Hitachi, the largest Japanese conglomerate, and its transformation in the innovation era

Abstract

Hitachi has more than a hundred-year history since its foundation and 864 subsidiaries globally. It serves in a wide variety of industries including but not limited to information systems, social infrastructure and automotive systems as well as home appliances. In 2008, however, due to the financial crisis, Hitachi scored the largest loss ever in the Japanese manufacturing industry. I analyze how Hitachi returned from the brink of bankruptcy by comparing it with other domestic players. I also look back on Hitachi's overall history to overview its growth. Looking at today's world, we see disruptive technologies shaped into the practical use to solve social problems. Global firms lead innovations by developing and absorbing the cutting-edge technologies, rebuilding their organization and business portfolio accordingly, and establishing new industrial standards. After its restructuring, Hitachi also started the same approach, but its momentum and boldness seem to be less than those of its competitors. Through restructuring since 2009, Hitachi has returned to its position as a domestic champion in the industry. However, it falls far behind the global companies. Therefore, the aim of this thesis is to explore challenges Hitachi faces to be a globally competitive company, and solutions to those problems. My proposal starts from strategy planning. Social Innovation Business is Hitachi's commitment to society, and I evaluate that it is a good strategy. In addition, to prepare for uncertainty, Hitachi should be equipped with the longer perspectives. To maintain competitiveness longer and to deliver value, I propose the organizational structure with which Hitachi can plan a better strategy and execute it accordingly. Note: The views expressed in this thesis are solely my own and do not necessarily reflect the views of Hitachi, Ltd., my employer.