toshiba TOSHIBA’S CORPORATE STRUCTURE Foreign Country Japan iValue Creation Company Other JV e-Solutions Company Corporate project Social Infrastructure Systems Company Statutory Auditors Dalian Toshiba TV, Ltd Digital Media Network Company Corporate staff Board of Directors Mobile Communications Company Power Systems & Services Company President & CEO Semiconductor Company Display Devices & Components Company Other Subsidiaries Corporate support services Medical Systems Company Home Appliances Company Foreign Country Japan • Source: Lit search, team analysis

  38. SEC China010821BJ-Toshiba TOSHIBA’S MAJOR SHAREHOLDERS • (As of September 30,2000) • Entity • Percent Outstanding • The Dai – ichi Mutual Life Insurance Company • 3.94% • 3.88% • The Sakura Bank,Ltd. • 3.36% • Nippon Life Insurance Company • 2.55% • State Street Bank and Trust Company • The Chase Manhattan Bank NA London • 2.28% • The Sumitomo Trust and Banking Co.,Ltd. • 2.27% • Mitsui Mutual Life Insurance Company • 1.88% • Employees Stock Ownership Plan • 1.68% • The Mitsubishi Trust and Banking Corporation • 1.65% • The Nippon Fire & Marine Insurance Co.,Ltd. • 1.55% • Source: Toshiba website

  39. SEC China010821BJ-Toshiba TOSHIBA HEADQUARTER HOLDS THE MAJORITY OF ITS NOTEBOOK MANUFACTURING JV IN CHINA • Ownership structure • Toshiba • Toshiba China Co., Ltd • Shanghai Jinqiao • 80% • 10% • 10% • Toshiba Computer (Shanghai) Co., Ltd • Source: Literature research

  40. SEC China010821BJ-Toshiba FINANCIAL PERFORMANCE • 1. Background information • 4. Value chain strategy • Location • Registered capital • Managementteam • Equitystructure • Focus on • Marketing, advertising and promotion • Distribution (channel and sales force) • Starting year • Number of employees • Era analysis • 2. Strategy • 5. Organization and ownership • Mission • Vision • Corporate strategy • Market position • Organization structure • Ownership structure • 3. Product/market • 6. Financial performance • Key product offerings • Sales • Profit

  41. SEC China010821BJ-Toshiba TOSHIBA’S OVERSEAS SALES AND R&D EXPENDITURES • R & D Expenditures • Percentage of Net Sales • Overseas Sales • (￥billion) • R&D Expenditures • (￥billion) CAGR= 4.7% ￥2,235 ￥344 ￥2,116 ￥2,040 2,000 320 ￥323 ￥317 1,500 240 1,000 160 5.9％ 6.0％ 5.8％ 500 80 0 0 1998 1999 2000 1998 1999 2000 • Source: Toshiba 2001 Annual Report, Lit search

  42. SEC China010821BJ-Toshiba TOSHIBA’S HISTORICAL REVENUES AND PROFITS • Yen billion • Net Sales • Net Income • CAGR = 9.4% • CAGR = 1.9% • * • 1999 • 1998 • 1997 • 1999 • 2000 • 1998 • 2001 • 1997 • 2000 • 2001 • Source: Toshiba 2001 Annual Report, Lit search

  43. SEC China010821BJ-Toshiba IN 2000, DALIAN TOSHIBA’S UNIT SALES IN CHINA WAS 7% OF CHANGHONG’S UNIT SALES, BUT DALIAN TOSHIBA’S GROSS PROFIT IN CHINA WAS 89% OF CHANGHONG’S GROSS PROFIT • Unit Sales • thousand • Gross Profit • billion RMB • Changhong • Dalian Toshiba • Dalian Toshiba • Changhong • Source: 21st Century Economic report, March 19, 2001

  44. SEC China010821BJ-Toshiba DESPITE OF STRONG GROWTH OF TOTAL MARKET, TOSHIBA NOTEBOOK HAS EXPERIENCED STAGNANT GROWTH OF 4.4% ANNUALLY • Notebook revenue (RMB billions) • Total China market • Toshiba in China • 98-00 CAGR Percent • 98-00 CAGR Percent • 10.6 • 48.6 • 4.4 • 1.7 • 1.6 • 1.5 • 6.1 • 4.8 • 1998 • 1999 • 2000 • 1998 • 1999 • 2000 • Source: IDC

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