Businessmodel of Toshiba

Customer Segments

As a diversified business, providing a range of products and services, Toshiba serves several different customer segments worldwide and across a number of sectors. This includes general consumers, who purchase Toshiba branded laptops, hard drives and accessories; businesses and enterprises, that purchase Toshiba’s business hardware and technical solutions; and healthcare bodies and facilities that purchase medical imaging equipment.

The Company also provides industrial products to a range of businesses from within the petrochemical, agribusiness, oil and gas, utilities, water and paper industries that purchase industrial products.

Toshiba also serves local and national government bodies. Notably, it is currently a supplier of telecoms equipment to the US Government.

Value Propositions

Toshiba provides value in the variety and quality of its products. The Company is a respected and well-known electrical and electronics brand, with a history of providing reliable and efficient products.

The Company has a wide network of partners, including tech industry leaders, that help it to provide a good service to its customers. Toshiba is constantly seeking to improve and enhance the performance of its products and manufactures hardware that is easy for consumers to use.

It also provides ongoing technical support to its customers, ensuring that its products perform to the best possible standard.

Channels

Toshiba products and services can be viewed at its mobile and desktop websites at www.toshiba.com. Consumers can buy Toshiba products, such as laptop computers and hard drives, can be purchased via the Company’s online stores, as well as through a network of approved third-party retailers, both online and in-store, and business resellers.

Toshiba’s more specialised products – such as security products, medical cameras, industrial equipment and electrical components – can be purchased by contacting the relevant Toshiba division directly, or by identifying an approved distributor.

Customer Relationships

For general consumers Toshiba’s products are available on a self-service basis, with customers able to purchase Toshiba branded products through online channels and retail outlets with no interaction with Toshiba sales representatives.

Customers of Toshiba’s more specialised industrial, medical and business products and services require a greater degree of personal attention, making purchases directly through the Company’s sales team and receiving a service tailored to their individual needs.

Toshiba provides technical assistance to its consumer, business and industrial customers through online guides, tutorials and direct personal assistance, and interacts with customers through its YouTube, Facebook, Twitter and LinkedIn accounts.

Key Activities

Toshiba manufactures, markets, and sells electrical and electronic products. This includes consumer-focused computer hardware products and home appliances, such as laptops, hard drives, televisions, washing machines and refrigerators; industrial products such as semiconductors, motors, and transformers; and medical imaging equipment for healthcare facilities.

Toshiba manufactures its own products via a network of manufacturing facilities in the US, Canada, Japan, Vietnam, Brazil and China.

The Company then sells products directly to customers via its online store and sales team, as well as indirectly through a global network of third-party retailers, distributors and authorised resellers. The Company also provides technical and business services, including cloud and client management solutions.

Key Partners

Toshiba manages a partner program named the Toshiba Commerce Alliance. This program divides the company’s partners into software partners, comprising independent software vendors who own applications deployed on the Toshiba product portfolio; innovation partners, for companies who have original equipment manufacturer solutions enabled on one or more Toshiba products; and authorised service partners who have signed a subcontractor agreement and are authorize to offer warranty services and maintenance to Toshiba customers.

Partners are also categorised into Business Partner, Gold Business Partner and Diamond Business Partner levels, dependent on performance and contribution to Toshiba revenue. Among Toshiba’s partners are Mekano, RetailPro, and Siatec Systems as software partners; IBM, Microsoft, Cognizant and Verifone as innovation partners; and Informatica, Dacoll and Warpol as authorised service partners.

Key Resources

Toshiba’s key resources are its products and technology, its manufacturing facilities, its sales and distribution networks – including warehousing and logistics facilities, and its personnel.

Toshiba has numerous patent applications filed with the US Patent and Trademark Office, including applications entitled ‘Voltage controlled oscillator circuit and frequency synthesizer’, ‘Semiconductor memory device’, and ‘Quantum key distribution device, quantum key distribution system, and quantum key distribution method’.

Toshiba’s network of partners also contributes significantly to the Company’s business and revenue models.

Cost Structure

Toshiba incurs costs in relation to research and development, the manufacture of its products – including the operation of manufacturing facilities and purchase of supplies, the transport, warehousing and distribution of its products and the retention of its personnel.

The Company was reported to employ more than 215,000 workers worldwide in 2015 but plans to reduce this number to around 180,000 by March 2017, as part of a structural reform triggered by an accounting scandal. A workforce this large generates significant costs in terms of salaries and benefits.

The Company also operates a broad network of offices and facilities across the world, which accrue costs in the form of utilities and rent.

Revenue Streams

Toshiba generates revenue through the manufacture and sale of electric and electronic products. The Company’s revenue is divided into five principal segments: Energy and Infrastructure, Community Solutions, Healthcare Systems and Devices, Electronic Devices and Components, and Lifestyle Products and Services.

In 2015 Toshiba’s Energy and Infrastructure segment – including the manufacture and sale of industrial products such as generators, power systems and energy storage systems – accounted for 28% of total sales, the Company’s largest single segment.

Electronic Devices and Components accounted for 24%, Community Solutions accounted for 19%, Lifestyle Products accounted for 16% and Healthcare Systems and Services accounted for 6%. The remaining 7% was attributed to other products and services that do not fit into one of the Company’s product segments, such as cloud and network solutions.

In 2015 Toshiba generated JPY 6.7 trillion (approximately $60.3 billion) in annual revenue.