SEC China010821BJ-Toshiba
CONFIDENTIAL
Brown Goods and PC
Competitor Analysis:
Toshiba
SAMSUNG ELECTRONICS CHINA
(SEC China)
August 20, 2001
This report is solely for the use of client personnel. No part of it may be
circulated, quoted, or reproduced for distribution outside the client
organization without prior written approval from McKinsey & Company.
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presentation; it is not a complete record of the discussion.
SEC China010821BJ-Toshiba
OVERVIEW OF COMPETITOR ANALYSIS FRAMEWORK
1. Background information
4. Value chain strategy
• Location
• Registered
Focus on
• Marketing,
advertising and
promotion
• Distribution (channel
and sales force)
• Starting year
• Number of
capital
employees
• Management • Era analysis
team
• Equity
structure
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
1
SEC China010821BJ-Toshiba
BACKGROUND INFORMATION
1. Background information
4. Value chain strategy
• Location
• Registered
• Focus on
• Starting year
• Number of
capital
employees
• Management • Era analysis
team
• Equity
– Marketing,
advertising and
promotion
– Distribution (channel
and sales force)
structure
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
2
SEC China010821BJ-Toshiba
BACKGROUND INFORMATION – TOSHIBA
(As of September 30, 2000)
Established:
1875 by Hisashige Tanaka
President & CEO:
Tadashi Okamura
Total Assets:
US$51,578 million
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
3
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
• Dalian Daxian (Group) Co., Ltd.
Domestic Juristic Person's Shares
Source: Company website, Lit search
4
SEC China010821BJ-Toshiba
TOSHIBA’S CORPORATE MANAGEMENT TEAM
Corporate project
iValue Creation Company CEO:
Tsutomu Kawada
e-Solutions Company CEO:
Hiroo Okuhara
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
President & CEO
Tadashi Okamura
Semiconductor Company CEO:
Takeshi Nakagawa
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
5
SEC China010821BJ-Toshiba
HISTORY OF TOSHIBA
Source: Company website, Literature Search
6
SEC China010821BJ-Toshiba
TOSHIBA’S DEVELOPMENT WENT THROUGH THREE STAGES
1875-1939
Business Building
1939-1978
Becoming Industry
Leader
1978- PRESENT
Meeting worldwide
competition
Organization
structure
• Two Japanese
electrical equipment
manufacturers
merged in 1939 to
create Toshiba.
• The company grew
rapidly and became a
market leader in the
electrical and electronic
industry. However, the
organization became
more bureaucratic.
• 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.
Corporate
strategy
• Technological
innovation accounted
for the companies’
successes. One of
the founders was the
so-called Edison of
Japan.
• 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 .
• IT focus, diversification,
innovation and globalization
are four key elements of
Toshiba’s corporate strategy.
• Numerous leading
products in the electrical
and electronics areas.
Examples includes
Japan’s first vacuum
cleaner, first fluorescent
lamp, first radar, etc.
• Toshiba is intensively focusing
on IT-related business (i.e.
telecom and internet),
meanwhile, leveraging its
legacy businesses to generate
stable income
Product
Development • Main products
& Technology included
transformers, electric
motors, light bulbs,
radio receivers, and
cathode-ray tubes.
Source: Literature Search; McKinsey Analysis
7
SEC China010821BJ-Toshiba
DEVELOPMENT OF DALIAN TOSHIBA’S TV BUSINESS IN CHINA
1996-1997
Business Building
1998-2000
Establishing
Leadership in PJTV
Market
2001
Becoming Toshiba’s Key
Global TV Production
Base
Key initiative
• Founded as a joint
venture in 1996,
construction was
completed in 1997.
• Conducted accurate
market forecast and
implemented just in
order inventory
management.
• Focused on high profit
margin PJTV segment,
and competed on
technology, service and
management rather than
price.
• Strengthened customer
service
• 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
Key results
• Inventory turn-over
less than two days.
• Made profit the next
year.
• Revenue and profit grew
50% annually. Became
the No. 1 market share
leader in PJTV segment.
• exported 800,000 units to
Japan.
Source:Literature Search; McKinsey Analysis
8
SEC China010821BJ-Toshiba
TOSHIBA WILL FURTHER INVEST IN IT INDUSTRY IN CHINA
Background information
•
•
•
•
•
Invested companies in China
23
Total investment
RMB 6 billion
Chief representative
Pintianxinzheng (pinyin)
Total number of employees
over 10,000
Importance of China
“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
• Future investment plan
"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
Source:
Source: literature
Literatureresearch,
research,interview
interview
9
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
Introduced the first notebook in the world
1990
Introduced STN notebook
1993
Introduced color TFT notebook
1994
Introduced Pentium-empowered notebook
1999
Ranked number one in China notebook market for 4 years
2000
Ranked number one in world wide notebook market for 7 years
Source: literature research, interview
10
SEC China010821BJ-Toshiba
STRATEGY
1. Background information
4. Value chain strategy
• Location
• Registered
• Focus on
capital
• Starting year
• Number of
employees
• Management • Era analysis
team
• Equity
– Marketing,
advertising and
promotion
– Distribution (channel
and sales force)
structure
2. Strategy
5. Organization and ownership
•
•
•
•
• Organization structure
• Ownership structure
Mission
Vision
Corporate strategy
Market position
3. Product /market
6. Financial performance
• Key product offerings
• Sales
• Profit
11
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.
12
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
Champion market-centric
management
• Customer Relationship
Management and Supply
Chain Management
systems will be deployed
to cover company-wide
operations.
Toshiba as a
leading-edge,
internet-ready
global leader in
hi-tech
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
13
SEC China010821BJ-Toshiba
ASSESSMENT OF TOSHIBA'S CURRENT STRATEGIC POSITION – SWOT
Strengths
• Broad and diversified
product portfolio
• Strong presence in Asia
• Strong R&D and
manufacturing capabilities
Weaknesses
• Less customer focused
• Weak brand name in cuttingedge information technologies
• Unbalanced global presence
Opportunities
Threats
• Bureaucratic management
style
• Its core semiconductor
business is a cyclical
commodity business
• Behind the curve in key IT
developments
• Global digital convergence
• Emerging technologies,
•
i.e., Internet, 3G
China joining WTO opens
doors to foreign companies
14
SEC China010821BJ-Toshiba
THERE ARE TWO SUCCESSFUL MODELS IN THE CHINA CTV MARKET,
DALIAN TOSHIBA FOLLOWS THE SONY MODEL
The Konka 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
The Sony Model
• 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, McKinsey analysis
15
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
• Product itself
1997
• Channel development
1998
• Application
1999
• 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 chiefdistributor in China
Source: literature research, interview
16
SEC China010821BJ-Toshiba
PRODUCT/MARKET
1. Background information
4. Value chain strategy
• Location
• Registered
• Focus on
capital
• Starting year
• Number of
employees
• Management • Era analysis
team
• Equity
– Marketing,
advertising and
promotion
– Distribution (channel
and sales force)
structure
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
17
SEC China010821BJ-Toshiba
TOSHIBA’S GLOBAL NET SALES BY BUSINESS SEGMENT
Yea 2000 (¥ billion)
Others
¥473
Home
Appliances
¥660
Information &
Communications &
Industrial Systems
¥1,858
7%
10%
28%
Electronic
Devices &
Components
¥1,477
23%
23%
9%
Power Systems
¥571
Digital Media
¥1,518
Source: Toshiba web site, Lit Search
18
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
19
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%
Others
Rowa
LG
Panda
Jinxing
Skyworth-RGB
Xoceco
Philips
Haier
Panasonic
Hisense
Toshiba
1.9
6.3%
2.0
2.2
3.0
4.0
4.2
4.2
6.6
100%
6.4
2.0
7.0
2.4
2.2
3.3
4.6
3.9
4.9
5.0
5.7
7.0
7.3
7.4
7.5
TCL
9.6
9.3
Changhong
9.7
11.7
Konka
11.2
10.9
Sony
13.7
13.0
1999
2000
Key trends
Rationale
• Industry
• Top five players in the
undergoes
further
consolidation
• Foreign
players lose
market share
to local
players
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
Source: GFK, McKinsey Analysis, External interviews: Konka, Sony, Toshiba
20
SEC China010821BJ-Toshiba
DALIAN TOSHIBA’S MARKET POSITION IN CHINA’S PJTV MARKET: NO. 1
MARKET SHARE LEADER
Market share by sales
Percent
Local (Konka
Changhong, etc)
Other MNCs
Hitachi
Panasonic
Samsung
100%
100%
~4
~5
1
15
~3
~3
6
7
10
14
Key trends
• Established MNCs,
Toshiba, Sony will
continue to dominate
market
Rationale
• High-end producers with
superior technology in
pixel resolution and
brightness
• Local players start
• Local players expected
establishing
themselves by 2005
to acquire key PJTV
technologies as of 2003
• As comparison,
Sony
33
32
35
32
1999
2000
Toshiba
Changhong alone now
controls ~ 20% of large
screen CRTV market,
local players likely to
gain similar share in
PJTV market
Source: GFK, internal interview, literature search, external interviews: Sony, Panasonic, Toshiba
21
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, McKinsey analysis
22
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:
Source: literature
Literatureresearch
research
23
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% =
Small office
Home
Education
Small business
Large business
73
484
3.8
5.5
8.4
3.5
3.7
4.8
10.9
8.4
22.2
27.4
23.5
Medium
business
28.8
31.4
Government
17.8
Toshiba
Source: IDC
Market average
24
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
100% =
0.11
Others
Founder
Dell
Acer
Toshiba
IBM
Toshiba's
market share
0.12
20.2
26.6 0.1
2.2
9.2
24.2
1.4
17.9
0.7
0.17
6.6
3.5
16.1
13.9
0.08
12.2
0.1
9.8
3.8
7.1
10.4
0.9
13.3
48.8
24.5
56.5
11.1
13.5
22.7
Legend
Low
(0-2k)
Source: IDC
Medium
(2-2.5k)
12.1
10.4
High
(2.5-3.5k)
Premium
(>3.5K)
25
SEC China010821BJ-Toshiba
VALUE CHAIN STRATEGY
1. Background information
4. Value chain strategy
• Location
• Registered
• Focus on
• Starting year
• Number of
capital
employees
• Management • Era analysis
team
• Equity
– Marketing,
advertising and
promotion
– Distribution (channel
and sales force)
structure
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
26
SEC China010821BJ-Toshiba
TOSHIBA CHINA TV BUSINESS HAS A PRODUCT LINE ORIENTED VALUE
DELIVERY SYSTEM
R&D
Marketing
& Sales
Manufacturing
Digital
Digital media
Media
Network Co.
• Toshiba Digital
Media Network
Company is
responsible for
Color TV R&D
Distribution
After-Sales
Services
Dalian Toshiba TV Co.
•Dalian Toshiba is
•Dalian Toshiba and its
4 subsidiaries in Dalian,
responsible for TV
production. 30% parts Beijing, Shanghai and
Guangzhou are
come from China
responsible for
marketing and sales
•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
27
SEC China010821BJ-Toshiba
DALIAN TOSHIBA’S TV DISTRIBUTION CHANNEL
Dalian Toshiba TV Co.
Manufacturing Plant
Retailers:
Hyper/supermarket: 10%
70%
Dalian Subsidiary
Beijing Subsidiary
Shanghai Subsidiary
Guangzhou Subsidiary
Subsidiary
Sales Force
30%
Distributors
Designated
Stores: 25%
Consumers
Dept. Stores:
30%
Specialty
Stores: 35%
Source: McKinsey Literature Search, external interviews, McKinsey analysis
28
SEC China010821BJ-Toshiba
TOSHIBA ADOPTS THE NATIONAL CHIEF-DISTRIBUTOR PRACTICE IN
NOTEBOOK BUSNIESS IN CHINA
R&D
Toshiba
Manufacturing
OEM
Toshiba SH
• Toshiba R&D
• Toshiba SH
• OEM: Renbao,
a Taiwanese
OEM player
• Digital China
Source: interview
Marketing and
branding
Toshiba
• Digital China
(for Toshiba
notebook only)
• Toshiba
Sales and
distribution
Digital
China
Dealers
• Digital China
After-sales
service
Toshiba SH
• Digital China
– Centralize key
– Major
accounts across
responsibility
different products
• Toshiba SH
– Centralize SI for
factory
key accounts
– Parts' inventory
(banking, tax)
– Ancillary hotline
– Be in charge of
channel development and
management
29
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
*
Source:
The other two R&D centers are in the UK and the US respectively
Literature research
30
SEC China010821BJ-Toshiba
TOSHIBA HAS OUTSOURCED THE MAJOR PART OF NOTEBOOK MANUFACTURING 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
Digital China
• Customization for big-batch order according to
customers' individualized demand for hardware
configuration
Source:
Literature research, interview
31
SEC China010821BJ-Toshiba
UNDER STRONG COST PRESSURE, DIGITAL CHINA AND TOSHIBA ARE
PUSHING TOWARDS MORE FLATTENED CHANNEL STRUCTURE
• Pay sufficient attention to fast-growing customer segments, such as
Channel strategy
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
Direct
Core distributors
(~ 50)
Specialty shops
(over 100)
Industry
distributors
>10
8-10
5-8
Second tier
dealers
(hundreds)
End users
Source: CCID, interview
Before
1997
19971998
19992001
Future
expectation of
manufacturers
32
SEC China010821BJ-Toshiba
DIGITAL CHINA IS BUILDING UP AN ADVANCED NATION-WIDE
DISTRIBUTION NETWORK TO FURTHER CUT DOWN COST
Distribution
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
Source:
Literature research, interview
33
SEC China010821BJ-Toshiba
DESPITE CONTINUOUS IMPROVEMENT, TOSHIBA NOTEBOOK’S
CUSTOMER SERVICE STILL LAGS BEHIND IN CERTAIN ASPECTS
Customer service
Major
initiatives
• 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
Competitor’s
offerings
* Footnote
Source: Literature
Source research, interview
Source:
• Dell and Acer offer 4-hour response commitment
• Dell offers on-site service in major cities in China
34
SEC China010821BJ-Toshiba
ORGANIZATION AND OWNERSHIP
1. Background information
4. Value chain strategy
• Location
• Registered
• Focus on
capital
• Starting year
• Number of
employees
• Management • Era analysis
team
• Equity
– Marketing,
advertising and
promotion
– Distribution (channel
and sales force)
structure
2. Strategy
5. Organization and ownership
•
•
•
•
• Organization structure
• Ownership structure
Mission
Vision
Corporate strategy
Market position
3. Product /market
6. Financial performance
• Key product offerings
• Sales
• Profit
35
SEC China010821BJ-Toshiba
TOSHIBA’S CORPORATE STRUCTURE
Japan
Foreign Country
iValue Creation
Company
Corporate project
e-Solutions Company
Other JV
Social Infrastructure
Systems Company
Statutory Auditors
Corporate staff
Board of Directors
Digital Media
Network Company
Dalian Toshiba
TV, Ltd
Mobile Communications
Company
Power Systems &
Services Company
President & CEO
Semiconductor
Company
Display Devices &
Components Company
Corporate support
services
Source: Lit search, team analysis
Medical Systems
Company
Home Appliances
Company
Japan
Other
Subsidiaries
Foreign Country
36
SEC China010821BJ-Toshiba
TOSHIBA’S MAJOR SHAREHOLDERS
(As of September 30,2000)
Entity
Percent Outstanding
The Dai – ichi Mutual Life Insurance Company
3.94%
The Sakura Bank,Ltd.
3.88%
Nippon Life Insurance Company
3.36%
State Street Bank and Trust Company
2.55%
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
37
SEC China010821BJ-Toshiba
TOSHIBA HEADQUARTER HOLDS THE MAJORITY OF ITS NOTEBOOK
MANUFACTURING JV IN CHINA
Ownership structure
Toshiba
Toshiba China Co., Ltd
80%
10%
Shanghai Jinqiao
10%
Toshiba Computer (Shanghai) Co., Ltd
Source: Literature research
38
SEC China010821BJ-Toshiba
FINANCIAL PERFORMANCE
1. Background information
4. Value chain strategy
• Location
• Registered
• Focus on
• Starting year
• Number of
capital
employees
• Management • Era analysis
team
• Equity
– Marketing,
advertising and
promotion
– Distribution (channel
and sales force)
structure
2. Strategy
5. Organization and ownership
•
•
•
•
• Organization structure
• Ownership structure
Mission
Vision
Corporate strategy
Market position
3. Product/market
6. Financial performance
• Key product offerings
• Sales
• Profit
39
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%
2,000
￥2,040
￥2,235
￥2,116
￥344
320
1,500
240
1,000
160
￥323
5.9％
500
80
0
0
1998
1999
2000
￥317
6.0％
1998
1999
5.8％
2000
Source: Toshiba 2001 Annual Report, Lit search
40
SEC China010821BJ-Toshiba
TOSHIBA’S HISTORICAL REVENUES AND PROFITS
Yen billion
Net Sales
Net Income
CAGR = 9.4%
CAGR = 1.9%
96
67
*
5,522
1997
5,458
1998
5,301
1999
5,749
2000
15
5,951
2001
1997
1998
-9
-33
1999
2000
2001
Source: Toshiba 2001 Annual Report, Lit search
41
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
7,500
1.0
1.1
500
Dalian Toshiba
Changhong
Dalian Toshiba
Changhong
Source: 21st Century Economic report, March 19, 2001
42
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
10.6
98-00 CAGR
Percent
98-00 CAGR
Percent
48.6
4.4
1.6
6.1
1.7
1.5
4.8
1998
Source: IDC
1999
2000
1998
1999
2000
43