Keiretsu

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Keiretsu - a type of business groups in Japan. The presentation contains information about its types and its important features.

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Keiretsu

  1. 1. Keiretsu Prepared by:- Rohit Dobaria
  2. 2. Keiretsu <ul><li>A type of business group in Japan. </li></ul><ul><li>A set of companies with interlocking business </li></ul><ul><li>relationships and shareholdings. </li></ul>
  3. 3. There are three types of keiretsu: <ul><li>Kigyō shūdan - &quot;horizontally diversified business groups“ </li></ul><ul><li>Seisan keiretsu - &quot;vertical manufacturing networks“ </li></ul><ul><li>Ryūtsū keiretsu - &quot;vertical distribution networks&quot; </li></ul>
  4. 4. History <ul><li>Zaibatsu :– Pre World War – II </li></ul><ul><li>Keiretsu :- Post World War – II </li></ul>
  5. 5. Zaibatsu Pyramidal Structure
  6. 6. Keiretsu Star Picture
  7. 7. Zaibatsu Vs. Keiretsu <ul><li>Zaibatsu </li></ul><ul><li>Largely controlled by funding families </li></ul><ul><li>Ownership - centralized (heirarchical) </li></ul><ul><li>Keiretsu </li></ul><ul><li>Controlled by professional managers </li></ul><ul><li>Decentralized (inter-locking ownership) </li></ul>
  8. 8. Major Keiretsu <ul><li>Mitsubishi </li></ul><ul><li>Mitsui </li></ul><ul><li>Sumitomo </li></ul><ul><li>Fuyo </li></ul><ul><li>Sanwa </li></ul><ul><li>Dai-Ichi Kangyo </li></ul>
  9. 9. Mitsubishi Mitsubishi Bank (until 1996) Bank of Tokyo-Mitsubishi (1996–2005) Bank of Tokyo-Mitsubishi UFJ (2006– ) Mitsubishi Trust and Banking Financial : Mitsubishi Corporation, Tokio Marine and Fire Insurance, Construction : Pacific Consultants International Food : Kirin Brewery Electronics : Mitsubishi Electric, Mitsubishi Precision Cars : Mitsubishi Motors, Mitsubishi Heavy Industries, Mitsubishi Fuso Petroleum : Nippon Oil, Mitsubishi Oil, Mitsubishi Nuclear Fuel Precision Machinery : Nikon Chemicals : Mitsubishi Chemical, Mitsubishi Gas Chemical, Mitsubishi Rayon Co., Ltd., Mitsubishi Materials Corp., Mitsubishi Plastics Industries, Asahi Glass, Nippon Synthetic Chemical Industries Paper : Mitsubishi Paper Mills Ltd. Iron and Steel : Mitsubishi Steel Shipping: Nippon Yusen
  10. 10. non-Japanese businesses are described as keiretsu <ul><li>Virgin Group (UK) </li></ul><ul><li>Tata Group (India) </li></ul><ul><li>Airline Alliances </li></ul><ul><li>Oneworld </li></ul><ul><li>Star Alliance </li></ul>
  11. 11. Toyota <ul><li>the biggest of the &quot;vertically-integrated&quot; keiretsu groups </li></ul>
  12. 12. <ul><li>Toyota Industries Corporation (founded in 1926) </li></ul><ul><li>JTEKT Corporation (1935) </li></ul><ul><li>Toyota Motor Corporation (1937) </li></ul><ul><li>Toyota Auto Body, Co. Ltd. (1940) </li></ul><ul><li>Aichi Steel Corporation (1940) </li></ul><ul><li>Kanto Auto Works, Ltd. (1945) </li></ul><ul><li>Toyota Tsusho Corporation (1946) </li></ul><ul><li>Aisin Seiki Co., Ltd. (1949) </li></ul><ul><li>Toyoda Gosei Co., Ltd. (1949) </li></ul><ul><li>Denso Corporation (1949) </li></ul><ul><li>Toyota Boshoku Corporation (1950) </li></ul><ul><li>Towa Real Estate Co ., Ltd. (1953) </li></ul><ul><li>Toyota Central R&D Labs., Inc. (1960) </li></ul><ul><li>Toyota Communication Systems Co., Ltd. (2001) </li></ul><ul><li>Toyota Financial Services Corporation (2000) </li></ul><ul><li>Daihatsu Motor Co (1907; Toyota owns 51% of the company since 1999.) </li></ul><ul><li>Hino Motors (diesel trucks and buses. Toyota owns 50.5% of the company since 2001.) </li></ul><ul><li>Toyofuji Shipping Co. (Shipping company for Toyota vehicles overseas) </li></ul>
  13. 13. <ul><li>Affiliates or partially owned companies: </li></ul><ul><li>Kyoho kai group - Auto parts company - 211 companies. </li></ul><ul><li>Kyouei kai group - Logistic/facility company - 123 companies. </li></ul><ul><li>Fuji Heavy Industries, Ltd., manufacturer of Subaru automobiles. (Toyota owns 16.5% of the company.) </li></ul><ul><li>Isuzu Motors Ltd. (Toyota owns 5.9% of the company.) </li></ul><ul><li>Misawa Homes Holdings, Inc. (Toyota owns 13.4% of the company.) </li></ul><ul><li>United Australian Automobile Industries (UAAI) - a joint venture between Toyota Australia and GM-Holden (1989 to 1996) </li></ul><ul><li>New United Motor Manufacturing, Inc. (NUMMI) - a joint venture between Toyota and General Motors (1984) </li></ul><ul><li>Primearth EV Energy Co (PEVE) - a joint venture between Toyota and Panasonic (1996) </li></ul>
  14. 14. Advantages of Keiretsu <ul><li>The mutual stockholding among the group members improves their stability </li></ul><ul><li>Each group is supported by a bank </li></ul><ul><li>Promotes group cohesiveness and helps the members to participate in large projects </li></ul>
  15. 15. Thank You

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