CONFIDENTIALBrownGoodsandPCCompetitorAnalysis:

ToshibaSAMSUNGELECTRONICSCHINA(SECChina)August20,2001Thisreportissolelyfortheuseofclientpersonnel.Nopartofitmaybecirculated,quoted,orreproducedfordistributionoutsidetheclientorganizationwithoutpriorwrittenapprovalfromMcKinsey&Company.ThismaterialwasusedbyMcKinsey&Companyduringanoralpresentation;itisnotacompleterecordofthediscussion.SECChina010821BJ-ToshibaCONFIDENTIALBrownGoodsandPCOVERVIEWOFCOMPETITORANALYSISFRAMEWORK1.BackgroundinformationLocationRegistered

capitalManagement

teamEquity

structureStartingyearNumberof

employeesEraanalysis4.Valuechainstrategy5.Organizationandownership6.FinancialperformanceFocusonMarketing,

advertisingand

promotionDistribution(channel

andsalesforce)OrganizationstructureOwnershipstructureSalesProfit2.Strategy3.Product/marketMissionVisionCorporatestrategyKeyproductofferingsMarketposition1SECChina010821BJ-ToshibaOVERVIEWOFCOMPETITORANALYSIBACKGROUNDINFORMATION1.BackgroundinformationLocationRegistered

capitalManagement

teamEquity

structureStartingyearNumberof

employeesEraanalysis4.Valuechainstrategy5.Organizationandownership6.FinancialperformanceFocusonMarketing,

advertisingand

promotionDistribution(channel

andsalesforce)OrganizationstructureOwnershipstructureSalesProfit2.Strategy3.Product/marketMissionVisionCorporatestrategyKeyproductofferingsMarketposition2SECChina010821BJ-ToshibaBACKGROUNDINFORMATION1.BackgSource:Toshibawebsite,LitsearchBACKGROUNDINFORMATION–TOSHIBAEstablished:1875byHisashigeTanakaPresident&CEO:TadashiOkamuraTotalAssets:US$51,578millionShareholders’Equity: US$10,054millionNumberofemployees:190,000worldwide(AsofSeptember30,2000)DomesticPlants,BranchesOfficesAndOtherFacilities:Productionfacilities:25Branchoffices:35Salesoffices:23OverseasPlants,BranchesOfficesandOtherFacilities:Offices:10Manufacturingcompanies:42Subsidiaries&affiliates:723SECChina010821BJ-ToshibaSource:Toshibawebsite,Lits標(biāo)桿企業(yè)分析課件電子教案Source:CompanyReport,LitsearchTOSHIBA’SCORPORATEMANAGEMENTTEAMPresident&CEOTadashiOkamuraCorporateprojectCorporatestaffCorporatesupportservices

iValueCreationCompanyCEO:TsutomuKawada

e-SolutionsCompanyCEO:HirooOkuhara

SocialInfrastructureSystemsCompanyCEO:TsuyoshiKimura

DigitalMediaNetworkCompanyCEO:AtsutoshiNishida

MobileCommunicationsCompanyCEO:TetsuyaMizoguchi

PowerSystems&ServicesCompanyCEO:ToshiyukiOshima

SemiconductorCompanyCEO:TakeshiNakagawa

DisplayDevices&ComponentsCompanyCEO:EisaburoHamano

MedicalSystemsCompanyCEO:MasamichiKatsurada

HomeAppliancesCompanyCEO:MakotoNakagawa5SECChina010821BJ-ToshibaSource:CompanyReport,Litse

Source: Companywebsite,LiteratureSearchHISTORYOFTOSHIBA6SECChina010821BJ-Toshiba HISTORYOFTOSHIBA6SECChina

Source: LiteratureSearch;McKinseyAnalysisTOSHIBA’SDEVELOPMENTWENTTHROUGHTHREESTAGESOrganizationstructure

Corporatestrategy

ProductDevelopment&Technology

1875-1939TwoJapaneseelectricalequipmentmanufacturersmergedin1939tocreateToshiba.Technologicalinnovationaccountedforthecompanies’successes.Oneofthefounderswastheso-calledEdisonofJapan.Mainproductsincludedtransformers,electricmotors,lightbulbs,radioreceivers,andcathode-raytubes.1978-PRESENT1939-1978Thecompanygrewrapidlyandbecameamarketleaderintheelectricalandelectronicindustry.However,theorganizationbecamemorebureaucratic.Thecompanycontinuedtobeinnovativeintheearlyyears,producingmanyfirstsintheindustry.However,Itlostitsinnovatorimageinthe70’s.Numerousleadingproductsintheelectricalandelectronicsareas.ExamplesincludesJapan’sfirstvacuumcleaner,firstfluorescentlamp,firstradar,etc.ToshibashifteddirectionbyinvestingheavilyinITsegment.Theorganizationbecameincreasinglyglobal,employing190,000employeesworld-widewithannualsalesover￥5trillion.ITfocus,diversification,innovationandglobalizationarefourkeyelementsofToshiba’scorporatestrategy.ToshibaisintensivelyfocusingonIT-relatedbusiness(i.e.telecomandinternet),meanwhile,leveragingitslegacybusinessestogeneratestableincomeBusinessBuildingBecomingIndustryLeaderMeetingworldwidecompetition7SECChina010821BJ-Toshiba TOSHIBA’SDEVELOPMENTWENTT

Source: LiteratureSearch;McKinseyAnalysisDEVELOPMENTOFDALIANTOSHIBA’STVBUSINESSINCHINAKeyinitiative

Keyresults

1996-1997Foundedasajointventurein1996,constructionwascompletedin1997.Conductedaccuratemarketforecastandimplementedjustinorderinventorymanagement.Inventoryturn-overlessthantwodays.Madeprofitthenextyear.20011998-2000FocusedonhighprofitmarginPJTVsegment,andcompetedontechnology,serviceandmanagementratherthanprice.StrengthenedcustomerserviceRevenueandprofitgrew50%annually.BecametheNo.1marketshareleaderinPJTVsegment.ToshibadecidedtorelocateitsdigitalTVproductiontoDalianandinvested￥300milliontoexpandcapacityfromonemillionunitsto1.5millionunitsexported800,000unitstoJapan.

BusinessBuildingEstablishingLeadershipinPJTVMarketBecomingToshiba’sKeyGlobalTVProductionBase8SECChina010821BJ-Toshiba DEVELOPMENTOFDALIANTOSHIBTOSHIBAWILLFURTHERINVESTINITINDUSTRYINCHINABackgroundinformation

Source: Literatureresearch,interview "TosupportChina's10th5-yearplan,wewillenlargeourinvestmentinITindustry….Toshibahastheworld-leadingLCDrelatedandsemiconductortechnology.TheamountofeachinvestmentwillexceedIbillionUSD."“ApartfromJapan,Toshibadividesglobalmarketintofourregions,America,Europe,ChinaandtherestofAsia.Chinaistheonlyregionmadeupofonesinglecountry"ChiefrepresentativeofToshibainChinaInvestedcompaniesinChinaTotalinvestmentChiefrepresentativeTotalnumberofemployeesImportanceofChinaFutureinvestmentplan23RMB6billionPintianxinzheng(pinyin)over10,000ChiefrepresentativeofToshibainChina

Source: literatureresearch,interview9SECChina010821BJ-ToshibaTOSHIBAWILLFURTHERINVESTINTOSHIBAISTHELEADINGPLAYERINNOTEBOOKMARKETBOTH

INCHINAANDGLOBALLYTimeKeymilestones198519901993199419992000IntroducedthefirstnotebookintheworldIntroducedSTNnotebookIntroducedcolorTFTnotebookIntroducedPentium-empowerednotebookRankednumberoneinChinanotebookmarketfor4yearsRankednumberoneinworldwidenotebookmarketfor7yearsEraanalysisofToshibainNotebook

Source: literatureresearch,interview10SECChina010821BJ-ToshibaTOSHIBAISTHELEADINGPLAYERSTRATEGY1.BackgroundinformationLocationRegistered

capitalManagement

teamEquity

structureStartingyearNumberof

employeesEraanalysis4.Valuechainstrategy5.Organizationandownership6.FinancialperformanceFocusonMarketing,

advertisingand

promotionDistribution(channel

andsalesforce)OrganizationstructureOwnershipstructureSalesProfit2.Strategy3.Product/marketMissionVisionCorporatestrategyMarketpositionKeyproductofferings11SECChina010821BJ-ToshibaSTRATEGY1.BackgroundinformatTOSHIBA’SMISSIONANDVISIONCorporatemission“We,theToshibaGroupcompanies,basedonourtotalcommitmenttopeopleandtothefuture,aredeterminedtohelpcreateahigherqualityoflifeforallpeople,andtodoourparttohelpensurethatprogresscontinueswithintheworldcommunity"Corporatevision“Togrowwithexcellenceastheleading-edge,internet-readyenterprisegloballybyacceleratinginnovationwithagility,andtocreatea21stcenturyofsuccesshandinhandwithourcustomers"

Source:Companywebsite,Litsearch.12SECChina010821BJ-ToshibaTOSHIBA’SMISSIONANDVISIONCoTHREESTRATEGIESPROPELTOSHIBATOBECOMEAGLOBALHI-TECHLEADERINTHENEWMELLIMUMToshibaasaleading-edge,internet-readygloballeaderinhi-techAcceleratethespeedofinnovationManagementInnovation(MI2001)isamajorinitiativebeingpromotedthroughoutToshibaGroup.ItisaimedatadvancingcreativedestructionandcompetitivesuperiorityChampionmarket-centricmanagementCustomerRelationshipManagementandSupplyChainManagementsystemswillbedeployedtocovercompany-wideoperations.Beinternet-readyDigitalManufacturing,anewsystem,willbeintroducedthroughouttheToshibaGroupAnITinfrastructureforcollaborativeengineeringwillbeestablished

Source:Litsearch,externalinterviews:ToshibaAnnualReport13SECChina010821BJ-ToshibaTHREESTRATEGIESPROPELTOSHIBASSESSMENTOFTOSHIBA'SCURRENTSTRATEGICPOSITION–SWOTStrengthsBroadanddiversifiedproductportfolioStrongpresenceinAsiaStrongR&DandmanufacturingcapabilitiesWeaknessesLesscustomerfocusedWeakbrandnameincutting-edgeinformationtechnologiesUnbalancedglobalpresenceOpportunitiesGlobaldigitalconvergenceEmergingtechnologies,

i.e.,Internet,3GChinajoiningWTOopensdoorstoforeigncompaniesThreatsBureaucraticmanagementstyleItscoresemiconductorbusinessisacyclicalcommoditybusinessBehindthecurveinkeyITdevelopments14SECChina010821BJ-ToshibaASSESSMENTOFTOSHIBA'SCURRENTHEREARETWOSUCCESSFULMODELSINTHECHINACTVMARKET,DALIANTOSHIBAFOLLOWSTHESONYMODELTheKonkaModelCapitalintensive,aggressivegrowththrougheconomiesofscaleinmanufacturingandinthesalesforceFrom1993to1998KonkaacquiredTVmanufacturers:NortheastDuDanJian,SanXi,AnSuo,ChongQingfactoriestobulkupGrewcapacityby2millionunitsfrom1993to1998ThrougheconomicsofscaleandaggressivepricingKonkawasabletogrowmarketsharefrom3%to11%from1995to2000TheSonyModelZeroinonthehighend,highprofitsegmentofCRTTVmarketwithastrongbrandabletocommandpricepremiumsNotinastrongpresenceinunitmarketshare,butthetopbrandwhenconsumersrespondforthebrandqualityandreliabilityCorporatephilosophyunwillingtosacrificeprofitsforlargermarketshare(vastdifferentfromChineseplayers)Futuretargetfocusedonhigherend,cuttingedgetechnologyTVse.g.PJTV,DigitalTV,LCDandPDPwhichhavesignificantlyhigherprofitmargins.

Source:Litsearch,McKinseyanalysis15SECChina010821BJ-ToshibaTHEREARETWOSUCCESSFULMODELTOSHIBASHIFTSITSSTRATEGICFOCUSTOAPPLICATIONSOLUTIONANDCUSTOMERSERVICEINCHINANOTEBOOKMARKETMissionTobethemostresponsibleITproductapplicationsolutionandserviceproviderTimeStrategicfocus1996199719981999ProductitselfChanneldevelopmentApplicationCustomerservice2000VIPcertificationfocusingoncorecustomersChanneldevelopmentinto2ndtiergeographiesApplicationsolutionof"mobileoffice"conceptToshibanotebookstrategy*inChinaStrategyevolvement *ToshibanotebookstrategyinChinaisco-developedbyDigitalChina,Toshiba’sexclusivenotebookchief-distributorinChina Source: literatureresearch,interview16SECChina010821BJ-ToshibaTOSHIBASHIFTSITSSTRATEGICFPRODUCT/MARKET1.BackgroundinformationLocationRegistered

capitalManagement

teamEquity

structureStartingyearNumberof

employeesEraanalysis4.Valuechainstrategy5.Organizationandownership6.FinancialperformanceFocusonMarketing,

advertisingand

promotionDistribution(channel

andsalesforce)OrganizationstructureOwnershipstructureSalesProfit2.Strategy3.Product/marketMissionVisionCorporatestrategyKeyproductofferingsMarketposition17SECChina010821BJ-ToshibaPRODUCT/MARKET1.BackgroundinTOSHIBA’SGLOBALNETSALESBYBUSINESSSEGMENT

Source: Toshibawebsite,LitSearchYea2000(￥billion)Information&Communications&IndustrialSystems￥1,858PowerSystems￥571ElectronicDevices&Components￥1,477DigitalMedia￥1,518HomeAppliances￥660Others￥47318SECChina010821BJ-ToshibaTOSHIBA’SGLOBALNETSALESBYDALIANTOSHIBA'sKEYTVPRODUCTOFFERINGSColorTVs(inch,modelno.)ProjectionTVSeries:43’–61’61D9UXC50D9UXC43D9UXC50D8UXC43D8UXC

Source: Companywebsite,LitsearchCRTTVSeries:21’–29’29D2DC29D2XC25D2XC25E3DC321D2NC

FlatTVSeries:21’–34’34D8UXC34D6DC29D8UXC29D6DC29D3XC25D6XC21AF6C

19SECChina010821BJ-ToshibaDALIANTOSHIBA'sKEYTVPRODUCDALIANTOSHIBA’SMARKETPOSITIONINCHINA’SCONVENTIONALCRTTVMARKET:NO.5MARKETSHARELEADERMarketsharebysales,%

Source: GFK,McKinseyAnalysis,Externalinterviews:Konka,Sony,Toshiba19992000Others100%100%KeytrendsRationaleIndustryundergoesfurtherconsolidationForeignplayerslosemarketsharetolocalplayersTopfiveplayersinthemarket–Changhong,TCl,Konka,Hisense,Skyworth,controlled41.6%ofthemarketin1999grewto43.7%in2000Localplayersincreasedmarketsharefrom65%in1999to~67%in20001.92.0RowaLGPandaJinxingSkyworth-RGBXocecoPhilipsHaierPanasonicHisenseToshibaTCLChanghongKonkaSony20SECChina010821BJ-ToshibaDALIANTOSHIBA’SMARKETPOSITIDALIANTOSHIBA’SMARKETPOSITIONINCHINA’SPJTVMARKET:NO.1MARKETSHARELEADER

Source: GFK,internalinterview,literaturesearch,externalinterviews:Sony,Panasonic,ToshibaKeytrendsRationaleEstablishedMNCs,Toshiba,SonywillcontinuetodominatemarketLocalplayersstartestablishingthemselvesby2005High-endproducerswithsuperiortechnologyinpixelresolutionandbrightnessLocalplayersexpectedtoacquirekeyPJTVtechnologiesasof2003Ascomparison,Changhongalonenowcontrols~20%oflargescreenCRTVmarket,localplayerslikelytogainsimilarshareinPJTVmarketMarketsharebysalesPercentLocal(KonkaChanghong,etc)OtherMNCsHitachiPanasonicSamsungSonyToshiba19992000100%100%21SECChina010821BJ-ToshibaDALIANTOSHIBA’SMARKETPOSITIPJTVPLAYERS’STRENGTHSANDWEAKNESSESCompanyStrengths/weaknessesToshibaStrongbrandnameAggressivesalesandmarketingSonyNo.1brandnamePremiummarketwithhighestindustryprofitsSamsungStrongqualityinresolutionandbrightnessSolidpositioninthemarketComparabletechnologywithJapanesecounterpartsOtherMNCs:Panasonic,Philips,etc.Possessthetechnology,butyettoestablishthemselvesinmarketLocalcompanies:TCL,Konka,Hinsense,Haier,ChanghongLackthekeytechnologiesforPJTVcomponents–tubesandscreenLow-endbrandhaveresultedinlowsalesvolumeWillfillupthetechnologygapbyabout2003

Source:Litsearch,McKinseyanalysis22SECChina010821BJ-ToshibaPJTVPLAYERS’STRENGTHSANDWETOSHIBAHASAFULL-LINEPROUCTOFFERINGINNOTEBOOK,COVERINGLOW-ENDTOPREMIUMSEGMENT

Source: LiteratureresearchKeyproductofferingsSatelliteSeries2800(13.3",14.1",15.0")PortegeSeries(7220CT,3480CT,3490CT)TecraSeries(8100H,8000J,8200)Satellite1750(13.3")Newsatellite2800(13.3",14.1",15.0")SatellitePro4600(13.3",14.1",15.0")NewSatellitePro4600(14.1")Satellite3000(13.3")

Source: literatureresearch23SECChina010821BJ-ToshibaTOSHIBAHASAFULL-LINEPROUCTTOSHIBAISSTRONGINEDUCATION,LARGEANDMEDIUMBUSINESS,BUTPARTICULARLYWEAKINGOVERNMENTSource: IDCSmallofficeHome100%=ToshibaMarketaverage73484EducationGovernmentLargebusinessSmallbusinessMediumbusinessSalesbycustomersegmentsPercentofunitsshipment(000s),200024SECChina010821BJ-ToshibaTOSHIBAISSTRONGINEDUCATIONTOSHIBAISGENERALLYAMEDIUMTOHIGH-ENDPLAYER,PARTICULARLYSTRONGINUSD2.5-3.5KPRICEBRANDSource: IDC0.9Low

(0-2k)Medium(2-2.5k)High

(2.5-3.5k)100%=0.10.08Premium(>3.5K)2.2Toshiba'smarketshare0.1SalesbycustomersegmentsPercentofunitsshipment(M),2000OthersDellIBMFounderLegendAcerToshiba25SECChina010821BJ-ToshibaTOSHIBAISGENERALLYAMEDIUMVALUECHAINSTRATEGY1.BackgroundinformationLocationRegistered

capitalManagement

teamEquity

structureStartingyearNumberof

employeesEraanalysis4.Valuechainstrategy5.Organizationandownership6.FinancialperformanceFocusonMarketing,

advertisingand

promotionDistribution(channel

andsalesforce)OrganizationstructureOwnershipstructureSalesProfit2.Strategy3.Product/marketMissionVisionCorporatestrategyKeyproductofferingsMarketposition26SECChina010821BJ-ToshibaVALUECHAINSTRATEGY1.BackgroSource: LiteratureSearch,Konkawebsite,teamanalysisR&DManufacturingMarketing&SalesDistributionAfter-SalesServicesToshibaDigitalMediaNetworkCompanyisresponsibleforColorTVR&DDalianToshibaisresponsibleforTVproduction.30%partscomefromChinaDalianToshibaandits4subsidiariesinDalian,Beijing,ShanghaiandGuangzhouareresponsibleformarketingandsalesDalianToshibaprimarilyusessalesforcesinitsfoursubsidiariestosellTVproductsdirectlytoretailers.ItalsousesdistributorsincertainregionssuchasChongqing.Toshiba(China)helpedsetuptheafter-salesservicenetwork,andDalianToshibaisrunningthenetworkandresponsibleforPNL.DigitalmediaDigitalMediaNetworkCo.DalianToshibaTVCo.TOSHIBACHINATVBUSINESSHASAPRODUCTLINEORIENTEDVALUEDELIVERYSYSTEM

27SECChina010821BJ-ToshibaSource: LiteratureSearch,KoDALIANTOSHIBA’STVDISTRIBUTIONCHANNELSource: McKinseyLiteratureSearch,externalinterviews,McKinseyanalysisDalianToshibaTVCo.ManufacturingPlantDalianSubsidiaryBeijingSubsidiaryShanghaiSubsidiaryGuangzhouSubsidiaryDistributorsRetailers:Hyper/super-market:10%DesignatedStores:25%Dept.Stores:30%SpecialtyStores:35%ConsumersSubsidiarySalesForce70%30%28SECChina010821BJ-ToshibaDALIANTOSHIBA’STVDISTRIBUTITOSHIBAADOPTSTHENATIONALCHIEF-DISTRIBUTORPRACTICEINNOTEBOOKBUSNIESSINCHINAR&DManufacturingMarketingandbrandingSalesanddistributionAfter-salesserviceToshibaR&DToshibaSHOEM:Renbao,aTaiwaneseOEMplayerDigitalChinaDigitalChina

(forToshibanotebookonly)ToshibaDigitalChinaCentralizekeyaccountsacrossdifferentproductsCentralizeSIforkeyaccounts(banking,tax)Beinchargeofchanneldevelop-

mentandmanagementDigitalChinaMajorresponsibilityToshibaSHfactoryParts'inventoryAncillaryhotlineToshibaToshibaSHOEMToshibaToshibaSHDealersDigital

ChinaSource:interview29SECChina010821BJ-ToshibaTOSHIBAADOPTSTHENATIONALCHTOSHIBAHASPOSITIONEDCHINAASAKEYR&DBASE

*

TheothertwoR&DcentersareintheUKandtheUSrespectivelySource: LiteratureresearchThree-layerstructureofToshibaR&DFirstlayerfocusingontechnologytrendsinthenext3-5yearsSecondlayerfocusingonmulti-mediatechnologyandtechnologytrendsinthenext2-3yearsThirdlayerfocusingonproductdevelopmentToshibaR&DinChinaEstablished"R&Ddepartment"inBeijing,April2001Plantodevelopitinto"Toshiba(China)R&Dcenter”inOctober2001whichwillbethethirdoverseasR&DcenterofToshibaPlantohave250peoplethisyearandexpandto500people

inR&Dcenterin2005R&D30SECChina010821BJ-ToshibaTOSHIBAHASPOSITIONEDCHINAATOSHIBAHASOUTSOURCEDTHEMAJORPARTOFNOTEBOOKMANU-FACTURINGANDITSDISTRIBUTORISCAPABLEOFCUSTOMIZATION

INCONFIGURATION

Source: Literatureresearch,interviewManufacturingPartiesinvolvedResponsibilitiesToshibaSHAssemblingproductiontocovertotalvolumesoldinChinaAssemblingproductionforexpertOEM(Renbao)MajorpartofnotebookmanufacturingDigitalChinaCustomizationforbig-batchorderaccordingtocustomers'individualizeddemandforhardwareconfiguration31SECChina010821BJ-ToshibaTOSHIBAHASOUTSOURCEDTHEMAJUNDERSTRONGCOSTPRESSURE,DIGITALCHINAANDTOSHIBAAREPUSHINGTOWARDSMOREFLATTENEDCHANNELSTRUCTURE

Source: CCID,interviewChannelStructureChannelCostPercentofretailpriceDigitalChinaCoredistributors

(~50)DirectSpecialtyshops(over100)IndustrydistributorsEndusersSecondtierdealers(hundreds)Before19971997-19981999-2001Futureexpecta-

tionofmanu-facturers>>10>108-105-8Paysufficientattentiontofast-growingcustomersegments,suchaseducationandhome,aswellasmajorsegments,suchasgovernmentandbusinessExpandinto2nd-tiergeographiesandenhancechannelChannelstrategy32SECChina010821BJ-ToshibaUNDERSTRONGCOSTPRESSURE,DIDIGITALCHINAISBUILDINGUPANADVANCEDNATION-WIDEDISTRIBUTIONNETWORKTOFURTHERCUTDOWNCOST

Source: Literatureresearch,interviewDistributionKeyinitiativeBuildupanation-widelogisticssystemTotalinvestmentRMB65millionThree-tierstructure3first-tiercentersinBeijing,ShanghaiandGuangzhou7second-tiercentersThird-tiercomponentsDetailedpracticeProvidersdelivertothreefirst-tiercentersInventoryisdistributedamongallthethreetierswithinventorycycleshorteningfromfirsttiertothethirdSCMmanagementisthroughITnetwork33SECChina010821BJ-ToshibaDIGITALCHINAISBUILDINGUPADESPITECONTINUOUSIMPROVEMENT,TOSHIBANOTEBOOK’SCUSTOMERSERVICESTILLLAGSBEHINDINCERTAINASPECTSVIPcertificate

ForA-classcustomers,Toshibanotebookguaranteeincludesresponsewithin10hours,andrepairfinishedwithin20hours,otherwiseofferingabackupnotebookOn-siteservice On-siteserviceisofferedinBeijing,Shanghai,andGuangzhouDellandAceroffer4-hourresponsecommitmentDellofferson-siteserviceinmajorcitiesinChinaCustomerservice * FootnoteSource: SourceMajorinitiativesCompetitor’sofferings

Source: Literatureresearch,interview34SECChina010821BJ-ToshibaDESPITECONTINUOUSIMPROVEMENTORGANIZATIONANDOWNERSHIP1.BackgroundinformationLocationRegistered

capitalManagement

teamEquity

structureStartingyearNumberof

employeesEraanalysis4.Valuechainstrategy5.Organizationandownership6.FinancialperformanceFocusonMarketing,

advertisingand

promotionDistribution(channel

andsalesforce)OrganizationstructureOwnershipstructureSalesProfit2.Strategy3.Product/marketMissionVisionCorporatestrategyMarketpositionKeyproductofferings35SECChina010821BJ-ToshibaORGANIZATIONANDOWNERSHIP1.BSource:Litsearch,teamanalysisTOSHIBA’SCORPORATESTRUCTUREStatutoryAuditorsBoardofDirectorsPresident&CEOCorporateprojectCorporatestaffCorporatesupportservicesiValueCreationCompanye-SolutionsCompanySocialInfrastructureSystemsCompany

DigitalMediaNetworkCompanyMobileCommunicationsCompanyPowerSystems&ServicesCompanySemiconductorCompanyDisplayDevices&ComponentsCompanyMedicalSystemsCompanyHomeAppliancesCompanyJapanForeignCountry

DalianToshibaTV,LtdOtherJVOtherSubsidiariesJapanForeignCountry36SECChina010821BJ-ToshibaSource:Litsearch,teamanalyTOSHIBA’SMAJORSHAREHOLDERS

Source: Toshibawebsite(AsofSeptember30,2000)EntityPercentOutstandingTheDai–ichiMutualLifeInsuranceCompanyTheSakuraBank,Ltd.NipponLifeInsuranceCompanyStateStreetBankandTrustCompanyTheChaseManhattanBankNALondonTheSumitomoTrustandBankingCo.,Ltd.EmployeesStockOwnershipPlanTheMitsubishiTrustandBankingCorporationMitsuiMutualLifeInsuranceCompanyTheNipponFire&MarineInsuranceCo.,Ltd.3.94%3.88%3.36%2.55%2.28%2.27%1.88%1.68%1.65%1.55%37SECChina010821BJ-ToshibaTOSHIBA’SMAJORSHAREHOLDERS STOSHIBAHEADQUARTERHOLDSTHEMAJORITYOFITSNOTEBOOKMANUFACTURINGJVINCHINA

Source:LiteratureresearchOwnershipstructureToshibaToshibaChinaCo.,LtdShanghaiJinqiaoToshibaComputer(Shanghai)Co.,Ltd80%10%10%38SECChina010821BJ-ToshibaTOSHIBAHEADQUARTERHOLDSTHEFINANCIALPERFORMANCE1.BackgroundinformationLocationRegistered

capitalManagement

teamEquity

structureStartingyearNumberof

employeesEraanalysis4.Valuechainstrategy5.Organizationandownership6.FinancialperformanceFocusonMarketing,

advertisingand

promotionDistribution(channel

andsalesforce)OrganizationstructureOwnershipstructureSalesProfit2.Strategy3.Product/marketMissionVisionCorporatestrategyMarketpositionKeyproductofferings39SECChina010821BJ-ToshibaFINANCIALPERFORMANCE1.BackgrTOSHIBA’SOVERSEASSALESANDR&DEXPENDITURESOverseasSales(￥billion)R&DExpenditures(￥billion)Source:Toshiba2001AnnualReport,Litsearch199819992000CAGR=4.7%199819992000￥2,040￥2,116￥2,2352,0001,5001,0005000￥323￥317￥3443202401608005.9％6.0％5.8％R&DExpendituresPercentageofNetSales40SECChina010821BJ-ToshibaTOSHIBA’SOVERSEASSALESANDRTOSHIBA’SHISTORICALREVENUESANDPROFITSNetSalesCAGR=1.9%19971998199920002001NetIncomeCAGR=9.4%*Source:Toshiba2001AnnualReport,LitsearchYenbillion1997199819992000200141SECChina010821BJ-ToshibaTOSHIBA’SHISTORICALREVENUESIN2000,DALIANTOSHIBA’SUNITSALESINCHINAWAS7%OFCHANGHONG’SUNITSALES,BUTDALIANTOSHIBA’SGROSSPROFITINCHINAWAS89%OFCHANGHONG’SGROSSPROFITUnitSalesthousandDalianToshibaChanghong

Source:21stCenturyEconomicreport,March19,2001GrossProfitbillionRMBDalianToshibaChanghong42SECChina010821BJ-ToshibaIN2000,DALIANTOSHIBA’SUNITDESPITEOFSTRONGGROWTHOFTOTALMARKET,TOSHIBANOTEBOOKHASEXPERIENCEDSTAGNANTGROWTHOF4.4%ANNUALLYNotebookrevenue(RMBbillions)Source: IDCToshibainChina19992000199898-00CAGRPercentTotalChinamarket19992000199898-00CAGRPercent1.51.743SECChina010821BJ-ToshibaDESPITEOFSTRONGGROWTHOFTOCONFIDENTIALBrownGoodsandPCCompetitorAnalysis:

ToshibaSAMSUNGELECTRONICSCHINA(SECChina)August20,2001Thisreportissolelyfortheuseofclientpersonnel.Nopartofitmaybecirculated,quoted,orreproducedfordistributionoutsidetheclientorganizationwithoutpriorwrittenapprovalfromMcKinsey&Company.ThismaterialwasusedbyMcKinsey&Companyduringanoralpresentation