Takenaka Komuten Company

Summary

• I. Overview

• II. Synopsis and exhibits

• III. Overall situation

• IV. Atlas ingenering and construction

• V. Existing situation

• VI. Statement of problem

• VII. Options

Overview

• Japanese company located in Osaka

• Architecture engineering and construction firm

• Family business created in 1930

• Considered as one of the « Big Five » of the Japanese contractors

• Non diversified company: Specialized in design and bulding construction (less than 4% of its total sales dedicated to civil engineering)

Synopsis of Exhibits

• Exhibit 1: Summary of Jameson’s proposal to Takenaka Komuten

• Exhibit 2: Status of project undertaken by T.K.

• Exhibit 3: Growth summary Of T.K.’s gross sales

• Exhibit 4: Contracts awarded to T.K.

• Exhibit 5: Types of construction undertaken by T.K.

Synopsis of Exhibits

• Exhibit 7: Types of construction undertaken by Atlas

• Exhibit 8: Project in which Atlas was the sole contractor.

Overall

• 1990’s: Real estate market is stabilizing.

• Increase of market competition

• Increase of contracted projects

Exhibit 4

Exhibit 2

Overall

Exhibit 3

Overall

Strengthts Weaknesses

Reputation of excellence Not enough internationnal notoriety

Specialised Can’t compete with big corporation

Well established in their field Not enough diversified

Atlas Engineering and construction

• Civil engineering company based in San Francisco

• Already worked with Takaneka Komuten

• Interested in a Joint Venture Company

• Most of their contracts are shared with other companies

Atlas Engineering and Construction

Overall

Proposal of a joint venture between Takaneka Komuten and Atlas construction and Engineering.

The designing part would remain T.K’s field and the civil engineering part would belong to Atlas’.

The existing situation

Statement of Problem

• Knowing that the real estate market is decreasing, should Takenaka Komuten company form a joint venture with Atlas Construction and Engineering

even if it could sacrifice its reputation ?

Status Quo: T.K. doesn’t accept the joint venture and doesn’t change its activities

Advantages Drawbacks

They keep their reputation of specialisation

The company risks to slowly decline

They do not split their ressources

It is the solution that the takenaka’s family prefers

Option 2: T.K. refuses the joint venture but develops other sectors

Advantages Drawbacks

The compnay remains independant They split their ressources

If the contructing sector keeps on declining, there are some back up activities

The competition for other activities such as civil engineering is fierce. T.K. might not have sufficient ressources

Option 3: T.K. agrees the Joint Venture abroad with Atlas

Advantages Drawbacks

Diversification of their sectors They become dependant on Atlas for the foreign market

They already have prospects It can affect their good reputation if Atlas doesn’t have the same standards of quality

Expanding their business abroad while conserving their own market

They split their ressources

Option 4: T.K. mergers completly with Atlas.

Advantages Drawbacks

Diversification of their national and internationnal activities

Total loss of independance

They expend their portofolio It might affect substantially their reputation of excellence

Synergie effect Split gains and losses no matter the effort given by each company

Question

Which option would you choose and why?