A Japan trading company Essay
Mitsubishi Corporation (MC) is a Japan based largest general trading company. The company provides services a wide range of energy and other related services to its customers in the following industries like energy, metals, machinery, chemicals, food and general merchandise. The company is operating with over 200 bases spread across 80 countries around the world. The company’s business operations are carried through seven Business Groups along with 500 subsidiaries and affiliates.
The company is getting an advantage from its business operations through its diversified business segments globally. The company consolidated net income accounted for i?? 462. 8 billion in the fical year. MC operates through its seven business groups. The comapny’s Energy Business Group accounted for 20. 4% its total revenue for the fiscal year 2008, as followed by Metals Group (34. 2%), Machinery Group (14. 4%), Living Essentials Group (11%), Chemicals Group (7.5%), Industrial Finance, Logistics & Development Group (3. 8%) and Business Innovation Group (0. 2%).
In Japan, the company’s operating transactions increased to 18,150. 6 billion, as increase of 12. 0% over prenious year, resulted from higher metals and machinery-related transactions at the parent company as well as increased transactions at Metal One and the effect of new consolidations.
The company’s United States operating transactions increased to 1,600. 8 billion, an increase of 16.0%, by converting some food-related companies into subsidiaries. The company serves as Japan’s largest general trading company with over 200 operating bases in approximately 80 countries worldwide.
MC carries a wide spectrum of business operations and serves a broad range of customer base in various industries such as energy, metals, machinery, chemicals, food and general merchandise. In addition, MC is a part of the Mitsubishi Group of Companies, which is one of the world’s largest and most diversified businesses.
The company has additional financial backing from the conglomerates as well as R&D support, financial and technological backing from the multinational conglomerate. The company witnessed slight revenue down fall in few business segments as compared to the previous year 2007. The company’s Business Innovation Group dropped to 42% as result of the absence of fiscal 2007 gains on sales of shares, etc. The Industrial Finance, Logistics & Development Group decreased 44% of its revenue due to absence of fiscal 2007 gain on sale of Diamond City shares.
The Metals Group dropped 15% as a result of lower earnings at Australian coking coal subsidiary. The company is planning to enter into new business areas in the near future. This company is actively investing in the R&D and development of businesses. The company is principally focusing on five major growing business fields like nanotechnology and the electronics industry, the information and communication technology business, human care business, and media consumer business.
The company is expecting to exploit these avenues by adopting a ‘Vertical (Value Chain) Development Type business model, which includes investing in upstream and downstream businesses, shifting to the BPO model and venturing into new areas of R&D. The company has operational presence in Japan along with worldwide operations, where the company exposed to various foreign currency rates fluctuations relative to the yen as apart of its trading activities.
The company’s forward contracts and other hedging strategies may influenced by the foreign currency risk. In addition, the company received dividends from overseas businesses and equity in earnings of overseas consolidated subsidiaries and equity method affiliates are relatively high in proportion to its net income, and all these earnings are denominated in foreign currencies. The foreign currency exchanges of i?? 1 change relative to the U. S. dollar would have an approximate 2. 7 billion effect on consolidated net income.