Management:
Hitachi Materials and Hitachi Cable, each
of which is a subsidiary of Hitachi, will merge next April to create a company
with sales of 1 trillion yen to compete successfully in the global market. Hitachi
Metals has about 40% share in the world market of high-performance metals for
electric vehicles. The company has a strong competitive edge in high-quality metallic
materials for autos, electric appliances, and industrial infrastructure. Hitachi
Cable has a strong presence in the market of cables for electric power
companies, but it has been in the red for five consecutive years because of
dwindling sales. The company enjoys competitive advantage in the construction
of social infrastructure including railway network and transmission network
that has great demand in developing countries.
Hitachi has been placed importance on independence
of each subsidiary. Each of Hitachi’s subsidiaries has a great presence in the
domestic market, but Hitachi’s subsidiaries are mostly not big enough to
compete in the global market. Hitachi acquired five of its subsidiaries through
TOB as part of its strategy to focus more on the IT and social infrastructure
business. This strategy improved Hitachi’s results dramatically and allowed
Hitachi to recorded net profit of about 350 billion yen in the fiscal year
ended in March 2012. However, GE of the U.S. and Siemens of Germany are far
ahead of Hitachi in the social infrastructure business. Needless to say, the strategy
to pursue economies of scale is one of the most critical factors to compete
successfully in the global market.
Hitachi Metals and Hitachi Cable merge to increase
presence in the world social infrastructure market
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