ABA Asia Trip 2006
December 26, 2005
Tepper School of Business
Asian Business Association
Asia Trip 2006
Objective:
1. “Introduce” and “Experience” Chinese and Japanese culture
2. Visit several leading Asian organizations
3. Meet with Tepper Asian alumnae
Dates:
Budget:
Winter Break, January 3 – 14, 2006
$2,500 for air, hotel and food (estimate) per person
Contact Information:
Robert Early
rearly@andrew.cmu.edu
Christine Lee
chunghsl@andrew.cmu.edu
886-958215791 (Taiwanese phone that works in China)
Yori Yamashita yyamashit@andrew.cmu.edu
81-90-4934-6831 (Japanese mobile phone)
Hotels
Beijing
王府井大酒店 Wangfujing Grand Hotel
Address: 北京王府井大街 57 号 / 57 Wangfujing Avenue, Beijing 100006
TEL: 86-10-65221188
1/4 (Wednesday night) through 1/10 (Tuesday morning)
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Bohai
秦皇島長城酒店 Great Wall Hotel ← as recommended by Alcoa
Address: 秦皇島燕山大街 202 號 / 202 Yanshan Dajie, Qinhuangdao, China, 066001
Tel: 86-335-3061666
1/6 (Friday night) to 1/7 (Saturday morning)
Tokyo
Shinagawa Prince Hotel
TEL: 81-3-3440-1111
1/10 (Tuesday night) through 1/14 (Saturday morning)
Location: 2 minute walk from Shinagawa Station (on Yamanote Line)
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December 26, 2005
Transportation
Beijing Arrival
Please take metered taxis from airport. Passengers should have the destination written in
Chinese or indicated on a map (this document has a map so no worry).
Taxis are available on the lower level just outside the Arrivals area. When arriving at the
airport, AVOID drivers who approach you in the terminal or outside the terminal as these
are almost always price-gougers, who will ask triple or more the actual price. There is a
taxi line just outside the terminal. Drivers should use their meter; make sure that the driver
puts down the flag, as some drivers will say they forgot and ask for a ridiculous amount of
money.
The cost to your hotel is around RMB100 or less, plus RMB15 for the highway toll. There
is no need to tip taxi drivers in Beijing. Or total less than RMB 120, or US$15.
Inside China
We are renting a mini-bus for most travel. Also, Alcoa will be sponsoring our trip from
Beijing to Bohai (about 3.5h one-way)! Make sure to say thanks!
Beijing Departure
Travel by group by a “fleet” of taxis
Tokyo Arrival
Travel by group by train. Take Keisei Limited Express from Narita to Nippori (75
minutes). Transfer to JR Yamanote Line and ride to Shinagawa (20 minutes).
Inside Japan
We will use subways and trains. Make sure you have pocket money (¥¥).
Tokyo Departure
Travel by small group by train. Reverse as above.
Budget
Please bring $500 in cash. We will use this in China. Also, exchange about $50 at the
airport for the first day. In Japan, American style ATMs are available. Be prepared to pay
for the hotel with a credit card and have around $400 in the ATM for withdrawal.
Item
Hotel Beijing & Bohai
Transportation in China
Food-China
Misc-China
Hotels-Japan
Food-Japan
Misc
Total
Card Cost
$400
$400
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Cash Cost
$250
$50
$100
$100
$300
$100
$900
ABA Asia Trip 2006
December 26, 2005
Bring more cash if you would like to buy lots of stuff!
Other Issues
China
See map at end.
Temperature:
In January, the temperature in Beijing city is normally around -5 to -10 (Celsius) or
14 to 23 (Fahrenheit). I think it is a little bit lower than what we have in Pittsburgh,
which is around 26 (Fahrenheit).
Some visitors feel it is dryer in Beijing. So you may want to bring some skin
protection products and chap-sticks.
Food:
I marked two different places (Da Dong Roast Duck, 大董烤鸭店 and Quan Ju De
Roast Duck, 全聚德烤鸭店) where you can have Beijing Roast Duck. I feel “Da Dong”
is better in terms of the taste, but “Quan Jun De” is more famous among foreigners.
Other than roast, you can easily find any kind of Chinese food restaurants in the city.
You can also find some American or European restaurants at “Oriental Plaza, 东方广
场”-marked in the map, which is walking distance from your hotel.
http://www.beijingtraveltips.com/shopping/wang_fu_jing/wangfujing.htm
Hotel:
I marked the location of your hotel (Wang Fu Jing Grand Hotel,王府井大酒店). It is
in the traditional shopping area. There are many restaurants and shopping centers
within walking distance. I believe you can get a map from the hotel front desk.
Transportation:
Other than the van you will rent for some regular trips, you may probably take Taxi:
 Make sure the drivers start charging meters after you get on the car.
 Ask for RECEIPTs (Fa Piao, 发票) after you pay the charges. There is detailed
information about the Taxi on the receipt. You can easily find out which
company the Taxi belongs to in case you forget anything in the Taxi.
 Normally there are no tips, but drivers would be happy if you tip them.
One thing Christine has mentioned is about the trip from Airport to hotel. I am not
sure if the administrations has regulate it or not, but a better way to avoid the
problem is to wait in line. There are directions at the exits of the airport.
Shopping:
Considering Christine’s strong interests in doing research on a popular business
issue (Counterfeit for Christmas, Gift Givers Tap New Source As Travel to China
Eases,
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December 26, 2005
Knockoff Quality Improves, By MEI FONG, Staff Reporter of THE WALL STREET
JOURNAL, December 9, 2005; Page B1), I marked twp popular markets on the map
(Xiu Shui Market, 秀水市场 and Hong Qiao Market, 红桥市场).
The old Xiu Shui (a.k.a, silk street) was removed. The one I marked is the place most
old vendors move to. The other Xiu Shui is in a more modernized building:
http://www.beijingtraveltips.com/shopping/xiu_shui/xiushui.htm.
Hong Qiao attracted lots of foreign celebrities such as Bill Clinton and Margaret
Thatcher. There are also more categories of goods here.
http://www.beijingtraveltips.com/shopping/hong_qiao/hongqiao.htm
Entertainments:
I think Christine has a tight schedule for you. Other than that, you can find some
places to go at Oriental Plaza. I marketed two popular bar areas (Houhai, 后海 and
San Li Tun, 三里屯) on the map too. If the temperature is low enough, there will be
an “Ice Lights festival” in BeiHai Park, which might worth of a visit.
Others:
Currencies exchange – Normally, it costs more to exchange RMB at airport and hotel
than in local banks. You can check the spot exchange rate and see if you can accept
the rate.
Toilets
There is no toilet paper in public restrooms in China. So bring some tissues!
Electricity
Electricity in China is 220V, 50 cycles, AC. Two-pin sockets and some three-pin sockets
are in use. Most of the hotels have a socket in the bathroom for both 110V and 220V.
However, outside of the bathroom, only 220V sockets are provided. Although an adapter
may be borrowed from the hotel, it is recommended you bring your own adapter plug.
For more, check out TravelChinaGuide.com and Explore Japan
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December 26, 2005
Schedule
3-Jan
4-Jan
5-Jan
Tue
Wed
Thu
6-Jan
7-Jan
Fri
Sat
Daytime:
Daytime:
Morning:
Afternoon:
All Day:
All Day:
8-Jan
Sun
Morning:
Mon
Afternoon:
Morning:
9-Jan
10-Jan
Tue
11-Jan
Wed
12-Jan
Thu
13-Jan
Fri
14-Jan
Sat
Depart Pittsburgh
Arrive in Beijing
Lenovo
Pepsi Co.
Alcoa
Lots of tourist travel
including the start of the
Great Wall of China
Tourism in Beijing:
Lots of stuff
Dinner with Alumna
Joyo.com
Afternoon:
Morning:
Afternoon:
Morning:
Afternoon:
Morning:
Afternoon:
Late
Afternoon:
Dinner
Morning:
Afternoon:
Late
Afternoon:
Tsinghua University
Depart Beijing
Arrive Tokyo
Dinner
Dinner with Waseda
students and faculty
Depart NRT
Arrive in Pittsburgh
Daytime
Daytime
Taisei Corporation
NTT Docomo
Tepper promotion for
prospectives
Dinner with Alumnae
Sony
NTT Plala Networks
Waseda University
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Trip to Bohai plant
Tentative
Amazon.com
subsidiary
Lecture/discussion
“Structure of the
Japanese Economy
and Differences
between Japanese and
American Business”
Professor Hogi
ABA Asia Trip 2006
December 26, 2005
Company Visits / Dinners in China
Lenovo
TBA
Pepsi Co.
Contact:
Plant Contact: Wei Jian
Email: Jian.Wei@intl.fritolay.com
Tel.: +86-10-61268866
MP: +86 13911382281
HQ Contact: Caroline Jin
Email: Caroline.Jin@intl.fritolay.com
Tel: +86-21-23058101
Dress Code: Suits
Meeting:
Time: January 5th 2PM
Place:
PepsiCo Foods (China) Co., Ltd. Beijing Plant
No. 1 CiWei Road, SunCun Village, DaXing District, Beijing
(1 hour from WangFuJi)
Alcoa in Quinhuangdao
About:
Since the 1993 creation of the Alcoa Asia Ltd. representative office in Beijing, Alcoa has
established nine wholly owned and joint venture operating companies that provide
innovative solutions for customers in all major markets throughout the People's Republic
of China. Products produced at our facilities in Hangzhou, Shanghai, Tianjin, Kunming,
and Qinhuangdao include foil, fasteners, automotive products, construction products,
plastic closures and decorative sheet. Our Qinhuangdao location is the biggest foil
producer and exporter in China.
Contact:
Joseph Zhou
Email: Hoseph.Zhou@Alcoa.com
HR & Admin. Director
Tel: +86 335 385 2825
Fax: +86 335 385 2824
Cel: +86 137 0335 3388
Dress Code: Suits
Meeting:
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Time: January 5th 2PM
Place: 95 Beihuan Road, Qinhuangdao, Haigang District 066033, China
Joyo.com
About:
In the late summer of 2004, Amazon.com acquired Joyo.com for over $70MM. Founded
in 2000, Joyo.com sells books, music, videos, toys, software and gifts, with books as the
largest product category.
Contact:
Zhaolu Song
E-mail: zsong@cmu.edu
Dress Code: Business Casual
Meeting:
Time: January 9th 9AM
Place:
8 Yong'an Li, 19th floor, Chaoyang district, Beijing
北京市朝阳区建国门外大街永安里 8 号华彬国际大厦 19 层
(20 minutes from WangFuJi)
Content:
9:00AM - 9:30AM Joyo presentation (Huabin)
9:30AM - 10:00AM Q&A session with Hanhua and Albert (Huabin)
10:00AM - 12:00PM Beijing Fulfillment Center
Tsinghua University
About:
Tsinghua University has the number one business school in China
Contact:
Professor Gu
Dress Code: Suits
Meeting:
TBA
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Company Visits / Dinners in Japan
Taisei Corporation
About:
“As the world enters the second century of modern urban construction, there is a strong
need to preserve historic scenery, protect the environment and create attractive public and
private spaces. Taisei Corporation is responding with even more advanced technologies
through research and development. With a capital position among the strongest in the
industry, we are redoubling efforts to produce world-class, leading-edge technologies.
Operations extend internationally, including the construction of dams and other
environmental and infrastructure projects in developing nations.”
Contact Person:
Tatsuo Mutayama
TEL: 81-90-3040-3684
Dress code: Suits
Meeting:
Time: January 12th 10:00AM
Place:
横浜市戸塚区名瀬町 344-1
344-1 Naze-Cho, Totsuka-ku, Yokohama
9:08
↓
9:37
Shinagawa
JR YokosukaLine【Kurihama】
Higashitotsuka
\450
9:40 Meeting at the ticket gate in Higashitotsuka Station
*If you’ll be late, you may be refused to enter Taisei R&D center for security purpose
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December 26, 2005
NTT Docomo
About:
NTT Docomo is the biggest cellular phone service provider in Japan.
Contact Person:
Our Very Own Yasu EGUCHI
E-mail: yeguchi@andrew.cmu.edu
Dress code: Suits
Meeting:
Time: January 12th 14:00AM
Place:
東京都千代田区永田町 2-11-1 山王パークタワー
Sano Park Tower, 2-11-1, Nagatacho, Chiyoda-Ku, Tokyo
13:50 Meeting at around security check point in front of the elevator toward 29F in 1st floor
of Sanno Park Tower
Coffee with Prospectives
Contact Person:
Our Very Own Aya FUJIKI
E-mail: afujiki@andrew.cmu.edu
Dress code: None
Meeting:
Time: January 12th 5:30PM to 6:45PM
Place:
喫茶室ルノアールニュー銀座店 マイスペース４号室
東京都中央区銀座 2-8-15 共同ビル銀座通り 2F
Renoir New Ginza Café, My Space #4
Kyodo Building 2F, 2-8-15, Ginza, Chuo-ku, Tokyo
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Dinner with Alumna at Akita Dining
Contact Person:
Our Very Own Yori YAMASHITA
Meeting:
Time: January 12th 7PM
Place: Akita Dining in Shimbashi
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Sony
Contact Person:
Ayako HOTTA
E-mail: Ayako.Hotta@jp.sony.com
TEL: 81-3-5448-2800
Dress code: Suits
Meeting:
Time: January 13th 9:45AM
Place: See attached
Content
9:45am
9:50-10:50am
11:15-12:00pm
Meet in front of Takanawa Office
Guided Tour of Sony Media World in English
(----Walk back to Sony Offices----)
Group discussion session w/ Corporate Advisor Aoki @ Sony
University, building #11
Discussion topics may include:
 What constitutes Project Nippon, the restructuring plan by CEO Howard Stringer?
How will this build off of "Transformation 60", the restructuring plan from
before? How is implementation going?
 How are the employees of Sony responding to an American CEO? What, if
anything, has changed in terms of corporate culture?
 What is Sony's strategy for the Playstation 3? How does Sony plan to compete
with Microsoft's Xbox 360?
 What is Sony's strategy to compete with iPod/iTunes? Sony has reputation of
good design of products, but Apple also have that reputation. Can Sony beat
Apple in terms of product design?
 How does Sony plan to handle the competing interests of its Media and
Electronics divisions? How are they going to address tensions between the two
groups?
 How does Sony plan to recover from the bad press relating to the DRM software
on its CDs? Does it plan to continue using DRM on future CDs?
Plala Networks
About:
Part of NTT East, Plala Networks is a venture-inspired offering internet service
capabilities as well as phone, TV and karaoke services.
Contact Person:
Yuki NAGATA
TEL: 81-3-5954-7592
Dress code: Suits
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Meeting:
Time: January 13th 2:40PM
Place:
東京都豊島区東池袋 3-1-1 サンシャイン 60 24 階
24th floor of Sunshine 60, 3-1-1, Higashi Ikebukuro, Toshima-Ku, Tokyo
14:40 Meeting in front of the elevator toward 24F in 1st floor of the office buildling of
Sunshine60. Then going up to the reception of Plala Networks in 24F
Waseda Business School (WBS)
Contact Person:
Fumiko KATO
TEL: 81-90-2466-9605
E-mail: 4005N005@wiaps.waseda.ac.jp
Dress code: Suits
Mini-Lecture at WBS with Professor Hogi
Meeting:
Time: January 13th 6:00PM
Place:
東京都新宿区西早稲田 1-21-1 早大西早稲田ビル 3F 309 号室
Sodai Nishi Waseda Building, 3F Room 309
1-21-1, Nishi Waseda, Shinjuku-Ku, Tokyo
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December 26, 2005
17:55 Meeting at the room #309 Nishi-Waseda Bldg.3F
Dinner with WBS at Tofuro
Meeting:
Time: January 13th 7:15PM
Place:
新宿区高田馬場 2-18-11 稲門ビル４F TEL:03-3205-8255
Inamon Building 4F, 2-18-11, Takadanobaba, Shinjuku-Ku, Tokyo
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Companies
Lenovo
Lenovo, formerly known as Legend Group Limited, is the largest PC maker in the
world's most populous country. It holds its own against PC giants such as Dell and
Hewlett-Packard, offering low-priced computers with Chinese character systems.
Other products include servers, handheld computers, imaging equipment, and
mobile phone handsets. The company also provides manufacturing and IT
integration and support services. Legend Group Holdings, which is controlled by the
Chinese government, owns a majority stake in Lenovo. Lenovo acquired IBM's PC
operations for approximately $1.75 billion in May 2005.
Lenovo faces stiff competition from US-based PC makers looking to capture the
untapped Chinese market, but the home turf favorite has some significant
advantages. Its extensive distribution network, inexpensive labor, and immunity
from import tariffs allow it to undercut prices from companies such as Dell and IBM,
and its ties to the Chinese government give it an inside track for lucrative state
contracts. Although it generates most of its sales in China, the company is targeting
international markets. It launched the corporate brand Lenovo in 2003, primarily
for use outside China; it officially changed its English name to Lenovo the following
year.
Poor performance from its IT services and contract manufacturing divisions led
Lenovo to divest much of those operations in 2004. The company has since focused
on growing its PC business, with an eye toward international expansion. To that end
Lenovo negotiated the deal with IBM that fulfills both goals; through the acquisition,
which includes the IBM's ThinkPad and ThinkCentre lines, Lenovo became the
world's third largest PC provider. Terms of the deal allow it to use the IBM brand on
those products for five years. The company relocated its headquarters to New York.
After the announcemnt of the acquisition, three US private equity firms agreed to
invest $350 million in Lenovo Group. Texas Pacific Group (TPG) agreed to invest
$200 million; General Atlantic LLC promised $100 million; and Newbridge Capital,
an affiliate of Texas Pacific and Blum Capital Partners will put up $50 million. The
combined investment left the three private equity partners with more than a 12%
stake in the combined Lenovo-IBM business and three of the 12 board seats. Legend
Holdings Limited owns 42%; IBM holds 13%.
History
Liu Chuanzhi, an engineer at the Chinese Academy of Sciences who wrote industry
research reports, established Legend Group Holdings Co. in 1984 in Beijing. Backed
by a modest investment from the academy, Liu and 10 other engineers were given a
green light to form a retail business. They first bought and sold items ranging from
TVs to roller skates, but later focused on distributing computer products and
eventually moved into manufacturing PCs for AST. Legend introduced its first
proprietary product, a Chinese character system for PCs, in 1985.
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In 1988 the company formed Legend Holdings Limited, which was originally a Hong
Kong-based PC distributor. The following year the parent company began designing
and manufacturing motherboards and added systems integration services to its
offerings. In 1990 China reduced import tariffs, a move that opened the trade door
for companies such as IBM and Compaq. That year Legend Group Holdings began
making its own brand of PCs.
Legend Holdings Limited went public in 1994, and the following year began
absorbing operations from its parent company, which had retained approximately
60% ownership in the subsidiary. By 1996 it was tied with IBM for PC market share
in China; it became the country's top brand the following year.
In 1998 parent company Legend Group Holdings transferred Beijing Legend Group
to its Hong Kong-based subsidiary. The following year Microsoft, looking to extend
its operating system dominance into China, teamed up with Legend Holdings
Limited to create set-top boxes. In 2000 the company partnered with Pacific Century
CyberWorks to provide broadband Internet services. The following year Legend spun
of its distribution business, Digital China, as a separate public company.
In 2002 Legend Holdings Limited changed its English company name to Legend
Group Limited. The company launched a new corporate brand, Lenovo, the following
year, and in 2004 it officially adopted Lenovo as its English name. It also sold its
non-telecom IT services business to AsiaInfo Holdings in 2004.
Company Type
D&B D-U-N-S Number
Fiscal Year-End
2004 Sales (mil.)
1-Year Sales Growth
2004 Net Income (mil.)
1-Year Net Income Growth
2004 Employees
1-Year Employee Growth
(from Hoovers)
Public (Pink Sheets: LNVGY [ADR]; Hong
Kong: Full Quote external site content)
662424795
March
$2,971.2
14.5%
$135.0
3.5%
11,408
17.5%
So far, these are the signs that Lenovo has posted (from Lexis-Nexus)
 The New York-based company has been aggressive about updating and
refreshing the ThinkPad brand it acquired from IBM, Armonk, N.Y. Not only
has Lenovo introduced the first ThinkPad-branded tablet, the ThinkPad XSeries, but last week it formally rolled out the ThinkPad Z-Series-the first of
its kind with integrated EVDO. The ThinkPad Z-Series also has a built-in
wide-screen format and the option of a titanium cover instead of the
traditional ThinkPad black.

Deepak Advani, Lenovo's chief marketing officer, made it clear during a news
conference in New York earlier this month that Lenovo would continue to
keep the IBM logo on the ThinkPad lineup for five years-as the purchase
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agreement called for-while other Lenovo executives said it will build on IBMdeveloped technologies such as drop-resistant components.

The company will continue to build on legacy IBM technologies including
ThinkVantage, and Lenovo CEO Steve Ward appeared on stage with Intel
CEO Paul Otellini at the Intel Developer Forum in August to showcase Lenovo
management technologies on the forthcoming Intel processor lineup.

Yanqing Yang, Lenovo's chairman, said at the New York press conference that
the company would be eager to build its worldwide business into a 50-50
split-putting its consumer, small business and education businesses on one
side, and its enterprise and government ones on the other. In China, 70
percent of Lenovo's business is with what it calls "transaction" customersSMB, education and consumer. In the United States, the business formerly
owned by IBM is all-commercial, focused largely on the high end. Prior to the
IBM acquisition, IBM had made it a corporate strategy to completely shun the
consumer space in favor of a commercial-only strategy, and had limited
success in the SMB space.

Lenovo will continue direct relationships with a few, large corporate accounts,
executives said, but will work to grow its sales through the channel rather
than via direct.
Lenovo just hired William Amelio as President and CEO (end of December 2005).
Amelio was formerly the a senior VP at Dell and President of Dell Asia-Pacific and
Japan. (from PR Newswire)
Pepsi Cola
The PepsiCo challenge -- to keep up with archrival The Coca-Cola Company -- never
ends for the world's #2 carbonated soft-drink maker. PepsiCo's soft drinks
(including Pepsi, Mountain Dew, Slice) make up more than one-quarter of its sales.
(Bottling operations are run independently.) PepsiCo also owns Frito-Lay, the
world's #1 maker of snacks such as corn chips (Doritos, Fritos) and potato chips
(Lay's, Ruffles, WOW!). PepsiCo also sells Tropicana orange juice brands and
Gatorade sports drink and water. Also under PepsiCo is the #1 US bottled water
(Aquafina), Dole juices (licensed), Lipton ready-to-drink tea, and Rold Gold pretzels.
PepsiCo may be vying for more Pepsi-drinking teenagers, but rising snacks and juice
sales are helping to quench the company's thirst for growth. Frito-Lay's salty snacks
rule the US market; the snack division contributes about one-third of company sales.
PepsiCo has a joint venture with Dutch giant, Unilever, to sell Lipton ready-to-drink
tea in targeted markets worldwide. Back in the US, PepsiCo restructured its PepsiCo
Beverages & Foods division. The restructuring created four divisions: PepsiCo
International, PepsiCo Beverages North America, Frito-Lay North America, and
Quaker Foods North America.
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The company revealed in 2004 an SEC investigation involving transactions PepsiCo
had with Kmart. Allegedly lower-level employees within its cola and snack divisions
signed documents that Kmart used to improperly record nearly $6 million in
revenue. PepsiCo says it cooperated with the investigation, which led to the
resignations of a PepsiCo national account manager and a sales director.
With a saturated soft-drink market, the company continues to try new iterations: It
will introduce a coffee-flavored cola, called Pepsi Max Cino, in the UK in 2006.
Retailing giant Wal-Mart accounts for about 11% of Pepsi's domestic sales.
History
Pharmacist Caleb Bradham invented Pepsi in 1898 in New Bern, North Carolina. He
named his new drink Pepsi-Cola (claiming it cured dyspepsia, or indigestion) and
registered the trademark in 1903. Following The Coca-Cola Company's example,
Bradham developed a bottling franchise system. By WWI, 300 bottlers had signed
up. After the war, Bradham stockpiled sugar to safeguard against rising costs, but in
1920 sugar prices plunged, forcing him into bankruptcy in 1923.
Pepsi existed on the brink of ruin under various owners until Loft Candy bought it in
1931. Its fortunes improved in 1933 when, in the midst of the Depression, it doubled
the size of its bottles to 12 ounces without raising the five-cent price. In 1939 Pepsi
introduced the world's first radio jingle. Two years later Loft Candy merged with its
Pepsi subsidiary and became The Pepsi-Cola Company.
Donald Kendall, who became Pepsi-Cola's president in 1963, turned the firm's
attention to young people ("The Pepsi Generation"). It acquired Mountain Dew in
1964 and became PepsiCo in 1965, when it acquired Frito-Lay.
In 1972 PepsiCo agreed to distribute Stolichnaya vodka in the US in exchange for
being the only Western firm allowed to bottle soft drinks in the USSR. With the
purchases of Pizza Hut (1977), Taco Bell (1978), and Kentucky Fried Chicken (1986),
it became a major force in the fast-food industry.
When Coca-Cola changed its formula in 1985, Pepsi had a short-lived victory in the
cola wars (until the splashy return of Coca-Cola classic). The rivalry was extended to
ready-to-drink tea in 1991 when, in response to Coca-Cola's Nestea venture with
Nestlé, PepsiCo teamed up with Lipton (they now lead the market).
Between 1991 and 1996 PepsiCo aggressively expanded its overseas bottling
operations. However, its efforts contrasted markedly with Coca-Cola's well-oiled
international distribution machine. The firm then shifted its attention to the
organization of its overseas network. Roger Enrico became CEO in 1996.
A year later PepsiCo spun off its $10 billion fast-food unit as TRICON Global
Restaurants (now known as YUM! Brands, Inc.), putting itself in a better position to
sell its soft drinks at other restaurants. Also in 1997 it bought Borden's Cracker Jack
snack and Smith's snacks from the UK's United Biscuits.
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December 26, 2005
In 1998 it bought Seagram's market-leading Tropicana juices (rival of Coca-Cola's
Minute Maid) for $3.3 billion. The firm sold a 65% stake in its new Pepsi Bottling
Group to the public in 1999.
Its more than $13 billion purchase of The Quaker Oats Company in 2001 added the
dominant Gatorade sports drink brand to its lineup. To make room for Gatorade,
PepsiCo sold its competing All Sport energy drink to The Monarch Company, an
Atlanta-based beverage company, later that year.
Also in 2001, PepsiCo bought a majority of South Beach Beverage Co., maker of SoBe
drinks (fruit blends, energy drinks, teas, sports drinks). Later that year the company
named president and COO Steve Reinemund as chairman and CEO, Enrico as vice
chairman (where he remained through 2002), and CFO Indra Nooyi as president.
The company launched Pepsi Blue, a new berry-flavored cola, in 2002, and Pepsi
Vanilla in 2003, targeting thirsty teenagers in an attempt to energize the flat fizzydrinks segment.
Like Coca-Cola, PepsiCo found opportunities for growth overseas in 2003. However,
claims surfaced that year that both Coke and Pepsi bottled in India contained traces
of DDT, malathion, and other pesticides that exceeded government limits. Both Coke
and Pepsi denied the reports in a joint press conference. Government labs cleared
the colas, saying the drinks were safe, but not before both soft drink companies saw
sales dip by as much as 50% in a two-week period.
In 2004 PepsiCo approached Ocean Spray about a joint venture but was turned away
by cranberry farmers who own the juice manufacturer. The company bought General
Mills's stake of their joint venture, Snack Ventures Europe (SVE), in 2005 for $750
million. The deal gave Pepsi control of Europe's largest snack food company.
Pepsi ceased manufacturing "half the calories" Edge in 2005 due to slow sales.
Company Type
D&B D-U-N-S Number
Fiscal Year-End
2004 Sales (mil.)
1-Year Sales Growth
2004 Net Income (mil.)
1-Year Net Income Growth
2004 Employees
1-Year Employee Growth
(from Hoovers)
Public (NYSE: PEP)
001287762
December
$29,261.0
8.5%
$4,212.0
18.0%
153,000
7.0%
Pepsi has started a new factory in Zhanjiang on July 1, 2005, bringing the total
number of Pepsi Cola bottling plants to 16 in China. The Zhanjiang plant, covering
58,000 square meters and costing 98 million yuan (US$11.8 million), is expected to
bottle 50,000 tons of soda drinks a year. It will supply Pepsi products to Zhanjiang,
Maoming and Hainan.
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South China's Guangdong province has a huge demand for soft drinks, with the
market share of Pepsi products in this area increasing at an annual rate of 88 per
cent. The company hopes that the new Zhanjiang plant would reduce their
transportation costs and optimize the distribution system. Zhu Huaxi, president of
Pepsi China, revealed that 3-5 more bottling plants would be launched by the end of
this year. (from Asia Pulse)
Soft drink and snack-food maker PepsiCo yesterday reported a 13 percent rise in
second-quarter earnings, driven by strength in China and other developing markets,
as well as strong domestic sales of cereal and pasta in its Quaker Foods business.
The company, which also owns Frito-Lay snacks, said it would bolster investment in
its North American beverage business and overseas to revive sluggish soda sales. The
increased spending on new products comes as PepsiCo and archrival Coca-Cola each
grapple with declining soda sales, as global consumers are increasingly drawn to
coffee, tea and juice items.
Revenue rose 9 percent to $7.7 billion, topping analysts' average forecast of $7.56
billion. Volume rose in the international division, snacks volume rose 3 percent,
while drinks volume jumped 10 percent. PepsiCo said it saw strong snacks growth in
developing markets like India, China, Russia and Turkey, while drinks volume
growth was led by the Middle East, China and Argentina. (from Seattle Times)
Alcoa
Alcoa is one of the world's top producers of alumina (aluminum's principal
ingredient, processed from bauxite) and aluminum. Its vertically integrated
operations include bauxite mining, alumina refining, and aluminum smelting;
primary products include alumina and its chemicals, automotive components, and
sheet aluminum for beverage cans. The company's non-aluminum products include
consumer products, fiber-optic cables, food service and flexible packaging products,
and plastic closures. Major markets include the aerospace, automotive, construction,
and packaging industries. Alcoa has gained presence in China's aluminum market by
forming a strategic alliance with Aluminum Corporation of China (Chalco).
Alcoa has been looking for growth opportunities internationally, previously making
plays for Australian miner WMC and Norway's Elkem (the world's largest supplier of
silicon metal). Alcoa owns 46% of Elkem but agreed in early 2005 to accept an offer
for its stake from Orkla, which has made a deal to buy up the entirety of the
Norwegian company.
Its 8% stake in Chalco enables Alcoa to partake in China's aluminum market, the
fastest growing in the world. In January 2005 Alcoa bought two fabricating facilities
in Russia for more than $250 million in cash. The company hopes the new plants
provide a gateway not only into Russia but into much of Eastern Europe and Asia as
well.
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As part of its divestment strategy, in early 2004 Alcoa sold its automotive fastener
unit to privately held Kaminski Holdings for an undisclosed price. That same year,
the company sold its specialty chemicals unit for $342 million to Rhone Capital LLC
and Teachers' Merchant Bank.
Alcoa has divested its polyethylene terephthalate packaging business (deemed a noncore business) in South America, sold to Amcor PET Packaging. The company agreed
to expand its alliance with Kobe Steel Ltd. to develop aluminum products for
automakers and invest R&D dollars hoping for a broader range of products for the
industry. Alcoa also plans to expand alumina production in developing nations such
as Brazil and Jamaica. In addition, the company plans to build a $1 billion aluminum
smelter facility on the island of Trinidad, which will produce roughly 250,000 metric
tons of aluminum annually. Alcoa is scheduled to own 60% of the plant and the
Trinidad government the rest of the stake.
Alcoa and Fujikura Ltd. had shared a joint venture called Alcoa Fujikura. The two jv
partners disbanded Alcoa Fujikura in early 2005 though, splitting it evenly between
the parents. Alcoa acquired the automotive cable operations based in Detroit, and
Fujikura kept the telecommunications unit that is based in Nashville. Later in the
year Alcoa decided to sell its rail unit -- comprised of four railroad companies in
Arkansas, New York and Texas -- to RailAmerica for about $77 million; the two
companies signed an agreement allowing service through the railroads.
History
In 1886 two chemists, one in France and one in the US, simultaneously discovered
an inexpensive process for aluminum production. The American, Charles Hall,
pursued commercial applications. Two years later, with an investor group led by
Captain Alfred Hunt, Hall formed the Pittsburgh Reduction Company. Its first
salesman, Arthur Davis, secured an initial order for 2,000 cooking pots.
In 1889 the Mellon Bank loaned the company $4,000. In 1891 the firm recapitalized
with the Mellon family holding 12% of the stock.
Davis led the business after Hunt died in 1899 and stayed on until 1957 (he died in
1962 at age 95). The company introduced aluminum foil (1910) and found
applications for aluminum in new products such as airplanes and cars. It became the
Aluminum Company of America in 1907.
By the end of WWI, Alcoa had integrated backward into bauxite mining and forward
into end-use production. By the 1920s the Mellons had raised their stake to 33%.
The government and Alcoa had debated antitrust issues in court for years since the
smelting patent expired in 1912. Finally a 1946 federal ruling forced the company to
sell many operations built during WWII, as well as its Canadian subsidiary (Alcan).
In the competitive aluminum industry of the 1960s, Alcoa's lower-cost production
helped it seize market share, especially in beverage cans. In the 1970s Alcoa began
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offering engineered products such as aerospace components, and in the 1980s it
invested in research, acquisitions, and plant modernization.
Paul O'Neill (former president of International Paper) arrived as CEO in 1987 and
shifted the company's focus back to aluminum. Sales and earnings set records the
next two years but plunged afterward, reflecting a weak global economy and recordlow aluminum prices. Then the fall of the Soviet Union in the early 1990s led to a
worldwide glut as Russian exports soared.
In 1994 Alcoa cut its production as part of a two-year accord with Western and
Russian producers. That year the company agreed to pool its alumina and chemical
operations with Australia's Western Mining Corp.
Alcoa formed a joint venture with Shanghai Aluminum Fabrication Plant in China.
The company expanded in Europe in 1996, acquiring Italy's state-run aluminum
business, followed by the purchase of Inespal, Spain's state-run aluminum
operations, in 1998. Alcoa also bought #3 US aluminum producer Alumax for $3.8
billion in 1998, but only after divesting its cast-plate operations.
Known by the nickname "Alcoa" since the late 1920s, the company adopted that as
its official name in 1999. O'Neill retired as CEO in 1999; COO Alain Belda succeeded
him. Later that year, Alcoa bought the 50% of aluminum auto parts maker A-CMI
that it did not already own from Hayes Lemmerz International.
In 2000 Alcoa bought aluminum extrusion maker Excel Extrusions from Noranda
(now called Falconbridge) and paid $4.5 billion for Reynolds Metals after agreeing to
divest some assets -- including all of Reynolds' alumina refineries -- to satisfy
regulators. The same month Alcoa acquired Cordant Technologies. Alcoa also
assumed Cordant's 85% ownership of Howmet International (castings) as a result of
the transaction -- and later acquired the remainder of Howmet. Late in 2000
President-elect George W. Bush named Alcoa's chairman Paul O'Neill to be treasury
secretary. (O'Neill subsequently resigned the post in December 2002.)
Alcoa sold its majority stake in the Worsley alumina refinery (Australia) to BHP
Billiton in 2001 for about $1.5 billion as part of its refinery divestments. Treasury
Secretary O'Neill completed the sale of his more than $90 million worth of Alcoa
stock and options in June. In late November Alcoa and BHP Billiton combined their
North American metals distribution businesses to create Integris Metals -- a joint
venture with revenues of about $1.5 billion.
Late in the year Alcoa agreed to buy an 8% stake in Aluminium Corporation of China
(Chalco). The deal gave Alcoa a seat on the board and 27% of Chalco's initial public
offering.
Early in 2002 Alcoa made a bid to acquire Elkem, a Norway-based metals producer,
for $850 million; Elkem spurned the offer. Later that year Alcoa bought Elkem
shares in the open market, increasing its ownership to around 46%. Alcoa also
purchased Ivex Packaging (Chicago-based industrial packaging group), which
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excluded Ivex's 48% stake in Packaging Dynamics for an estimated $790 million in
cash and assumed debt. The company raised its stake in Shibazaki Seisakusho
(plastic and aluminum closures and caps, Japan) from 70% to around 95%. At the
close of 2002 Alcoa bought Fairchild Fasteners (aerospace and industrial fastening),
a unit of The Fairchild Corporation, for roughly $657 million.
The acquisitions kept apace into the next year. In 2003 Alcoa acquired Camargo
Correa Group's 41% stake in the South American businesses of Alcoa, including its
largest subsidiary in the group -- Alcoa Aluminio S.A. (Brazil) -- and operations in
Argentina, Chile, Colombia, Peru, Uruguay, and Venezuela.
The next year, the company's Alcoa Mill Products business launched the Alcoa
Aerospace Center (AAC) Shanghai to supply aerospace material and services to
aerospace customers in the Asia/Pacific region and in China.
Faced with lower aluminum prices in its aerospace, industrial-gas-turbine, and
nonresidential construction markets, Alcoa decided to divest under-performing
businesses primarily in its automotive, packaging, and specialty chemicals units. It
sold off its Alumax Foils facilities (Russellville, Arkansas and St. Louis, Missouri) to
JW Aluminum. Alcoa also cut its workforce by 6% (largely from its Mexican auto
parts plants). Also in 2004, the company sold its chemicals unit to private investors.
The resulting business is called Almatis.
Company Type
D&B D-U-N-S Number
Fiscal Year-End
2004 Sales (mil.)
1-Year Sales Growth
2004 Net Income (mil.)
1-Year Net Income Growth
2004 Employees
1-Year Employee Growth
(from Hoovers)
Public (NYSE: AA)
001339472
December
$23,478.0
9.2%
$1,310.0
39.7%
119,000
(0.8%)
The world's largest producer and manager of primary aluminum, fabricated
aluminum and alumina facilities Alcoa is to strength its presence in China, revealed
Michael Garcia, vice president of sales and marketing for Alcoa Asia Pacific. The
company is optimistic towards the Chinese market where alumina shortage is
forecasted to continue to at least 2006.
In the future, it plans to move ahead with several projects there. In detail, US-based
Alcoa (NYSE: AA) is to join hands with China International Trust & Investment
(CITIC) to set up a joint venture in Qinhuangdao City of northern China's Hebei
Province, which is scheduled to complete in October. Other major projects includes
building a alumina production base in Guangxi Zhuang Autonomous Region and two
fastening piece plants in Suzhou of southern China's Jiangsu Province. Since
formally cutting into the country in 1993, Alcoa has established 13 companies across
China, including wholly-owned subsidiaries and joint ventures.
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Last year, the company's total turnover in China hit USD 570 million. (from
SinoCast)
Alcoa announced today that it has purchased the 30 percent interest in the Alcoa
Closure Systems International (Tianjin) Co.,Ltd. joint venture currently owned by its
partner China Suntrust Investment Group Co.,Ltd. The joint venture was established
in 1994 to produce plastic closures for beverages.
Alcoa Closure Systems International (Tianjin) Co.,Ltd. is now a wholly owned
foreign enterprise. CSI Tianjin received its new business license on November 24,
2005.
Alcoa's presence in China began in 1993 with the creation of the Alcoa Asia Ltd.
representative office in Beijing. Since then, Alcoa has established thirteen wholly
owned and joint venture operating companies that provide innovative solutions for
customers in all major markets. Products produced at our facilities in Qinghuangdao,
Shanghai, Tianjin, Kunming and Hangzhou include foil, fasteners, automotive
products, construction products, plastic closures and decorative sheet.
Alcoa is the world's leading producer and manager of primary aluminum, fabricated
aluminum and alumina facilities, and is active in all major aspects of the industry.
Alcoa serves the aerospace, automotive, packaging, building and construction,
commercial transportation and industrial markets, bringing design, engineering,
production and other capabilities of Alcoa's businesses to customers. In addition to
aluminum products and components, Alcoa also markets consumer brands including
Reynolds Wrap(R) foils and plastic wraps, Alcoa(R) wheels, and Baco(R) household
wraps. Among its other businesses are vinyl siding, closures, fastening systems,
precision castings, and electrical distribution systems for cars and trucks. The
company has 131,000 employees in 43 countries and has been named one of the top
three most sustainable corporations in the world at the World Economic Forum in
Davos, Switzerland. (from Business Wire)
Joyo.com
In addition to providing customers in China with the widest selection of media
products -- as well as toys and electronics -- at the best prices, Joyo.com exports
Chinese-language books, DVDs and music to dozens of countries around the world.
Since Amazon.com acquired Joyo.com Limited, Joyo.com has introduced a number
of improvements to its web site which makes shopping and buying even easier.
For example, Joyo.com has added thousands of new titles in all categories, which
means that customers can find more of what they're looking for. Joyo.com also offers
improved browse features and faster search results, so it's easy for customers to find
what they want, more self-service features, allowing customers to better manage
their accounts, and expanded payment options, enabling customers to use more
types of credit cards on the site.
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In addition, Joyo.com recently became the first e-commerce company in China to
automatically give customers a credit after it lowered the price on the highly
anticipated Harry Potter and the Half-Blood Prince (Chinese simplified version), the
sixth book in J.K. Rowling's epic Harry Potter series. In July 2005, Amazon.com
announced that pre-orders for Harry Potter and the Half Blood Prince had exceeded
1.5 million orders worldwide, making the title the online retailer's largest new
product release ever.
About Joyo.com
Joyo.com was founded in May 2000 and offers customers a wide selection of books,
music, videos and DVDs, electronics, software, toys and gifts, among other products.
Joyo.com is headquartered in Beijing.
In 2004 Amazon.com acquired Joyo.com Limited, which operates the Joyo.com Web
sites in cooperation with Chinese subsidiaries and affiliates. (from Business Wire)
Taisei Construction
Taisei reaches for the sky as one of Japan's four largest contractors. The company
has constructed some of the most visible buildings in Japan, including the Landmark
Tower Yokohama, Japan's tallest skyscraper. As a general construction and civil
engineering firm, Taisei builds corporate offices, airport terminals, and sports arenas,
as well as bridges, dams, and power plants, throughout Japan and worldwide. It is
also involved in real estate operations.
The company has been hard hit by Japan's slumping construction market and has
been downsizing its real estate developments, including hotels, retail centers, and
condos. On the West Coast of the US, it has been converting old office buildings into
condos.
Company Type
D&B D-U-N-S Number
Fiscal Year-End
2004 Sales (mil.)
1-Year Sales Growth
2004 Net Income (mil.)
1-Year Net Income Growth
2004 Employees
1-Year Employee Growth
(from Hoovers)
Public (Exchange: Tokyo)
694665683
March
$15,131.5
10.3%
$98.0
(21.7%)
9,748
(3.0%)
NTT Docomo
The Japanese yen for mobile phones means business for NTT DoCoMo. Formerly
NTT Mobile Communications Network, the wireless spinoff of Nippon Telegraph
and Telephone (NTT), the mobile phone carrier has more than 50 million
subscribers to its digital network (a 56% market share). It is one of the world's
largest mobile phone operators by subscribers, behind #1 Vodafone. More than 41
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million customers subscribe to NTT DoCoMo's i-mode service, which provides
Internet access from mobile phones. The company also offers maritime and in-flight
phone services and sells handsets. NTT owns 63% of NTT DoCoMo.
DoCoMo (which means "anywhere") corners nearly 60% of the Japanese market for
mobile phones through its eight majority-owned regional operating subsidiaries. It
has announced plans to take full ownership of these units and consolidate them.
The company has scored big with the rollout of its popular i-mode service. It became
the first company in the world to offer the third-generation (3G) mobile phone
service with a its 2001 debut in Tokyo. DoCoMo is expanding with an agreement to
acquire a 10% stake in KT Freetel, the Korean mobile carrier.
DoCoMo is now building a presence in Europe. It has teamed up with Telecom Italia
Mobile to introduce i-mode services in Italy. It also joined Hutchison Whampoa and
Dutch phone company KPN in an alliance to bid on European next-generation
mobile phone licenses and the company paid $4.5 billion for a 15% stake in KPN's
wireless unit, KPN Mobile (the stake was reduced to 2.2% when DoCoMo declined to
subscribe to additional shares offered the transferred back to parent KPN. DoCoMo
continues its i-mode affiliation, however).
The company also has licensed its i-mode technology to the telecom unit of French
construction group Bouygues, to Italy's Wind, and to Telefónica Móviles in Spain,
and it has reorganized its European holdings under a single subsidiary, DoCoMo
Europe Ltd. But failed expectations have led the company to sell its 20% stake in
Hutchison 3G UK to Hutchison Whampoa in a deal valued at €120 million.
DoCoMo has staked its claim in the US, too, by paying $9.8 billion for a 16% stake in
AT&T Wireless. However, AT&T Wireless was the subject of a takeover bidding war
won by rival Cingular Wireless in a deal valued at $41 billion and DoCoMo sold its
stake. DoCoMo is taking an active role in advancing new mobile communications
technologies through the creation of a US-based venture investment firm, DoCoMo
Capital. The company is planning new services for all its markets, through a joint
venture with Sony focused on developing mobile phones equipped with Sony's
smart-card technology. DoCoMo has, however, agreed to sell its 43% stake in
DoCoMo AOL to America Online, and it has liquidated several subsidiaries,
including an operating unit in Brazil.
After the number of paging service subscribers fell to less than 300,000 from a high
of 6.5 million (in 1996), the company is ending the service in early 2007.
History
Formed in 1952 by the Japanese Ministry of Communications to rebuild Japan's
war-ravaged phone system, Nippon Telegraph and Telephone (NTT) enjoyed a
monopoly on phone services for more than four decades.
NTT first went into mobile communications with a maritime phone service in 1959,
and in 1968 the company began offering paging services. Other telecommunications
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services followed: car phone service (1979), in-flight phone service (1986), and
mobile phone service (1987).
In 1991 NTT established a subsidiary to adopt these wireless segments: It launched
operations in 1992 as NTT Mobile Communications Network under the leadership of
NTT executive Kouji Ohboshi. The firm quickly took on the DoCoMo nickname. The
year closed with slightly more than a million analog mobile phone users in Japan -- a
market DoCoMo shared with upstart telecom companies DDI and IDO (later bought
by DDI). Paging service was more popular, and DoCoMo won more than 3 million
customers.
DoCoMo in 1993 launched digital mobile phone service based on a scheme called
PDC (personal digital cellular) -- a system incompatible with the digital standards
that would take root in Europe and the US. Liberalization of the cellular phone
market in 1994 triggered unexpected growth: Customers who previously had to lease
mobile phones from the network operators could now buy them at retail stores.
Further competition emerged in 1995 with the launch of personal handyphone
services, or PHS (parent company NTT was among the companies providing PHS),
but DoCoMo's subscriber count passed 3.5 million mobile phone users -- about half
the market.
DoCoMo's pager business peaked in 1996 before commencing a long-term decline;
the mobile phone market, where DoCoMo had more than 8 million subscribers,
overtook it. The company launched a satellite-based mobile phone system that year
to serve customers beyond the range of cell sites, reaching ships and mountainous
regions.
Financial crises rocked the Pacific Rim in 1997, and Japan's Fair Trade Commission
rocked NTT by ordering it to cut its 95%-ownership of DoCoMo. Customers
continued to flock to mobile phones despite economic turmoil, and DoCoMo passed
the 15 million-subscriber mark. In 1998 DoCoMo gave hope to Japan's low-flying
market when it left the nest: Its mammoth IPO raised more than $18 billion.
Meanwhile, DDI (now KDDI) had become the first Japanese carrier to launch a
digital mobile phone network based on CDMA (code division multiple access)
technology. Though DoCoMo still used PDC, it redoubled its efforts to help develop
and standardize a next-generation, wideband version of CDMA.
In 1999 DoCoMo took over NTT's unprofitable PHS unit and rolled out a high-speed
data service over the PHS network.
It also became the first company in the world to offer the third-generation (3G)
mobile phone service with a 2001 debut in Tokyo of i-mode, which gave customers
Internet access on a specialized handset. To promote such new data services,
DoCoMo launched a joint venture in Japan with Microsoft (Mobimagic). That year it
acquired a 19% stake in the telecom unit of Hong Kong's Hutchison Whampoa..
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DoCoMo took the i-mode service international in 2001 when the company teamed
up with Telecom Italia Mobile to introduce the 3G service in Europe. The next year
DoCoMo became the largest shareholder in America Online Japan when it acquired
a 42% stake.
Company Type
D&B D-U-N-S Number
Fiscal Year-End
2005 Sales (mil.)
1-Year Sales Growth
2005 Net Income (mil.)
1-Year Net Income Growth
2005 Employees
1-Year Employee Growth
(from Hoovers)
Public (NYSE: DCM; Exchange: Tokyo)
691291264
March
$45,183.8
(6.8%)
$6,972.2
11.7%
21,527
1.3%
NTT DoCoMo Inc. said Wednesday (December 21st, 2005) it has agreed with Fuji
Television Network Inc. to acquire a 2.6 percent equity stake in the broadcaster in
order to realize an extensive partnership in digital broadcasting for cellular phones.
NTT DoCoMo will purchase treasury shares from Fuji TV for some 20.7 billion yen to
take the stake in January.
The deal marks NTT DoCoMo's first capital investment in a terrestrial broadcasting
station. The biggest Japanese cellphone company is also seeking similar partnerships
with other broadcasters in a bid to launch new business models by merging its
communications technology and infrastructure with broadcast content. Through the
tie-up with Fuji TV, NTT DoCoMo will seek to develop technology and services for
the so-called "one-segment" terrestrial digital broadcasting service for cellphone
users, which is slated to begin next April.
One-segment service provides ordinary TV programs and data broadcasting services
to cellphone and other mobile communication systems.
Fuji TV proposed the tie-up to NTT DoCoMo in part to secure a stable stockholder
following its takeover battle with Internet portal Livedoor Co. earlier this year,
sources familiar with the deal said. (from Knight Ridder)
NTT DoCoMo Inc. said Thursday (December 15th, 2005) it and South Korea's No. 2
mobile service provider KT Freetel Co. signed a capital and technological tie-up
agreement to expedite mobile services based on the sophisticated W-CDMA format
in the South.
Using NTT DoCoMo's mobile technology, the Japanese carrier will help KT Freetel
build up a mobile infrastructure network based on the W-CDMA technological
standard throughout the South, NTT DoCoMo said. (from Knight Ridder)
Nippon Telegraph and Telephone Corp. unveiled Wednesday (November 10th, 2005)
its group reorganization plan aimed at eliminating overlapping businesses among
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group companies in a bid to strengthen Internet operations and telecommunication
services for corporate clients, the two fields deemed promising.
The telecom giant's new midterm business strategy, which also includes the
establishment of a next-generation Internet protocol network, drew flak from its
smaller rival Softbank Corp., which expressed concerns about NTT returning to the
era when it was the state-owned telecom monopoly.
NTT eyes consolidating Internet access services and telecommunications services for
large companies under NTT Communications Corp., the group's long-distance
communication operator.
The move comes as competition in the telecom industry is heating up with increasing
attempts to fuse telecommunications into broadcasting and to mix fixed-line phone
services with those of mobile phones.
NTT's latest plan to integrate some group operations may be seen as going against
the spirit of the 1999 NTT law, which divided the mammoth telecom group's fixedline services into NTT Communications and the two regional units of NTT East Corp.
and NTT West Corp.
However, NTT denied such a view.
"This time's revision is only streamlining the roles (of group firms)," NTT President
Norio Wada said in a press conference. "It won't require a revision of the NTT law."
Under the plan, NTT East, NTT West and NTT DoCoMo Inc., the group's mobile
phone unit, will seek to offer services combining fixed-line phones using fiber optics
and mobile phones by jointly building a next-generation IP telephony network.
The plan also includes NTT Communications' absorption of NTT Resonant Inc., the
operator of the goo Web portal, by next summer.
NTT Communications runs Net access business under the OCN brand. The Net
access service offered by NTT East will also be transferred to NTT Communications.
Meanwhile, NTT rivals have expressed concerns that the new business strategy will
only accelerate NTT's dominance in the market.
Masayoshi Son, president of Softbank, said there is a necessity to "discuss the
structural problem of the NTT group." Any moves to strengthen the group would
"adversely affect the telecommunications market." NTT was privatized in 1985.
(from Knight Ridder)
Sony
All eyes are on Sony -- or, more likely, on its high-profit PlayStation home video
game systems. PlayStation 2 dominates the game console market with about 70% of
global sales (Nintendo’s GameCube and Microsoft’s Xbox control about 15% each).
Sony, one of the world's top consumer electronics firms, also makes a host of other
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products, including PCs, digital cameras, Walkman stereos, and semiconductors;
these products account for more than 60% of the company's sales. Sony’s
entertainment assets include recorded music and video (Epic and Columbia), motion
pictures (Sony Pictures Entertainment, Sony Pictures Classics), DVDs (Sony Pictures
Home Entertainment), and TV programming (Columbia TriStar).
In addition Sony sells mobile phones via Sony Ericsson, its joint venture with
Ericsson. Sony also owns an 8% stake in music club Columbia House.
Though the PlayStation still dominates the game machine scene, sales of other
electronics (DVD recorders, TVs, and computers) and music have seen a drop. This
is due to weak consumer demand, price wars, and increased competition from Apple
Computer's iPod, which has clobbered Sony's CD and mini disk Walkman products.
Samsung's consumer electronics lines, have also cut into Sony's TV sales (its biggest
market). These challenges, along with an increasingly stodgy image that's
overshadowing its former reputation as the bleeding edge of consumer electronics
manufacturers, as well as charges incurred while streamlining operations in recent
years, have significantly hurt Sony's market value. To boost sagging sales, Sony is
emphasizing high definition products for consumers and broadcasters, integrated
mobile video, music, and gaming products, and semiconductors (aimed at improving
product innovation).
Sony went through a major management shake-up in 2005, bringing Sir Howard
Stringer on board as chairman and CEO in June. Stringer, who served as head of the
company's US and electronics divisions, is the first non-Japanese CEO to head the
company. Nobuyuki Idea stepped down as chairman and CEO and serves as a
corporate advisor for the company.
After being on the job just a few weeks, Stringer announced plans to implement a
plan known as Project Nippon that aims to shake up the electronics business and
foster better communication between the company’s divisions. Stringer also
announced that he plans to implement a concrete research and development scheme
with a greater emphasis on consumer demands and reestablish the brand’s primacy
in the Japanese market.
Stringer's reorganization plans build off Sony's last restructuring effort (termed
"Transformation 60"), which began in 2004 and was to reduce the company's
headcount by 20,000, combine operating divisions, and shift component sourcing to
low-cost markets such as China. Stringer's plans call for cutting 10,000 jobs,
shuttering 11 manufacturing plants, and reducing the company's electronics product
lines by 20%. Additionally, Stringer has abolished Sony's 'Network Companies'
structure in favor of five product-focused business groups (TV, video, digital imaging,
audio, and VAIO) in order to streamline operations from R&D to distribution to
marketing; additionally, there are two new product development groups and two
business units focused on semiconductors and electronic components. The company
plans to spin off Sony Communication Network, the subsidiary that operates So-Net
Internet service (which has nearly 3 million subscribers), in an IPO scheduled for
late December 2005.
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Sony's PlayStation 3 will be released in the spring of 2006, several months after
Microsoft's Xbox 360, but most likely before Nintendo's new console, codenamed
Revolution. Like the Xbox 360, the PlayStation 3 is more of a multimedia
entertainment hub than a video game system; its computing power will allow users
to play a game, chat online and listen to music all at the same time, but it will also be
able to render film-quality animations at a resolution that's equivalent to that of a
cinematic digital projector. The PlayStation 3 is also backwards compatible with
PlayStation and PlayStation 2 games. Sony has no plans to cease development of
games for the PlayStation 2 for the time being and will continue to roll out titles
specifically for the older game system.
The company's PSP (PlayStation Portable), a Walkman-like device with DVD-quality
video launched in Japan in late 2004. The marketing hype surrounding the device's
US launch led to long lines at Sony stores when it was released stateside in early
2005. The PSP generated $150 million in sales for Sony the first week it was in stores.
PSX, which combines electronics and game technology, was released in Japan in late
2003; the device's US launch is planned for 2005. It also rolled out a "portable
broadband TV" in 2004; the device plays television shows and videos and allows
users to connect to the Internet.
To gain an edge over competitors, Sony is spending about $1.67 billion during the
next three years to build a cutting-edge semiconductor plant in Japan. The company
has announced that in 2006 it will roll out home servers for broadband and highdefinition TV systems powered by its new Cell computer chip (developed with IBM
and Toshiba), which also powers the new PlayStation 3.
Sony joined forces with other companies (including Matsushita and Samsung) to
form the Blu-Ray Disc Association, a group formed in 2004 to establish the Blu-ray
optical disc format as the post-DVD standard for optical storage media. In late 2004
Disney agreed to use the Blu-ray format, but not exclusively. Games designed for the
PlayStation 3 will be the first mass utilization of the Blu-ray format.
In May 2004 the company launched Sony Connect (originally named Net Music
Download), an online music service available to users of Sony's electronics and
mobile devices. The service, which will eventually expand to include video
downloads, is being managed by a newly formed subsidiary of Sony Corporation of
America. At the same time, Sony unveiled the Vaio Pocket, a portable music player
designed to compete with Apple's iPod; Vaio Pocket debuted in the US in late 2004.
Sony also introduced a similar product, Network Walkman -- its first Walkman with
a hard drive -- in 2004. In October 2004 the company launched a music download
system in Japan dubbed MusicDrop. The system utilizes Microsoft's Windows Media
Player.
In an effort to combat losses in a weakening music industry, Sony merged its music
division with BMG; the new company (Sony BMG Music Entertainment) is now the
#2 player (after Universal Music). Sony led a consortium of companies (including
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cable company Comcast and several investment firms) that bought movie studio
MGM in early 2005; the acquisition allows Sony to license and distribute MGM's
sizeable film library (4,000 films and over 10,000 television episodes). The deal also
provides for the creation of film co-productions, cable channels and video-ondemand services that will generate additional revenue for Sony, such as ComcastSony Networks, a joint venure with Comcast that will develop new cable networks
based around the content of the MGM library.
History
Akio Morita, Masaru Ibuka, and Tamon Maeda (Ibuka's father-in-law) started Tokyo
Telecommunications Engineering in 1946 with funding from Morita's father's sake
business. The company produced the first Japanese tape recorder in 1950. Three
years later Morita paid Western Electric (US) $25,000 for transistor technology
licenses, which sparked a consumer electronics revolution in Japan. His firm
launched one of the first transistor radios in 1955, followed by the first Sonytrademarked product, a pocket-sized radio, in 1957. The next year the company
changed its name to Sony (from "sonus," Latin for "sound," and "sonny," meaning
little man).
Sony has a long history of successful products, ranging from the 1968 introduction of
the Trinitron color TV tube, to the 1994 launch of the Playstation. Along the way it
launched th highly successful Walkman (1979), and pioneered the Audio CD format
with Philips.
In 2003 Sony adopted a US-style corporate governance model (made possible by a
revision in Japan's Commercial Code) and acquired CIS Corp., a Japanese
information system consulting firm. In an effort to cut costs through manufacturing
consolidation, Sony closed its audio equipment plant in Indonesia that year.
To manage its financial units (Sony Life Insurance Company, Sony Assurance, and
Sony Bank), it created Sony Financial Holdings in 2004. The company announced in
2005 that Idei would be succeeded by foreigner Howard Stringer, who had been in
charge of Sony's entertainment unit.
Company Type
D&B D-U-N-S Number
Fiscal Year-End
2005 Sales (mil.)
1-Year Sales Growth
2005 Net Income (mil.)
1-Year Net Income Growth
2004 Employees
1-Year Employee Growth
Public (NYSE: SNE [ADR]; Exchange: Tokyo)
690553649
March
$66,912.0
(7.2%)
$1,531.0
79.9%
162,000
0.6%
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Plala
Originally founded as GR Homenet by five companies which include NTT, Sega,
Sony, Yamaha, and JVC, Plala is an affiliate company of NTT East. Its main business
is Internet service provider. Its “ticket system” for online shopping, email, internet
access service payment is characteristic of Plala’s internet service when it was
founded. In 2005, Plala is one of big ISPs in Japan which provides internet access,
email, private website, IP phone, broadband TV service (4th MEDIA service, IP-TV),
online game, etc.
According to recent strategic plan presented by NTT Corporation, which is holding
company of NTT EAST, Plala networks, NTT resonant, which provides one of the
most major portal sites in Japan, and NTT Communication will be consolidated to
one company. In other words, all Internet-related companies of NTT group will be
consolidated to the new company.
In Japan, Cable TV is not as popular as in the United States. Thus, Internet access
via Cable TV is not common. Recently, Internet access by fiber optics started to be
popular and about 10% of customers are using fiber optics. Plala is strong in
broadband market, both in ADSL and fiber optics. Its 4th MEDIA IP-TV service is
cutting-edge TV broadcasting service using IP technology. Since cable TV is not
popular in Japan now, bundle service of cable TV on IP network, internet access, and
IP-phone is forecasted to be popular in a few years. This service is called “Triple
play”, and Plala is one of the first providers of “Triple play” service.
2003 ADSL Share
(Number of customer)
Yahoo!
BB
Others
17%
DION
ODN
2003 Internet Access Share
(Number of customer incl. ADSL)
Others
Sonet
Livedoor
7%
14%
7%
7%
11%
6%
Plala
6%
24%
6%
BIGLOBE
nifty
6%
15%
ODN
9%
13%
9%
7%
OCN
Yahoo!BB
Sonet
nifty
BIGLOBE
7%
OCN
8%
18%
DION
Plala
OCN, Plala:
NTT Group
nifty, BIGLOBE, Sonet:
Affiliates of electronics manufacturers. They are
subsidiaries of Fujistu, NEC, Sony, respectively.
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ODN, DION:
Founded by telecommunication companies. Japan Telecom and
KDDI, respectively.
Yahoo BB!
Founded by Softbank three years ago. Gained top share of ADSL
with destructively low price.
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Participants
Last Name
Bent
Duldulao
Early
Eguchi
Fujiki
Gu
Karkal
Lee
Schrader
Sherman
Yamashita
Yu
Last
Name
Bent
Duldulao
Early
Eguchi
Fujiki
Gu
Karkal
Lee
Schrader
Sherman
Yamashita
Yu
First Name
Geoff
Nester
Robert
Yasu
Aya
Zhaoyang
Shamir
Christine
Phillip
Nicholas
Yori
Kin
First
Name
Geoff
Nester
Robert
Yasu
Aya
Zhaoyang
Shamir
Christine
Phillip
Nicholas
Yori
Kin
E-mail
gbent@andrew.cmu.edu
nestord@cmu.edu
rearly@andrew.cmu.edu
yeguchi@andrew.cmu.edu
afujiki@andrew.cmu.edu
zygu@andrew.cmu.edu
skarkal@andrew.cmu.edu
chunghsl@andrew.cmu.edu
pschrade@andrew.cmu.edu
nds@cs.cmu.edu
yyamashi@andrew.cmu.edu
kiny@andrew.cmu.edu
PEK
Flight
ANA 905
NW 11
NW 11
CA102
CTL 89
NW 11
UA 889
PEK
13:35
21:20
21:20
16:00
15:00
21:20
17:55
NRT
Flight
ANA 956
ANA 956
ANA 956
NW 12
ANA 956
NW 12
ANA 956
NW 12
ANA 956
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Year
2008
2006
2006
2006
2006
Professor
2006
2006
2007
2008
2006
2006
PEK
8:50
8:50
8:50
9:05
8:50
9:05
8:50
9:05
8:50
NRT
13:00
13:00
13:00
13:20
13:00
13:20
13:00
13:20
13:00
China
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
11
Japan
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
10
US
Flight
UA 882
UA 882
UA 882
UA 882
NW 14
UA 884
US
17:50
17:50
17:50
17:50
15:40
15:20
ABA Asia Trip 2006
December 26, 2005
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