yamaha corporation (13035676)
TRANSCRIPT
-
8/17/2019 Yamaha Corporation (13035676)
1/13
Y A M A H A C O R P O R A T I O N
Word count:
UNIVERSITY OF THE WEST OF ENGLAND YAMAHA CORPORATION
International Management UMSCQX-15-M
!"0"#$%$
-
8/17/2019 Yamaha Corporation (13035676)
2/13
Int&rn't(on') M'n'*&+&nt
Yamaha Corporation
I. Introduction:
Yamaha Corporation is a Japanese multinational corporation with a wide range of products as
well as services. In 1887, Yamaha’s usiness was egan ! "ora#usu Yamaha, the founder
when repaired a ro#en reed organ in Japan. "en !ears later, 18$7, %ippon &a##i Co., 'td.
was estalished with the capital which was 1(( million Japanese !en. Yamaha Corporation
was the official name from 1$87 to mar# the 1((th anniversar! of its foundation. "oda!, with
7) susidiar! companies and nearl! *(,((( emplo!ees around the world, Yamaha ecomes a
worldwide #nown rand name.
"his essa! will mention and discuss the portfolio strategies of Yamaha since *(((. In detail,
portfolio mi+ and longterm potential of the compan! will e anal!-ed ! using portfolio
tools. oreover, the strategies of the competitors are also anal!-ed to suggest the suitale
decisions.
II. apping Yamaha’s /usiness 0ortfolio:
Yamaha operate in multiindustr! and multinational, therefore, multidivisional forms
form2 was mapped for Yamaha’s usiness portfolio Carrell et al 1$$72 3igure 12. 3or
development of the corporation, anal!sis, portfolio pla!s an important role which could
understand competitive position and the rate of return which received from usiness units
4enr! *(1(2. Corporation could ma+imi-e the return on investment ! allocating suitale
level of resources etween usiness units. "herefore, the general electric c5Inse! matri+
nine o+ matri+2 will e applied. "his method could assess the performance of usiness
units. 4owever, these usiness units were controlled ! corporate parent. "he fight, which
can create or destro! corporation’s value, etween the corporate parent characteristics and
opportunities in the usiness is an important element. In finding the usinesses which
corporate parent should ta#e into the portfolio, the parenting fit matrix will e used. 3inall!,
the corporation could decide to hold the units in the portfolio ! using the Market- Activated
Corporate Strategy Framework .
!
-
8/17/2019 Yamaha Corporation (13035676)
3/13
Int&rn't(on') M'n'*&+&nt
3igure 1. Yamaha’s form
/ase in Chandler 1$662 and Yamaha nnual eport *(1)
III. Corporate 9trateg!:
In 1$$(s, Yamaha was one of the largest corporation of musical instrument in the world,
accounting for nearl! a half of new musical euipment sales. ;ith a wide range of production
than an! other competitors, Yamaha was pursued a corporation strateg! of diversification.
Yamaha operate in man! usinesses and diversif! the organi-ation following oth
-
8/17/2019 Yamaha Corporation (13035676)
4/13
Int&rn't(on') M'n'*&+&nt
share technolog! and managerial model, reduce the costs, to e popular through rand name
usage, and enefit from cooperation &hoshal et al 1$$A2.
Yamaha has also operated in education, networ# devices, golf products, etc., Yamaha was into
unrelated new usiness that value chains are different which no potential e+ists to transfer
technolog! or management #nowhow from one usiness to another, to transfer competencies
to reduce costs, to achieve enefits, or comine similar activities "hompson and 9tric#land
*((?: *$)2.
;ith the appearance of Yamaha around the world, gloal diversification was applied.
ccording to 5im 1$8$2, the main reason for gloal diversification include the accession of
the new foreign mar#ets to discover the uniue assets of that mar#et, ualit! resources,
accession of lowercost, e+pand the economic scale and other efficiencies, and preoccup!
competitors.
4owever, there are man! ris#s and pitfalls of diversification. "he corporation has to divide
the time and energ! for the portfolio. "here is argument that parents ma! destro! some value
! increase overhead cost, slowl! decisions, some unsuitale interventions, and cannot add
enough value to compensate &oold and Campell *((*: *1$2. oreover, unsuccessful
susidiaries ma! use the resources from the success /erger and Bfe# 1$$)2. n important
issue of diversification is unsuitale interference of a corporate parent.It can affect adl! on
the susidiar! managers.
5e! competences:
"
-
8/17/2019 Yamaha Corporation (13035676)
5/13
Int&rn't(on') M'n'*&+&nt
3igure * Yamaha nnual eport *(1)2.
ccording to "ampoe 1$$A2, core competencies are the comination of technologies and
production s#ills which underlain a compan!’s production line. 3rom figure *, there is a seen
that Yamaha’s #e! competenc! is fields of sound and music. ;ith the histor! is more than
1*) !ears, Yamaha has much #nowledge and s#ills in their maor. "hrough identif!ing core
competencies, Yamaha #nows the core products which are an incarnation of one or more core
competencies ."his was proved through their revenue as well as a mar#et segment of sound
and music productions 3igure ?2.
"here is an argument that the successes of the corporation depend on the core competencies
which underlie their end products 0rahalad and 4amel 1$$(2. 3rom identif!ing the core
competencies, the corporation #nows what the main products which need to e innovated and
developed. It helps companies focus on the mar#et, find the effective wa!s to use the
4
-
8/17/2019 Yamaha Corporation (13035676)
6/13
Int&rn't(on') M'n'*&+&nt
resources and e+ploit the new usinesses. "hus, core competencies could give the potential to
access the variet! of mar#ets. oreover, it could ma#e the products ecome uniue which
most of customers reuired.
3igure ? Yamaha nnual eport *(1)2.
It can e seen that core competencies were uilt through a process of improvement and
enhancement. It will e the competitive advantage. corporation who missed to contriute
core competences, will e difficult to enter as well as maintain in the mar#et.
ID. 0ortfolio atri+:
'5 P'r&nt(n* 6t +'tr(:
ccording to Campell, &oold and le+ander 1$$)2, parenting mi+ matri+ was used to
evaluate how good the parent’s characteristics fit opportunities and the records of e+tending
#
-
8/17/2019 Yamaha Corporation (13035676)
7/13
Int&rn't(on') M'n'*&+&nt
of misfit these characteristics and critical success factors. "here is a tool to figure out the
opportunities to increase as well as the issues of destro!ing the value of Yamaha.
"o e defined as should e wellsuited to e+ploit and wellunderstood ! corporation,
heartland usiness should e the main of corporate strateg! and acuisition activit!. /!
contriuting 6).*> in segment sales proportion and nearl! 8A> in revenue, musical
instrument 2 is heartland usiness of Yamaha Corporation. ;ith the histor! and e+perience
more than 1*) !ears old, Yamaha was famous and e+pert on musical instruments.
Enderstanding the important as well as the role of this ranch of the corporation, Yamaha
process to estalish and e+pand optimal sales networ#s for each of musical instrument.
4owever, there was a downtrend in the side of music and Fnglishlanguage school F2 in
recent five !ears although the corporation has some activities to improve Yamaha annual
report *(11, *(1*, *(1?, *(1A, and *(1)2. It ma! fit with Yamaha’s approach ! long time
estalished 1$)A2. 4owever, the adding value is uite low so that Yamaha should e+amine to
divest this usiness if the price was suffered over the e+pected value of future cash flow.
"herefore, music and Fnglishlanguage should e in ballast categor!.
"urn to the side of audio euipment 2, there is a good usiness for Yamaha. lthough audio
euipment is not maor of Yamaha, it was developed uic#l!. "he reason could e that there
is some similar characteristics etween this usiness and musical instrument which depends
on an e+isting professional ac#ground of #nowledge aout sound and music. 3or the future,
Yamaha intends to develop this usiness ecome one of their maor usiness through
e+panding the mar#et into developed and emerging countries. "herefore, it can e seen as
edge heart business.
"here is a value trap business for Yamaha in semiconductors 92. It can e fitted with
parenting opportunities through their e+perience and #nowhow in sound, e+pertise in
developing digital musical instruments, signal technologies and soft wave technologies
Yamaha annual report *(1)2. 4owever, Yamaha ma! lac# of critical success factors. 3or
instance, there is a hard sector due to man! strong suppliers such as: Intel, 9amsung,
Gualcomm etc.
"he other usinesses of Yamaha which include: golf products, automoile interior wood
components, factor! automation and resort facilities B2, can e categori-ed as alien-territory
usiness. lthough these usinesses ma! not fit with Yamaha’s approach due to different,
$
-
8/17/2019 Yamaha Corporation (13035676)
8/13
Int&rn't(on') M'n'*&+&nt
there is a creation of potential value. "he! contriuted in the revenue as well as the rand
name of Yamaha.
9ource: dapted from . &oold, . Campell and . le+ander, Corporate 'evel 9trateg!,
;ile!, 1$$A.
3igure A. Yamaha’s parenting fit matri+.
75 N(n& 7o +'tr(:
%ine o+ matri+ was developed to set up the capital and resources for the usiness units.
"here are two dimensions: the attractiveness of the industr! and the units’ ailit! in the
industr!. It helps compan! #now what usinesses should e developed, maintained and
divested.
Musical instrument:
%
O
E
S
A
M
-
8/17/2019 Yamaha Corporation (13035676)
9/13
Int&rn't(on') M'n'*&+&nt
Yamaha has wellposition in the gloal musical instrument industr!. ;ith the e+periences as
well as #nowledge in this sector, Yamaha possesses high competitive strength. "he music
instrument industr! seems to e high attractiveness. "he gloal mar#et for musical
instruments industr! was forecasted to grow up. lthough there are threats from China
producers and 5awai which is a strong rand name in musical instrument, Yamaha still gains
the mar#et share and maintains the dominant position.
Audio euipment:
"here is medium competitive strength in audio euipment. lthough Yamaha e+pertise in the
musical field, electronic is not their strength. "he audio euipment mar#et is potential.
4owever, the attractiveness of audio euipment is medium. In particular, there are some
strong competitors in this field such as 9on!, 4itachi, etc.
!ducation:
Yamaha maintains the high competitive strength in this field. ;ith the e+perience and the
future plans that concentrate on e+panding music schools and conducting local music lessons
in China and other emerging countries, the position of Yamaha is reall! stale. China and
other emerging countries are reall! attractive. 4owever, there is a medium attractiveness
mar#et that so man! competitors are developing and e+panding such as 5awai etc.
Semiconductors:
"here is a low competitive strength for Yamaha. "he achievement from semiconductors
reuired large investments as well as huge #nowledge. 4owever, in the rapid development of
semiconductors, Yamaha is !oung compared to others. 3urthermore, with large investment in
technolog!, Yamaha could lose the positions in the other fields. "he attractiveness for
semiconductors is medium. lthough the mar#et is e+pected to grow radicall! in the future,
there are so man! strong companies in this field such as: Intel, 9amsung, %Didia etc.
"thers:
"he competitive position of this area is medium. lthough these usinesses are not Yamaha’s
maor, Yamaha has e+perience. "he attractiveness is low ecause there are so man! strong
rand names while there are niche mar#ets.
8
-
8/17/2019 Yamaha Corporation (13035676)
10/13
Int&rn't(on') M'n'*&+&nt
Sourc&: G)uc/ &t ') 920005 F(*ur& #5 Y'+';'
-
8/17/2019 Yamaha Corporation (13035676)
11/13
Int&rn't(on') M'n'*&+&nt
Ho?&&r@ (t r&u(r&d ;u*& (n&.t+&nt. -or d&&)o1(n*5 It .;ou)d 7&
con.(d&r&d '. ' 1r(or(t> -or .t'7)& 6n'nc&5= W(t; t;& 1ot&nt(') -or &duc't(on@ Y'+';' .;ou)d /&&1 t;(. 7u.(n&.. '.
.t'7)& 6n'nc(') '. ?&)) '. contr(7ut(n* 7r'nd n'+&5
= S&+(conductor. n&&d to 7& con.(d&r&d to d(&.t5 It t'/&. +'n> r&.ourc&.-ro+ t;& 1'r&nt5 A)t;ou*; (t ?()) n&&d -or (nt&rn') o1&r't(on.@ t;& co.t
cou)d 7& o&r t;& 7&n&6t. ?;(c; (t cou)d 7r(n* 7'c/5 Y'+';' cou)d
con.(d&r 7&co+(n* 1'rtn&r. o- t;& .tron* .&+(conductor co+1'n(&. (- t;(.
7u.(n&.. ?'. )(u(d't&d5= Ot;&r 7u.(n&.. cou)d 7r(n* .+')) ')u& -or Y'+';'5 It cou)d 7& con.(d&r&d
to +'(nt'(n 'nd (n&.t d&1&nd. on t;& 1'rt o- t;& contr(7ut(on5
A)t&rn't(&)>@ (t cou)d 7& )(u(d't&d (- t;& 7&n&6t. cou)d not co&r t;& co.t5
%atural Bwner
Bne of the pac#
4igh edium 'ow
Dalue Creation 0otential in /usiness Enit
9ource: &luc# et al *(((2
3igure 6: Yamaha’s C9 framewor#
#$ Strategy Moves and %esponse:
5awai usical Instruments anufacturing 5awai2 is a Japan compan! which maor in
manufacturing and selling musical instruments. It was estalished in 1$*7. %owada!s, 5awai
and Yamaha Corporation is dominating the piano gloal mar#et. "herefore, there is a
competition etween 5awai and Yamaha.
!0
t ( 0 &
A 7 ( ) ( t >
t o
E 2 t r ' c t V ' ) u &
A
M
E
O
S
-
8/17/2019 Yamaha Corporation (13035676)
12/13
Int&rn't(on') M'n'*&+&nt
Japan was used to the potential mar#et for piano when piano sales, in 1$7$, was ?((,(((
units. 4owever, it decreased and fallen to aout 17,((( units. "herefore, finding a new
potential mar#et to survive is an important mission.
5awai reali-ed the potential of the 9outheast sia mar#et, which middle class as well as
wealth! people are increasing and the demand for piano is growing. "he investment was
made for see#ing new mar#et and more resources. t the end of ugust *(1?, 5awai opened
the first compan! music school in Indonesia.
3orecasting the change of industr! as well as strategic moves from competitor, Yamaha
e+panded their influences on the piano mar#et of 9outheast sia. 9o man! ranches of
Yamaha were opened in 9outheast sia countries such as "hailand, Dietnam, and ala!sia
etc.
DI. F3FF%CF9:
thon! F. 4enr! *(1(2. &nderstanding Strategic Management$
/erger, 0hilip &., and Fli Bfe#. H@iversifications effect on firm value.H 'ournal of financial
economics ?7.1 1$$)2: ?$6).
Carrell, . ., Jennings, @. 3., 4eavrin, C. 1$$72. Fundamentals of organi(ational
behaviour . 0rentice 4all.
Chanler, @ 1$662 0roceedings of the merican 0hilosophical 9ociet! KonlineL. vailale
from: http:MMwww.amphilsoc.orgMsitesMdefaultMfilesM1)?(*1*.pdf Kccessed *) @ecemer
*(1)L.
Chan 5im, ;., 0eter 4wang, and ;illiam 0. /urgers. H&loal diversification strateg! and
corporate profit performance.H Strategic management )ournal 1(.1 1$8$2: A))7.
Campell, ndrew, ichael &oold, and arcus le+ander. HCorporate strateg!: "he uest
for parenting advantage.H *arvard business review 7?.* 1$$)2.
@avis, 0eter 9., et al. H/usiness unit relatedness and performance: loo# at the pulp and
paper industr!.H Strategic Management 'ournal 1?.) 1$$*2: ?A$?61.
&oold, ichael, and ndrew Campell. H0arenting in comple+ structures.H +ong %ange
,lanning ?).? *((*2: *1$*A?.
!!
-
8/17/2019 Yamaha Corporation (13035676)
13/13
Int&rn't(on') M'n'*&+&nt
&hoshal, 9umantra, and Christopher . /artlett. HCreation, adoption, and diffusion of
innovations ! susidiaries of multinational corporations.H 'ournal of nternational .usiness
Studies 1$882: ?6)?88.
&oold, ichael, ndrew Campell, and arcus le+ander. Corporate-level strategy:
Creating value in the multibusiness company. %ew Yor#: J. ;ile!, 1$$A.
&luc#, 3.;., 5aufman, 9.0., ;allec#, .9., c'eod, 5. 9tuc#e!, J. *(((2 /hinking
Strategically , Mc0insey1Company$
4amel, &ar!, and Coimatore 5. 0rahalad. H"he core competence of the corporation.H
*arvard business review 68.? 1$$(2: 7$$1.
ellahi, 5...F.'., 3r!nas, J.&.F.B..&.F. and 3inla!, 0..E.'. *(()2 2obal Strategic
Management . B+ford Eniversit! 0ress Inc, %ew Yor#.
"hompson, . Jr., and 9tric#land, J. . *((?2. 9trategic anagement: Concepts and Caes,
1?thedn. %ew Yor#: c&raw4ill2.
"ampoe, ahen. HF+ploiting the core competences of !our organi-ation.H +ong range
planning *7.A 1$$A2: 6677.
Yamaha Corporation *(1)2 Annual %eport 3456 KonlineL. vailale from:
http:MMwww.!amaha.comMaoutN!amahaMirMpulicationsMpdfdataM*(1)MannMan*(1)e.pdf
Kccessed *) @ecemer *(1)L.
!2
http://www.yamaha.com/about_yamaha/ir/publications/pdf-data/2015/ann/an-2015e.pdfhttp://www.yamaha.com/about_yamaha/ir/publications/pdf-data/2015/ann/an-2015e.pdf