case 5 takemana komuten company
TRANSCRIPT
Case 5 –
Takenaka Komuten
Company LtdJulien NogueiraLuca Rosi
Introduction
Who are us and why are we here ?
Why do we made you come today ?
Are you ready ?
Overview
2 Companies
1 joint venture
An economic study
Takenaka Komuten, Osaka
-Kazuo Takenaka, Chairman
-Ruichi Takenaka, President-Kenji Taniguchi, Managing
director
Atlas Engineering & Constuction , United
States
Tom Jameson, President
Takenaka Komuten
A company based on a family
A company non-diversified
Need a new beginning
Exhibit 3: Ten-Year Growth Summary of Takenaka Komuten's Gross Sales (in billions of US$)
Exhibit 5: Breakdown of the Types of Construction
Exhibit 4: Contracts Awarded to Takenaka Directly and Through Negotiation
% No Negotiation
%Negotiation
1989
75.7 24.3
1990
72.6 27.4
Ten Year Growth of Gross SalesTanaka Komuten
1,5
1,6
1,7
1,8
1,9
2
2,1
2,2
2,3
2,4
1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991
Year
bill
ions
of U
S $
1989 1990
Offices 22.7 20.3Stores 13.1 6.4Hotels 4.8 7.5
Theaters 0.5 0.6Factories 12.2 14.1Housing 13.4 14.6Schools 9.6 10.6
Hospitals 5.6 3.6Gov’t buildings 1.6 1.4
Transport facilities
2.3 2.2
Other 14.2 18.7
Atlas Engineering & Construction
A company specialized in civil engineering
A complementary company with yours
Very good experience and reputation
Exhibit 6: Financial and Statistical Summary of Atlas Engineering & Construction (in millions of US$ except per share information)
Exhibit 7: Breakdown of the Types of Construction Undertaken by Atlas (percentages by sales)
Exhibit 8: Projects in Which Atlas Was the Sole Contractor (Percentages)
1987 1988 1989 1990 1991
ConsolidatedWorldwide Sales
742
754
1,05
1
1,27
4
1,88
9Earnings after tax 24 28 38 44 45
Earnings per share 2.17 2.50 3.30 3.37 3.40Overseas sales 298 301 337 371 378
Percent of total sales 40.2 39.9 32.1 29.1 20.0
1989 1990
Dams 13.7 11.8Bridges 23.5 26.4
Highways 4.0 5.4Energy plants 8.7 6.2
Runways 25.6 28.7Harbor facilities 7.4 9.3
Offshore platforms 5.7 6.1Other 11.4 6.1
1985
1986 1987 1988 1989 1990 1991
21.5
23.1 28.4 26.5 25.9 23.2 22.8
Joint venture
What is exactly a joint venture ?
Strenghts Weaknesses
- Diversification - More attractivity- Have new clients- Be more known- Earn more money in
global
- Share profits- One project will bring less
money- Communication - Management- Need time to be effective
DialogueJameson (Atlas) is talking to Taniguchi and Takenaka in Osaka
Atlas wants a joint venture with you“I think it should be fairly clear that a joint venture […]is a definite advantage for both of us.” “And with our collective experience and reputation, I really think we can turn this joint venture into a very profitable partnership.”
Takenaka is affraid to lost clients“Will our existing clients see it that way, or will they feel that Takenaka Komuten has gone the way of all major contractors?”
But Atlas will only make a joint venture in Japan with you
“Also, since we will not do any joint venture work in Japan, your domestic clients will not be at all affected”
Exhibit 1 : Jameson’s Proposal
AvantagesDisavantages
- Reducing the cost- Transparence to the client- A lot of diversifed project- Win competivity- 2 huge immediate prospects
- Yours clients can be confused- Investment Capital : US$ 500
000- Distribution of profit and loss- Work with the US culture
Statement of problem
Do Takenaka Komuten should accept the joint venture proposal from Atlas ?
Is there a real impact of the joint venture on the image of Takenaka Komuten ?
How can we develop Takenaka Komuten ?
Option 1 : Do not accept Don’t accept this offer and stay like you
are actually
-Takenaka family will be happy
-Reputation stays the same
- The company will not grow
- Possible lost of money
Option 2 : Accept it Accept this joint venture exactly like Jameson
propose it
-Company more known
-Diversify sectors
-Earn more money
-Easier for clients
-Big investissment ($500 000)
-Confused clients if they aren’t informed
-Affects Takenaka reputation
Option 3 : Accept it with negociation You can accept the offer but this time
profits are share 70%-30% for Takenaka
-Earn a lot of money
-Immediate prospects
-The company is diversify
-Easier for clients
- Confort the clients or the reputation will be affect
- Investissment but easily pay back
Option 4 : Diversify the company by yourselves
Don’t accept this deal but start developping other activities for Takenaka Komuten
- Possibly earn a lot of money
- Very good diversification
- New clients, new reputation
- Takenaka family will not be happy
- The reputation will never be the same
Option 5 : Buy Atlas Don’t accept the offer of joint venture
but buy Atlas Engineering & Construction
- A fresh start
- A lot of new projects
- A good challenge
- Takenaka family will definitively not be happy
- Clients will be confused
- Money needed
Let’s summarize
Option 1 : Stay like this, don’t take the offer Option 2 : Accept Jameson’s proposal (50-50%
profits) Option 3 : Accept Jameson’s proposal (70-30%
profits) Option 4 : Don’t accept the offer, re-invent the
company Option 5 : Don’t accept the offer, buy Atlas
Any questions ?