Case 5 Takenaka Komuten Company LTD

CONNESSON Rémi

KOSIOR Flora

LEPROUX Baptiste

Background

Japanese general contractor

Design and construction of office public building …

Numerous awards for its high quality of construction

Non diversified character of the company

Top five construction firms in Japan

Some figures

Create in 1930

Knows Big growth

Declin in building construction since 1990

Dilemma

Most of the directors want expand the Takenata firm into other areas of contruction

Expand in civil engineering capacity

New offer of Atlas Engineering & Construction

Dialogue

Between

Tom Jameson, President, Atlas Engineering & Construction

Kenji Taniguchi, Managing Director, Takenaka Komuten

Ruichi Takenaka, President, Takenaka Komuten

Discuss the possibilities of forming a joint venture company

Exhibit 1 Summary of Main Points in Jameson's Proposal to Takenaka Komuten

Elimination of separate bid submission

Assurance to the client of integrated design, engineering, construction and quality control

Placement of Takenata Komuten and Atlas Engineering in a competive position

Equal distribution of profit and loss

Exhibit 2Status of Projects Undertaken by Takenaka Komuten

Exhibit 3

Exhibit 4 : Contract awarded to Takenaka directly and through negociation

Exhibit 5 and 7Comparate the type of construction of Takenaka and Atlas

Exhibit 6 : Financial and statistical summary of Atlas

Exhibit 8 : Projects in which Atlas was the sole contractor

Current Situation of TakenakaKomuten

Communication Intercultural Management

Strength

TakenakaKomuten firm has a strategy of

specialization(non-diversified)

An important part of the

management is japanese.

Takana family takes the important decisions.

Weaknesses

The firm is in a precarious

position(a crisis could be

fatal)

No discussion between

employees and direction

The firm is in a precarious situation

Current Situation

Tom Jameson (president of Atlas Engineering & Construction) wants to convince Ruichi Tanaka (president of

TakenakaKomuten) and Kenji Taniguchi (managing director of

TakenakaKomuten)

Should TakenakaKomuten form a joint venture company with Atlas?

Even if they risk losing their reputation of excellence ?

#1 : Takenaka stays independant and stay on its sector of activity.

Avantages Drawbacks

-Reputation of excellence is preserved.-Takenaka family is the head of the company.

-Big risks of failure since the sector of activity of Takenaka family is declining.

#2 : Takenaka stays independant but diversifies its sector of activity.

Avantages Drawbacks

-Takenaka family are the head of the company.-There is possibility that the firm can survive the building construction decline crisis.

-Takenaka is inexperienced in other sectors of activity.-Reputation of excellence is threatened.-Less resources are allocated to the main activity of the firm.

#3 : Takenaka Komuten and Atlas Engeenering Construction form a joint venture company

Avantages Drawbacks

-Simple to put in practice since previous collaborations have existed.-Immediate prospects.-Opens more opportunities and sectors.-Reputation of excellence could be preserved.-There is still a separation between the two companies.

-Possibility of loosing the reputation of excellence.-Takenaka family is not the sole decision maker anymore.-It does not necessarily mean that both companies are stronger.

#4 : Takenaka and Atlas merge to create a bigger company.

Avantages Drawbacks

-Immediate prospects.-Opens more opportunity and sectors.-Reputation of excellence could be preserved.-The new company will be stronger than before and become a big fish in the sector of civil and building engineering .

-Needs a lot of ressources to create the new company.-Possibility of loosing the reputation of excellence.-Takenaka family is not the sole decision maker anymore.-Annoy the segment of customers whom have chosen Tanaka for its non-diversified character .

#5 : Takenaka family sells the company and leave to Bahamas.

Avantages Drawbacks

-It is the good life, no leaders problems anymore.-The youngsters of the family have a world of opportunities available to create start up on the next big thing (eg : Internet).

-Loosing the reputation of excellence.-Takenaka family is not the decision maker anymore.-For the elders the retirement may bring about a nervous breakdown.

We recommand : …

#3 : Takenaka Komuten and Atlas Engeenering Construction form a joint venture company

Because everybody win !

Takenaka : With a marketting operation can keep their reputation of excellence and get more contracts.Atlas : Will always work with the same other contractor (reducing costs and improving project implementation velocity)

Questions ?