Businessmodel of Hitachi

Customer Segments

Hitachi serves a range of customers across multiple business and government sectors. The Company also produces consumer electronics and home appliance products for the general population. Hitachi has a worldwide presence and serves customers through multiple channels.

Hitachi also provides specialist products to various industrial clients and enterprise-wide solutions and services to corporate customers. Among the sectors served by Hitachi’s more specialised products and services are the financial services, healthcare, retail, IT, manufacturing, education, communications, utilities, natural resources and pharmaceutical industries. Among the Company’s customers are numerous Fortune 500 companies, including Cisco, Ford, Sears, Pfizer, AT&T, Wells Fargo and Intel.

Hitachi also serves a range of government clients. In the US, for example, its companies are provided services directly to the United States Census Bureau, the Department of Commerce and the Los Angeles County Internal Services Department.

Value Propositions

Hitachi is one of the most established, experienced and well-respected electrical and electronics manufacturing companies in the world. Its brand name carries with it a reputation for providing reliable and efficient products, demonstrated by the fact that it serves many of the world’s largest companies, as well as government bodies.

The Company’s high quality service is enhanced by the contributions of its various market-leading partners, notably within the tech space, which also help Hitachi to continue providing innovative and interesting products to its customers.

Hitachi products are available across multiple channels, including from third-party vendors, making them easily accessible.

The Company also provides ongoing customer support and technical assistance to its customers, ensuring that its products perform as designed.

Channels

Hitachi’s products are available to customers across multiple channels. The Company operates various online stores, divided by business segment or division and jurisdiction, including www.hitachiconsumer.com and www.hitachi-hli.com/e-shop.

Hitachi products are also available through a range of third-party online retailers, authorised resellers, dealership and chain electronics outlets. The Company’s more specialised products, particularly those serving industrial clients, can be purchased directly from the Hitachi sales team or through one of the Company’s licensed distributors.

Customer Relationships

Many of Hitachi’s products are available on a self-service basis, either through Hitachi’s own online stores or through third-party online resellers, requiring no interaction with the Company’s sales representatives.

Hitachi also sells products to customers through a network of authorised dealers and electronics stores, where customers can receive a greater degree of personal care.

The Company’s more specialised products and solutions can be purchased through Hitachi’s own sales team or from one of many licensed distributors.

Hitachi customers are provided ongoing customer care in the form of online resources such as user guides, tutorials and FAQs, as well through direct enquiries with the Company through online contact forms, email or over the phone. Hitachi also interacts with its customers directly through its various social media accounts, including with Facebook and Twitter.

Key Activities

Hitachi is a multinational conglomerate with diversified interests. It operates across nine business segments: Information and Telecommunication Systems, including the manufacture of telecoms products, consulting services and system integration; Social Infrastructure and Industrial Systems, including the manufacture and installation of elevator, railway vehicles and water treatment facilities; Electronic Systems and Equipment, including the the production of electronic components, processing systems and communications systems; Construction Machinery, including the manufacture of construction and maintenance machinery such as hydraulic excavators; High Functional Materials and Components, including the manufacture and sale of specialized components for use in the IT, automotive and consumer electronics fields; Automotive Systems, including the production of engine management and drive control systems; Smart Life and Ecofriendly Systems, including the manufacture and sale of household appliances, consumer electronics and digital media products; Others, including the provision of logistics, freight transportation, warehouse management solutions; and Financial Services, including the provision of collection agency, trust and insurance services.

Until April 2015 Hitachi also operated a Power Systems Division that comprised the production and sale of nuclear power components, renewable energy products and transmission systems. This segment has since been amalgamated into the Social Infrastructure and Industrial Systems Division.

Key Partners

Across its numerous subsidiaries, regional offices and business divisions Hitachi partners with a range of companies from various sectors and jurisdictions. Its network of partners includes independent software vendors, technology partners, systems integration partners, authorised resellers, managed service providers, cloud services providers, advisors and distributors. Hitachi manages a network of strategic alliance partners, largely comprising high-profile tech companies, including Adobe Systems, SAP, Microsoft, Amazon Web Services, Intel and Red Hat.

Hitachi also partners with companies that are authorised to provide services to federal agencies, including Accenture and ViON, and companies that specialise in serving public sector organisations, such as Insight Public Sector and GSA Federal Supply Schedule.

Key Resources

Hitachi’s key resources are its products, its manufacturing facilities, its warehousing and distribution channels, its various partnerships, its sales channels and its personnel.

Hitachi has numerous patent applications filed with the US Patent and Trademark Office, including applications entitled ‘Shock absorber and method for manufacturing shock absorber’, ‘Sealed scroll compressor for helium’ and ‘Vehicle battery charger and a fault diagnosis of relay’.

Cost Structure

Hitachi incurs costs in relation to its research and development activities, its manufacturing operations – including the procurement of supplies, the transport, warehousing and distribution of its products – and the retention of its personnel.

The Company is a multinational organisation, operating numerous regional offices across the world which individually accrue fixed costs relating to rent and utilities.

Revenue Streams

Hitachi is a multinational conglomerate with interests diversified across multiple sectors. The Company principally derives its revenue from the manufacture and sale of various electronic, electrical and industrial products.

Hitachi’s revenue is generated by its nine operating segments. In the year ending 31st March 2016 the Company’s Social Infrastructure and Industrial Systems Division was its largest contributor to annual revenue, generating $20.65 billion, accounting for around 21% of the Company’s total revenue of $99.05 billion. The strong performance of this segment is due in part to its merger with the Company’s Power Systems Division in April 2015. Hitachi’s Information and Telecommunications Systems Division generated $18.67 billion in fiscal year 2015, representing 19% of total revenue, while the Company’s production of specialised high functional components generated $13.84 billion, or 14%, of revenue for the year.

The only other segment to contribute more than 10% of Hitachi’s annual revenue in 2015 was its Others segment, comprising logistics, warehouse management and freight solutions, which generated 11% of total revenue. Hitachi’s other operating divisions – Electronic Systems and Equipment, Automotive Systems, Construction Machinery, Financial Services, and Smart Life & Ecofriendly Systems – accounted for between 3% (Financial Services) and 10% (Electronic Systems & Equipment) of total annual revenue.