Asian Business - Case Study of Mitsui - Essay Example

On The Mitsui Group” The Mitsui Group is one of the oldest and most established conglomerates in Japan. It is also one of the largest publicly tradedcompanies in the world, with its stock symbol listed on the prestigious NASDAQ Global Select Market and currently trading at $471.72 a share (NASDAQ, 2008) The company traces its roots back to the 1673, when Mitsui Takatoshi opened a kimono shop in Nihonbashi, a district located in Edo (now modern-day Tokyo). From the very beginning, Mitsui established itself as an innovator in the business arena by promulgating revolutionary business practices that were unheard of in Japan at the time.

The prevailing procedure during that era was that products were made to order, and Mitsui defied common business sense by making products first and then selling them. Mitsui’s initial foray into the banking and finance industry came in the late 17th century. Moving money between cities during that feudal era was extremely risky, so Mitsui established “money exchanges” in Edo. Much like a primitive precursor to a Western Union, these establishments accommodated the transfer of funds and reduced the amount of risk involved in the transaction( Shinjo, 1962 11) By 1876, the company had established Mitsui Bank, which was the nation’ first private bank.

Running up to the early 20th century, the company came to be known as one of the largest zaibatsu in Japan. A prominent feature of pre-World War II Japan, a zaibatsu can be loosely defined as “ a business entity composed of several diversified enterprises owned and exclusively controlled by a single family “( Morikawa, 1970:62) These ironclad monopolies enabled the company to be a central business figure in pre-war Japan. Picking up the pieces after the war, the remnants of the companies from the dismantled Mitsui zaibatsu reformed themselves into the so-called economic miracles of the postwar era, the keiretsu.

Resembling the functional equivalent of a western conglomerate, the reformed business group was launched with a capitalization of 195,000 yen and roughly 35 employees. Its forays into foreign trade greatly furthered the country’s post-war economic rebirth. In the 1960’s Mitsui took advantage of rapid trade liberalization, and was successful in securing a stable supply of food, oil, and coal for domestic use coursed through its overseas holdings. An investment into natural gas resources in the 1970’s shielded the company from the decade’s oil crisis, and helped blunt the effects of the worldwide economic downturn.

(Mitsui, 2008) Today, the company is one of the primary driving forces behind Japan’s robust economy. It has pertinent business dealings in sales, manufacturing, importing/exporting, mining, electronics, food, fashion, energy, and transportation among others.. It employs nearly 42,000 employees in159 offices, spread out in over 67 countries worldwide (Mitsui, 2008) Among its numerous subsidiaries, the most well-known are Mitsui O.S.K Lines and Mitsui Gold. Mitsui O.S.K. Lines is their influential international shipping line, its alligator logo a common fixture in ports worldwide.

Mitsui Gold on the other hand is its business unit by which it conducts dealings with in the precious metal markets, a highly profitable venture which traces its roots to the 1970’s. The company’s current President and CEO is Shoei Utsuda, who at age 59 was unexpectedly thrust into the leadership of Japan’s 2nd largest conglomerate after a series of scandals forced a major executive overhaul. He has introduced widespread reforms within the company, and is known for his stern and disciplined demeanor in his dealings.

Bibliography 1. Nasdaq Stock Market, Live Quotes: MITSY. Viewed on April 13, 2008 2. Shinjo,Hiroshi (1962). History of the Yen: 100 Years of Japanese Money-economy. Research Institute for Economics & Business Administration, Kobe University.3. Morikawa, Hidemasa (1970) The Organizational Structure of Mitsubishi and Mitsui Zaibatsu, 1868-1922: A Comparative Study .The Business History Review, Vol. 44, No. 1, Japanese Entrepreneurship pp. 62-834. Mitsui & Co, (2008) Corporate Profile Viewed on April 13, 2008