Thursday, June 30, 2011

No. 5: Keywords are focusing and the global market. (June 30, 2011)

Hitachi once dubbed a “sinking big warship” is increasing the presence in the global market quite rapidly these days. The company renewed its record-high profit in the fiscal year ended March 2011 for the fist time in 20 years. What is the driving force that allows Hitachi to record such an astounding come back? It is unquestionably the strategy that places the highest importance on focusing and the global market.

Since Japan’s national railways was privatized in 1987, Hitachi has been accumulating infrastructure technology for the railway business, such as building aluminum body and digitalization of signals. Equipped with the accumulated state-of-the-arts technology, Hitachi cultivated the foreign markets consistently. The constant efforts started to yield results. Hitachi is expected to obtain an order for a high-speed railway construction project from Great Britain for 600 billion yen. It focuses on the infrastructure business, while keeping away from such fast-moving business as semiconductor and mobile phone. It avoided getting involved in business characterized by fierce price competition and the dog year speed.

Business analysts used to suggested that Hitachi should focus on its strengths, departing from the strategy to produce and market products from home electronics to heavy electric machinery. However, Hitachi knows its strengths very well. Hitachi’s strenuous efforts to develop infrastructure technology are totally based on the motor technology from which Hitachi originated. More than 50 years ago, Hitachi’s billboards declared that Hitachi means motors, and motors mean Hitachi. As always, the base of the development is the key technology of the company.

The world faces serious global environmental issues caused by increasing greenhouse gases emissions. It is imperative especially for advanced countries to reduce greenhouses gases emissions drastically. With the background of the world fear of oil depletion and global warming, the railway business attracts wide attention. The railway business involves lots of industrial fields, and stations are the places where people can find new way of life. It can safely be said that Hitachi’s strategy hit the mark.

Any company has to construct a strategy most suitable for the current business trend because time changes constantly. However, the fact remains that development should be based on company’s key technology and keywords should be focusing and the global market.