A Report On

KEIRETSU

INTERNATIONAL MARKETING

Submitted by:

SHASHANK P. SHANBHAG
CLASS II . Roll#25

A Report On
KEIRETSU
A Brief Introduction
A keiretsu is a set of companies with interlocking business relationships and shareholdings. It is a
type of business group.

There are three types of keiretsu:

 Kigyō shūdan ("horizontally diversified business groups"?)
 Seisan keiretsu ("vertical manufacturing networks"?)
 Ryūtsū keiretsu ("vertical distribution networks"?)

Keiretsu in Japan
The prototypical keiretsu are those which appeared in Japan during the "economic miracle"
following World War II. Before Japan's surrender, Japanese industry was controlled by large family-
controlled vertical monopolies called zaibatsu.

During the occupation of Japan, under the Supreme Commander of the Allied Powers, General
Douglas MacArthur, a partially successful attempt was made to dissolve the zaibatsu in the late
1940s. Sixteen zaibatsu were targeted for complete dissolution, and twenty six more for
reorganization after dissolution. However, the companies formed from the dismantling of the
zaibatsu were later reintegrated. The dispersed corporations were re-interlinked through share
purchases to form horizontally-integrated alliances across many industries. Where possible, keiretsu
companies would also supply one another, making the alliances vertically integrated as well. In this
period, official government policy promoted the creation of robust trade corporations which could
withstand heavy pressures from intensified world trade competition.[1]

The major keiretsu were each centered around one bank, which lent money to the keiretsu's
member companies and held equity positions in the companies. Each bank had great control over
the companies in the keiretsu and acted as a monitoring entity and as an emergency bail-out entity.
One effect of this structure was to minimize the presence of hostile takeovers in Japan, because no
entities could challenge the power of the banks.

There are two types of keiretsu: vertical and horizontal. Vertical keiretsu illustrates the organization
and relationships within a company (for example all factors of production of a certain product will be
connected), while a horizontal keiretsu shows relationships between entities and industries,
normally centered around a bank and trading company. Both are complexly woven together and
self-sustain each other.

Although the divisions between them have blurred in recent years, there are six major postwar
keiretsu:

A Report On
KEIRETSU
They are profiled as following.

MITSUBISHI
Bank
Mitsubishi Bank (until 1996)
Bank of Tokyo-Mitsubishi (1996–2005)
Bank of Tokyo-Mitsubishi UFJ (2006– )
Mitsubishi Trust and Banking

Major Group Companies

Financial: Mitsubishi Corporation, Tokio Marine and Fire Insurance, Mitsubishi Estate
Construction: Pacific Consultants International
Food: Kirin Brewery
Electronics: Mitsubishi Electric, Mitsubishi Precision
Cars: Mitsubishi Motors, Mitsubishi Heavy Industries, Mitsubishi Fuso
Petroleum: Nippon Oil, Mitsubishi Oil, Mitsubishi Nuclear Fuel
Precision Machinery: Nikon
Chemicals: Mitsubishi Chemical, Mitsubishi Gas Chemical, Mitsubishi Rayon Co., Ltd.,
Mitsubishi Materials Corp., Mitsubishi Plastics Industries, Asahi Glass, Nippon Synthetic
Chemical Industries (Nippon Gosei)
Paper: Mitsubishi Paper Mills Ltd.
Iron and Steel: Mitsubishi Steel
Shipping: Nippon Yusen

MITSUI
Bank
Mitsui Bank (until 1990)
Sakura Bank (1990–2001)
Sumitomo Mitsui Bank (2001– )

Major Group Companies

Financial: Mitsui Real Estate, Mitsukoshi
Food: Nippon Flour Mills, Mitsui Sugar, Suntory
Chemicals: Fuji Photo Film, Mitsui Toatso Chemicals, Mitsui Petrochemical Industries,
Toagosei Chemical Industries, Denki Kagaku Kogyo, Daicel Chemical Industries, Mitsui
Pharmaceuticals, Mitsui Toatsu Fertilizers, Mitsui Toatsu Dyes, Toray
Petroleum: General Sekiyu, Kyokuto Petroleum Industries
Electronics: Yaussa Corporation, Ibiden Company, Toshiba
Iron and Steel: Japan Steel Works

A Report On
KEIRETSU
SUMITOMO
Bank
Sumitomo Bank (until 2001)
Sumitomo Mitsui Bank (2001– ),
Sumitomo Trust and Banking

Major Group Companies

Food: Asahi Breweries
Rail: Hanshin Railway, Keihan Railway, Nankai Railway
Cars: Mazda
Electronics: NEC
Iron and Steel: Sumitomo Metals
Financial: Sumitomo Real Estate
Infrastructure: Nippon Koei

FUYO
Bank
Fuji Bank (until 2000)
Mizuho Bank (2000– )
Yasuda Trust and Banking
Yamaichi Securities

Major Group Companies

Food: Nisshin Flour Milling, Sapporo Breweries
Machinery: Canon, Hitachi, Ricoh
Financial: Marubeni
Chemicals: Showa Denko, NOF Corporation, Kureha Chemical Industries, Nippon
Sanso, Hitachi Chemical, Asahi Kasei
Rail: Tobu Railway
Vehicles: Yamaha, Nissan
Retail: Matsuya

A Report On
KEIRETSU
DAI-ICHI KANGYO (DKB)
Bank
Dai-Ichi Kangyo Bank (until 2000)
Mizuho Bank (2000– )
Kankaku Securities
Orient Group

Major Group Companies

Electronics: Fujitsu, Hitachi, Fuji Electric, Yaskawa Electric, Nippon Columbia
Cars: Isuzu, Kawasaki Heavy Industries
Power Generation: Tokyo Electric Power
Petroleum: Showa Shell Sekiyu
Precision Machinery: Asahi Optical
Trading and Commerce: Seibu, Itochu,
Iron and Steel: Kawasaki Steel, Japan Metals
Chemicals: Denki Kagaku Kogyo-Mitsui Group, Nippon Zeon, Asahi Denka Kogyo,
Sankyo Co., Lion Corporation, Kyowa Hakko Kogyo, Asahi Chemical Industries

SANWA ("MIDORIKAI")
Bank
Sanwa Bank (until 2002)
UFJ Bank (2002–2006)
Bank of Tokyo-Mitsubishi UFJ (2006– )
Toyo Trust and Banking

Major Group Companies

Food: Itoham Foods, Suntory
Rail: Hankyu Railway, Keisei Railway
Steel: Kobe Steel,
Precision Machinery: Konica Minolta, Hoya Corporation
Petroleum: Cosmo Oil
Electronics: Hitachi Ltd., Iwatsu Electric, Sharp Corporation, Nitto Denko, Kyocera
Trading and Commerce: Takashiama, Orix,
Chemicals: Ube Industries, Tokuyama Corp, Hitachi Chemical, Sekisui Chemical,
Kansai Paint, Tanabe Seiyaku, Fujisawa Pharmaceutical, Daiso Co., Teijin, Unitika
Fukusure
Cars: Hitachi Zosen Corp., Daihatsu
Retail: Takashimaya
Cinema: Toho
Shin-Maywa

A Report On
KEIRETSU
TOKAI (TOYOTA GROUP)
Bank
Tokai Bank
Chuo Trust

Major Group Companies

Food: Kagome
Cars: Suzuki Motor, Toyota
Steel: Daido Steel
Precision Machinery: Ricoh
Petroleum: Idemitsu Kosan
Electronics: Ushio Industries
Trading and Commerce: Matsuzakaya

IBJ
Bank
Industrial Bank of Japan,
New Japan Securities
Wako Securities
IBJ Securities

Major Group Companies

Cars: Fuji Heavy Industries
Precision Machinery: Ikegai, Riken
Chemicals: Nippon Soda, Chisso Corporation, Nissan Chemical, Tosoh Corporation,
Hodogaya Chemical, Plas-Tech, Taihei Chemical, Japan Organo, Kuraray

Bibliography
1. http://en.wikipedia.org/wiki/Keiretsu#Keiretsu_in_Japan
2. http://www.investopedia.com/articles/economics/09/japanese-keiretsu.asp
3. http://www.polska-azja.pl/2009/12/02/what-are-the-major-characteristics-and-functions-
of-the-japanese-keiretsu-%E7%B3%BB%E5%88%97-how-and-why-are-these-changing-
today/

A Report On
KEIRETSU