Keiretsu

Prepared by:-Rohit Dobaria

Keiretsu

• A type of business group in Japan.

• A set of companies with interlocking businessrelationships and shareholdings.

There are three types of keiretsu:

• Kigyō shūdan - "horizontally diversified business groups“

• Seisan keiretsu - "vertical manufacturing networks“

• Ryūtsū keiretsu - "vertical distribution networks"

History

• Zaibatsu :– Pre World War – II

• Keiretsu :- Post World War – II

Zaibatsu Pyramidal Structure

Keiretsu Star Picture

Zaibatsu Vs. Keiretsu

Zaibatsu• Largely controlled by

funding families• Ownership - centralized

(heirarchical)

Keiretsu• Controlled by

professional managers• Decentralized (inter-

locking ownership)

Major Keiretsu

• Mitsubishi• Mitsui• Sumitomo• Fuyo• Sanwa• Dai-Ichi Kangyo

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 BreweryElectronics: Mitsubishi Electric, Mitsubishi PrecisionCars: Mitsubishi Motors, Mitsubishi Heavy Industries, Mitsubishi FusoPetroleum: Nippon Oil, Mitsubishi Oil, Mitsubishi Nuclear FuelPrecision 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 SteelShipping: Nippon Yusen

non-Japanese businesses are described as keiretsu

• Virgin Group (UK)• Tata Group (India)

Airline Alliances- Oneworld- Star Alliance

Toyota

• the biggest of the "vertically-integrated" keiretsu groups

•Toyota Industries Corporation (founded in 1926)•JTEKT Corporation (1935)•Toyota Motor Corporation (1937)•Toyota Auto Body, Co. Ltd. (1940)•Aichi Steel Corporation (1940)•Kanto Auto Works, Ltd. (1945)•Toyota Tsusho Corporation (1946)•Aisin Seiki Co., Ltd. (1949)•Toyoda Gosei Co., Ltd. (1949)•Denso Corporation (1949)•Toyota Boshoku Corporation (1950)•Towa Real Estate Co., Ltd. (1953)•Toyota Central R&D Labs., Inc. (1960)•Toyota Communication Systems Co., Ltd. (2001)•Toyota Financial Services Corporation (2000)•Daihatsu Motor Co (1907; Toyota owns 51% of the company since 1999.)•Hino Motors (diesel trucks and buses. Toyota owns 50.5% of the company since 2001.)•Toyofuji Shipping Co. (Shipping company for Toyota vehicles overseas)

Affiliates or partially owned companies:

•Kyoho kai group - Auto parts company - 211 companies.

•Kyouei kai group - Logistic/facility company - 123 companies.

•Fuji Heavy Industries, Ltd., manufacturer of Subaru automobiles. (Toyota owns 16.5% of the company.)

•Isuzu Motors Ltd. (Toyota owns 5.9% of the company.)

•Misawa Homes Holdings, Inc. (Toyota owns 13.4% of the company.)

•United Australian Automobile Industries (UAAI) - a joint venture between Toyota Australia and GM-Holden (1989 to 1996)

•New United Motor Manufacturing, Inc. (NUMMI) - a joint venture between Toyota and General Motors (1984)

•Primearth EV Energy Co (PEVE) - a joint venture between Toyota and Panasonic (1996)

Advantages of Keiretsu

• The mutual stockholding among the group members improves their stability

• Each group is supported by a bank• Promotes group cohesiveness and helps the

members to participate in large projects

Thank You