management project

Table of Contents

Statement of Purpose 2 Company History 3 Rationale 4 Competitive Environment Analysis: 5 Ordering Rationale 1: 8 Internal Environment Analysis: 9 Ordering Rationale 2: 12 Industry Environment Analysis: 12 Ordering Rationale 3: 16 General External Environment Analysis: 17

Statement of Purpose

The aim of this project is to conduct an in-depth analysis of Marubeni to understand its operations, strategies and overall impact on the global market. Our decision to focus on Marubeni is driven by several compelling reasons. To begin, Marubeni’s extensive portfolio spans various industries all including energy, transportation, metals, and food which provides an abundant amount of data and strategies to analyze. Additionally, Marubeni’s significant presence in international markets makes it an ideal organization to analyze. Our objective is to uncover the mechanisms that have driven Marubeni’s success, identify the challenges it faces, and propose actionable recommendations to enhance its future performance. Readers of this report should anticipate an in-depth and well-rounded analysis of Marubeni that reaches further than what is just on the surface. By doing this, we aim to contribute valuable insights that can guide stakeholders such as management and investors, among others, in making informed decisions about Marubeni.

Our selection of Marubeni for this project was a strategic choice that was made after consideration of many different factors. As students looking to gain a great understanding of global business operations, we looked for a company that not only has a large international reach but also one that operates in a diverse range of industries as well. Marubeni’s involvement in various sectors such as agriculture, energy, metals, chemicals, transportation, and consumer products gives us the opportunity to study a wide range of business activities and market dynamics. Having operations in multiple countries provides a unique perspective on managing and thriving in different economic, cultural, and political landscapes. Furthermore, their commitment to innovation and adaptive strategies in response to global trends align with our academic goals of learning about modern business practices. Marubeni also holds a significant influence in the global market as they are one of Japan’s leading general trading companies. Finally, from an educational standpoint Marubeni offers an abundance of material. Its substantial public records, annual reports, as well as frequent updates on strategic initiatives give a good foundation for research and analysis.

What is the contribution of this project to our academic goals? This project will refine our research skills as we go through data. Understanding Marubeni’s business strategies and their outcomes will require rigorous analytical thinking helping us in the ability to dissect and interpret complex business scenarios. This project will also enable us to apply theoretical concepts learned in class to real-world situations, bridging the gap between academic knowledge and practical application.

In closing, this project goes beyond a simple academic task. It is an opportunity to delve into the operations of a global business. By selecting Marubeni we look to investigate the complexities of a diversified multinational company, understand its strategic moves, and assess its global impact. Readers can anticipate a comprehensive and insightful report that not only examines Marubeni’s business operations but also provides a critical analysis of its strategic initiatives and future prospects. Through this effort, we intend to significantly enhance our academic development and equip ourselves for future careers in the global business landscape.

Company History

Marubeni was founded in 1858 and has grown to become one of Japan’s largest general trading companies. Initially focused on trading textiles, Marubeni expanded its operations into other commodities such as food and chemicals. These strategic moves allowed it to establish a strong presence in international trade. During WWII, industrial and financial business conglomerates in Japan were dismantled under the occupation reforms. As a result of this, Marubeni was formally separated from the parent company Itochu in 1949 and began to chart its independent course1. After World War II, Marubeni played a significant role in Japan's reconstruction by importing essential goods and materials. They were also provided with new opportunities. Marubeni quickly adapted to the changing landscape by expanding its trading activities. Throughout the 1950s and 1960s, Marubeni began to diversify into a variety of sectors, including metals, chemicals, energy, and machinery. This period was marked by strategic partnerships and joint ventures, both domestically and internationally, which solidified Marubeni's position as a key player in global trade. Additionally in the 1950s, Marubeni merged with another trading company, Takashimaya-Iida, which significantly boosted its capital base and market reach2. This merger was a pivotal move that helped Marubeni to strengthen its foothold in the burgeoning Japanese economy.

The 1980s began a crucial era of globalization for Marubeni. The company aggressively expanded its operations overseas, establishing a strong presence in North America, Europe, and other Asian markets. During this period, Marubeni was involved in numerous large-scale infrastructure projects, including energy development, mining, and construction, which were critical to the economic development of these regions. Marubeni also began to invest heavily in technology and innovation. Recognizing the transformative potential of information technology, the company launched several initiatives to modernize its operations and streamline its global supply chain. This forward-thinking approach enabled Marubeni to enhance its competitive edge and adapt to the rapidly evolving market dynamics. In the late 1990s as they were facing financial difficulties, Marubeni initiated its restructuring plan, focusing on profitable sectors and divesting non-core businesses.

Going into the 2000s, Marubeni saw many new challenges and opportunities. The global economic landscape was becoming increasingly complex, and Marubeni responded by undergoing a strategic reorganization. The company refocused on its core competencies, particularly in sectors where it had established significant expertise and market presence. Around the year 2000, Marubeni established a new management philosophy centered around creating new value, which emphasized innovation, sustainability, and social responsibility. This shift was reflected in its business operations as the company increased its investments in renewable energy, environmental projects, and sustainable development initiatives. Moreover, throughout the 2000s, Marubeni continued to divest from non-core businesses and streamline its portfolio.

2 Our history. Marubeni Corporation. (n.d.). https://www.marubeni.com/en/company/history/ 1 Our history. Marubeni Corporation. (n.d.). https://www.marubeni.com/en/company/history/

This strategic move was aimed at enhancing operational efficiency and focusing resources on high-growth areas. The company's investments in natural resources, particularly in oil, gas, and mining, were notable during this period. The past decade, the 2010s to the present day, Marubeni has continued to evolve and adapt to global market trends. The company has significantly expanded its footprint in renewable energy, including wind and solar power projects across various continents. This aligns with its commitment to sustainability and addressing climate change. Marubeni's strategic acquisition and partnerships have been pivotal in driving growth. For instance, in 2013, Marubeni acquired a stake in Gavilon, a leading U.S. grain trading company, to strengthen its agricultural business3. This acquisition was a key move to enhance its global supply chain in the food sector.

Marubeni’s extensive global presence and diverse portfolio have made it a robust and adaptable competitor in the international market. The company’s adeptness at navigating complex economic conditions and capitalizing on growth opportunities has been pivotal to its success. As Marubeni continues to progress, its dedication to innovation, sustainability, and others will be integral to its strategy. The company’s proactive approach and commitment to creating new value will ensure it remains influential in global trade and development.

In summary, Marubeni’s history reflects its adaptability to changing market conditions, its operational diversification, and its pursuit of strategic growth opportunities. From its origins as a textile trading company to its current status as a global trading powerhouse, Marubeni has consistently shown resilience and innovation. The company's emphasis on sustainability, alongside its investments in technology and renewable energy, positions it well to tackle future challenges and opportunities. As Marubeni continues to grow its global footprint and diversify its operations, it will undoubtedly continue to shape the landscape of international trade and development.

Rationale

To comprehensively understand Marubeni's current standing and potential future trajectories, it is crucial to analyze the company's situation at this juncture in the report. This analysis is particularly timely given Marubeni's extensive history and its ongoing evolution in response to global market trends. Marubeni's journey from a textile trading firm to a diversified global powerhouse encapsulates significant strategic shifts, mergers, and expansions that have shaped its competitive landscape. As the company continues to navigate through challenges and opportunities in an increasingly complex economic environment, a thorough situational analysis will provide critical insights into the various aspects of the business environment.

We will begin by analyzing Marubeni's competitive environment first. This approach is essential because understanding the competitive dynamics in which Marubeni operates will set the stage for evaluating other aspects of its environment. Analyzing the competitive environment will allow us to assess Marubeni's position relative to its competitors, identify the key players in

3 Our history. Marubeni Corporation. (n.d.). https://www.marubeni.com/en/company/history/

the industry, and evaluate the strategies that Marubeni employs to maintain its competitive edge. This foundational understanding will enable a more nuanced examination of the general external environment, industry environment, and internal environment in subsequent sections of the report. By prioritizing the competitive environment, we can better gauge Marubeni's strategic positioning and its capacity to adapt to market changes and pressures.

Competitive Environment Analysis:

There are a few key issues with Marubeni as a company when compared to its competitors. Though each company is operating in the same markets Marubeni tends to perform worse than top competitors and may soon be overtaken by younger companies. What Marubeni lacks compared to other companies is the ability to consistently take advantage of untapped countries and resources prone to rapid growth for example Eastern Asian Countries ready to boom or Middle Eastern Countries with immense untouched resources. Marubeni also struggles with identifying key technologies for investing as well as revolutionary technological developments that may provide groundbreaking changes to the industry.

Marubeni as a corporation operates within the industry of wholesale of various products from technology to home products, materials and chemicals, agriculture and environment, energy and infrastructure, transportation and industrial machinery, and finally business investing and development. Its competitors such as Mitsubishi, ITOCHU, and Sojitz also operate within similar sectors of business as Marubeni however, have expanded beyond these sectors into more innovative and exciting sectors such as aerospace and aviation. What’s important to note is that Mitsubishi and ITOCHU have more than doubled the market cap of Marubeni ($31.7 billion) being $86.8 billion and $74.5 billion respectively.456 Sojitz has a market cap of $5 billion.7 What makes Sojitz a worthy competitor is that it is a young company compared to the three main players in the industry. Sojitz was founded in 2004 making it freshly 20 years old while Marubeni, Mitsubishi, and ITOCHU have been expanding and growing for more than 100 years. Mitsubishi and ITOCHU have extensive market capitalizations and market share compared to Marubeni. Sojitz continues its upward trajectory and may overtake Marubeni in terms of market capitalization in the coming century. Despite this, Marubeni continues to be successful, yet still trails behind its larger counterparts and may soon fall behind younger companies.

Beyond profitability and market capitalization, when comparing these companies utilizing the Competitive Profiling Matrix the scores are as follows from greatest to least being: Mitsubishi (3.56), ITOCHU (3.47), Marubeni (3.16), Sojitz (2.72). The four most important

7 Finance, Yahoo. Sojitz Corporation (2768.t) Stock Price, News, Quote & History - Yahoo Finance, finance.yahoo.com/quote/2768.T/. Accessed 11 June 2024.

6 Finance, Yahoo. “Itochu Corporation (ITOCY) Stock Price, News, Quote & History.” Yahoo! Finance, Yahoo!, 11 June 2024, finance.yahoo.com/quote/ITOCY/company-insights/.

5 Finance, Yahoo. Mitsubishi Corporation (MSBHF) Stock Price, News, Quote & History ..., finance.yahoo.com/quote/MSBHF/news/. Accessed 11 June 2024.

4 Finance, Yahoo. “Marubeni Corporation (MARUY) Stock Price, News, Quote & History.” Yahoo! Finance, Yahoo!, June 2024, finance.yahoo.com/quote/maruy/.

critical success factors for the industry are as follows: profitability, sustainability, adaptability, and collaboration. Profitability based on market cap has already been expressed in numbers and the importance of these numbers is embedded within the gross revenue that each company generates. We can analyze financial statements from 2023 to develop gross revenue numbers as being: Mitsubishi ($141.57 Billion), ITOCHU ($104.44 Billion), Marubeni ($68.6 Billion), Sojitz ($16.48 Billion). On the profitability rating for each company Mitsubishi and ITOCHU score four’s while Marubeni scores 3 and Sojitz 2.

Why profitability is most important for this industry is because the more money that is generated, the more the company can reinvest back into different business sectors. This is true in each company’s investing cash flows from the past five years to date. Mitsubishi has invested $1.41 billion, ITOCHU has invested $1.1 billion, Marubeni has invested $583 million, and Sojitz has invested $168 million. Mitsubishi and ITOCHU have invested heavily back into their business due to their immense revenue and ability to financially sustain their investments for the long term hence the massive investments made by the companies. These long term investments continue to payout over the years contributing to their already sizable market caps.

Beyond this, all of these companies are investing within sectors that may be more lucrative such as aerospace, aviation, machinery innovation/development, and clean energy. While Marubeni lacks in terms of capital available for investing, the company is now investing in artificial intelligence and collaborating with American companies. Mitsubishi and ITOCHU are able to leverage their massive levels of cash to reinvest back into their business and different sectors of business very heavily to reap rewards consistently. Marubeni lacks the ability to invest heavily into many different sectors due to a lower revenue stream which causes a cascade of constraints for the company. It has to choose its investments more carefully than its competitors and isn’t able to reap the rewards of investing in many different business sectors. Sojitz, for a company that is barely 20 years old, could be a main competitor for Mitsubishi, ITOCHU, and Marubeni as time continues as their market cap is close to 6 billion within its first 20 years of operation. Their investing cash flows show that they are investing heavily within the energy sector and only time will tell if this will propel Sojitz into an industry titan at the top or not. And so, the scores in the CPM for profitability match each company based on gross revenue and investing cash flows.

Moving onto sustainability as a critical success factor. The scores are as follows: Mitsubishi (4), ITOCHU (4), Marubeni (4), Sojitz (3). All of these companies participate in being highly sustainable as this is a key performance metric due to the high volume of transactions and logistics involved for importing and exporting materials and extremely heavy machinery in high quantities. However, each company does it differently based on their key operations. Mitsubishi disposes of and recycles cars at the end of their lifespan in environmentally friendly ways while also ensuring that their line processes for automobile manufacturing is as efficient and sustainable as possible while also investing heavily into infrastructure and clean energy. ITOCHU, invests heavily into clean energy and infrastructure citing a clean energy deal with Google recently, while sourcing their materials and resources

responsibly and developing new technology to create energy from waste. Marubeni invests in clean energy and aims to develop 40 different power generating sources through the use of developing technology and water. Sojitz also invests in clean energy however, as a company they deal more heavily with fossil fuels compared to its older counterparts which is also a big reason why they are growing so quickly.

Each company strives to deal with sustainability in their own way based on their core competencies and main operations. Marubeni lacks in one specific area in terms of sustainability compared to Mitsubishi and ITOCHU. Timing, Marubeni’s timing is worse than its competitors. The key word is that Marubeni aims to have 40 hydro powered generation sites by 2025 while Mitsubishi and ITOCHU have already signed deals and implemented ways for more efficiency and sustainability. Marubeni seems to be falling behind in terms while being on par in terms of technological advancement and innovation.

Sustainability often segways into adaptability and in the case of these various industries combined into one is definitely the case. In the adaptability critical success factor category the scores are as follows: Mitsubishi (3), ITOCHU (3), Marubeni (3), Sojitz (3). Each of these companies has adapted in some way shape or form to be more sustainable and efficient. Mitsubishi has been selling electric vehicles while working with other companies to develop more sustainable and efficient EV cars. ITOCHU once again has signed a clean energy deal with Google and is developing new technology to turn waste from their business operations into clean energy. Marubeni is developing new technology and hydro facilities to generate clean energy while also signing clean energy bills with lesser known companies. Sojitz on the other hand is attempting to reduce their carbon emission and seems to be seeing success while also focusing on recycling and using natural gas. Marubeni compared to its competitors seems to once again be struggling with timing and implementation of their technologies and plans for energy and infrastructure. However, this timing issue for the adaptability section is minor as Marubeni is closer to execution than it is for sustainability. An example of this is Marubeni’s investments and deals with clean energy attempting to expand into Saudi Arabia in the towns of Al-ghat and Waad Al-Shamal with a power purchase agreement. Marubeni in the coming century may even find itself ranking higher on adaptability than its counterparts as it’s investing and closing deals in countries such as Saudi Arabia and Indonesia that have untapped potential to boost their sustainability and overall adaptability scores.

Finally, collaboration is another important critical success factor in these varying business sectors. The scores are as follows: Mitsubishi (4), ITOCHU (3), Marubeni (4), Sojitz (3). Mitsubishi continues to collaborate with different companies such as Nissan, Toyota, Honda, and many more automotive companies to ensure the development of environmentally friendly EV cars and technologies. While also collaborating with aerospace companies and space companies to develop ground breaking technology. ITOCHU’s score is difficult to rate as the quality of its collaborations is remarkable as it deals with Google and various subsidiaries providing partnerships just like its competitors. However, ITOCHU isn’t expanding as heavily in terms of collaboration compared to Mitsubishi and Marubeni; instead, it allows its subsidiaries to make

local deals of collaboration with different companies in different regions as opposed to making deals with large companies with immense resources. Marubeni’s collaboration with different companies is stellar as it has partnered with AI-dash, a North American company attempting to use satellites and AI power to maintain energy infrastructure as well as an alliance with REVOX to advance the use of AI in various sectors of transportation and resource procurement. Sojitz has signed a memorandum of strategic understanding and alliance with HIROTSU Bioscience, WHO Foundation, OurCrowd, and Global Health Equity Fund this is meant to propel revolutionary cancer screening tests to ideally one day be able to detect neoplasms (growths) the moment they arise or become cancerous.

Marubeni as a corporation is collaborating heavily with different companies across the world to involve the use of new technology (Artificial Intelligence) that can be revolutionary for the industry. Mitsubishi continues to foster its alliances with neighboring car manufacturers to develop new and evolving forms of technology to push sustainability and energy efficiency. ITOCHU focuses more on the big fish when it comes to energy efficiency partnering with Google while also partnering with local companies in the respective regions of operations. Sojitz is pushing to be a major player in revolutionary cancer screening technology through contributing to a global alliance with other major players.

All of these critical success factors are being fulfilled by each and every company in different ways at different levels. What makes Mitsubishi and ITOCHU stand out above the rest is that they’ve invested more heavily into their main business operations along with areas that may seem to be more lucrative such as automobile manufacturing, aerospace manufacturing, energy and infrastructure development. Marubeni has also invested in these areas but less heavily due to the amount of capital that they have available. Beyond the constraint of capital to invest, Marubeni also struggles with the timing of their projects. Development and planning seems to take up the majority of their hours and they fall behind the big players in terms of execution. Marubeni also struggles to invest in revolutionary technology consistently compared to Mitsubishi, ITOCHU, and Sojitz. However, they are beginning to heavily invest and implore the use of artificial intelligence in their business ventures. Marubeni also struggled with investing in developing markets such as Eastern Asian countries or Middle Eastern countries that may have high potential for growth in the coming future. Marubeni has begun investing in developing countries with untapped potential such as Indonesia and Saudi Arabia. What Marubeni does well is consistently collaborating with companies that eventually turn into integral parts of Marubeni’s supply chain resulting in highly efficient supply chain communication and logistics. Marubeni should be wary of Sojitz as a competitor as Sojitz is heavily investing in revolutionary technologies and using capital funded by various business ventures such as textiles, machinery, and fossil fuels to propel itself to the forefront of the industry in a very short amount of time. Sojitz could very well disrupt the industry with its technological investments or even dethrone big players as it strides into the following century. Marubeni has begun addressing the issues stated at the beginning in that it has begun to invest in areas and countries with untapped

resources and high potential for growth while also investing in potentially groundbreaking technology being artificial intelligence.

Ordering Rationale 1:

After having analyzed the competitive environment, it’s now essential to focus on Marubeni’s internal environment. The awareness gained from understanding external competitive pressures call for a closer look of the company's internal capabilities and resources. The internal analysis will guide us in understanding how well Marubeni is prepared to take on competitive challenges and take advantage of opportunities identified in the competitive landscape. By exploring Marubeni’s strengths, weaknesses, competencies, and resources, we will be able to assess its ability to maintain its position in the market and effectively compete.

Internal Environment Analysis:

To begin this analysis we conducted an Internal Factor Evaluation matrix, we listed some for Marubeni’s strengths and weaknesses and we weighed them against each other. The top strength for Marubeni is its Diverse portfolio, we weighted at a 0.14 while giving it a rating of 4. The reason for this weight and rating is due to the fact that Marubeni is a huge company that does business and many different business sectors, meaning that they have been in many markets and with that expertise it has allowed them to grow their business and their portfolio at the same time. We gave it a 4 because it is one if not the most important part of a business, making money through different streams is very important for a company. The following two strengths are at a tie with bothing having a weight of 0.1 and a rating of a 4 are Marubeni’s global presence and its established supply chains. The reason that global presence and their supply chain are weighed and ranked the same is because they both come hand in hand, one is needed in order for the other one to be great. Without the global presence that the company has it is unable to achieve such global and elaborate supply chains.

With the amount of business sectors that Marubeni is involved in it makes perfect sense for them to continue to have that global presence as a great importer and exporter and this means that their supply chains continue to grow and they can reach even more parts of the world which increase their global presence. These three strengths are very important but that doesn’t mean that the next two aren’t just as good, however we did score them a bit lower at a 0.09 and a rating of a 3. These strengths are its partnerships and skilled workforce. We chose to give these scores, because while these strengths are important they aren’t what will make or break this company. Marubeni has many partnerships throughout the world, it has a partnership with Tim Hortons which can only show you how diverse their portfolio can be. But we still rank it pretty high because without these partnerships there would be no way for Marubeni to enter certain markets. Now regarding their skilled workforce, it may not seem like it would be important, but a company that is as big as Marubeni needs to ensure that their workforce is skilled and knowledgeable in whatever business sector that they work in. Also Marubeni also boasts about

how they employ the best employees that have many years of experience in the field that customers need or want.

Moving onto the weaknesses, the first one being competition, we weighted it at a 0.12 and rated it a 1, the reason for this is because Marubeni has many competitors and these competitors are all trying to get more market share from each other everyday. Huge corporations like Mitsubushi, Itochu and many more international companies like Cargill and Toyota. With so much competition in the markets that Marubeni does business in, that is the reason for its rating and weight. The next weakness for Marubeni is the risks of other countries, we weighted it at a 0.12 and a rating of 1. The reason that we viewed country risks as this high of a weakness is because of the amount of different countries that they do business with. A country could want or need a particular business product, service or intellectual property that Marubeni may have and they could possibly take that from them. Or worse completely take over the business in that country. An example would be the Ukraine war, many companies left the Russian markets due to sanctions and the United States telling them they need to exit said markets. When these companies left, Russia just opened those same businesses with a small change in the name but the exact same product, which like in Mcdonalds case they closed all restaurants and within a week there was a new knockoff restaurant by the name of Tasty.

The next weakness is regulatory risks, we gave this weight a 0.1 and rated it a 1, the reason why it is a weakness is because change in regulation and laws could lead to the exit of a certain market. New laws can affect a business drastically especially if it is in response to something that your company does. For example many countries are trying to eliminate the use of fossil fuels, this led to the change and promise by Marubeni to eliminate the use of all coal by 2050 in all of its business sectors that it operates in. The final two weaknesses were weighed and rated the same; they both received a weight of 0.07 and a rating of a 2. For environmental risks and other disasters we ranked them lower than all the other weaknesses because there is not

much that Marubeni can do during these situations. For environmental risks it is a weakness because with no malicious intention something can occur and it can create an environmental disaster that can not only tarnish the company’s name but can also lead to the end of the company due to the financial burden of the disaster. The last weakness is other disasters, we added this part for only one reason and that reason is COVID-19, the pandemic that crippled supply chains worldwide and sunk many companies into bankruptcy. It is the lowest weakness but companies need to be aware of these sorts of disasters and come up with contingency plans in order to reduce the chaos that these disasters may cause.

Marubeni Corporation, a major Japanese general trading company, operates throughout various industries and throughout different countries. These industries include food, energy, precious metals, and infrastructure.() With the different number of industries that Marubeni operaties in, they need a robust internal environment that is capable of managing the complexities and the variations in each industry in an efficient manner. This analysis will be about its internal environment and is aimed at breaking down Marubeni’s value chain, identify key resources and capabilities, and use the VRIN model to determine if its competitive edge can be sustainable for future growth.

The main activities that Marubeni does are inbound and outbound logistics, operations, marketing and sales, and providing various services.() Their inbound logistics is the cornerstone of its diversification strategy, this enables it to procure and transport its various materials and goods needed for its wide portfolio. Marubeni leverages its extensive and established global supplier network in order to source the materials needed for the various industries that they conduct business in, however in order to create these long term relationships with suppliers they needed to build trust over many years and so it has made their supply chain one of the best worldwide.() With a great relationship between Marubeni and its trade partners it can ensure a stable supply of high quality inputs at competitive prices. Advanced supply chain management systems play a vital role in this whole process, this allows the company to coordinate smoothly, minimize any delays that may arise, and optimize inventory. This efficiency leads to reduction in costs and allows for Marubeni to be able to be responsive for whatever the market may need. Marubeni’s outbound logistics is also quite elaborate and its global distribution network mixed with its vast warehousing infrastructure () is able to support timely and reliable delivery of goods, industrial products or commodities. The company’s capability to handle complex operations through various different industries and doing it world wide shows its competitive strength regarding its inbound and outbound logistics.

The strategic impact of inbound and outbound logistics is very significant, as it is a big contributor to Marubeni’s overall competitive advantage.() Cost saving when procuring raw materials makes sure that those enhanced operational margins get passed down to the consumer with lower and more competitive prices. While the company procures resources, its outbound logistics is efficiently ensuring customer high satisfaction with its timely deliveries and its reliability. This ultimately bolsters Marubeni’s reputation and grows its market presence, together these logistics capabilities are able to seamlessly continue the flow of goods without

many interruptions throughout its diverse business portfolio, helping to drive efficiency and simultaneously supporting Marubeni’s expansive market reach.

Another activity that Marubeni does is that of operations, the company’s operations involve the processing and the transformation of raw materials into finished goods(), and also the management of their complex supply chain. The company leverages its advanced technology and its expertise in operations in order to optimize the production process, while still ensuring high quality and having competitive prices, across all of its products and services. Throughout all the industries that Marubeni operates in, they show a commitment to sustainability and excellence.() Marubeni engages in the production and distribution of various different food products which include grains, seafood, and processed foods, the company has a strict emphasis on food safety and quality. Marubeni adheres strictly to any and all regulatory standards and it also implements high quality control measures.

Similarly, in the energy sector, Marubeni plays a vital role in the development and management of energy projects worldwide. Thes projects span from renewable energy, fossil fuels, and power generation, the company’s operations in this sector prioritize environmental responsibility and they try to promote the transition to more cleaner and sustainable sources. Maarubeni itself has stated that they will try to eliminate their use of fossil fuels by 2050 and has started to cut coal out since 2018. ()

A key strength of Marubeni is its ability to adapt and innovate in response to constantly changing markets and customer needs. Marubeni invests in research and development in order to drive innovation and be more efficient. By trying to understand new technology and exploring different business models, this is a reason why Marubeni is still at the forefront of the industry trends and it helps it maintain its competitive edge in all the industries they do business in. Marubeni’s operational agility helps it by being able to seize certain opportunities that will help expand and grow the company. Whether it may be through strategic acquisitions, partnerships, or internal growth initiatives, this approach to operations management helps to position Marubeni as a forward-thinking company in the global marketplace, with the capability of sustaining and driving value for its stakeholders.

The sales and services are integral parts of the business strategy, aimed at delivering the most value to customers while creating those long term relationships that Marubeni tends to keep for a long time. The approach that the company uses is that of a customer centric approach, they make sure that they tailor their sales strategies so that they can meet all of the customer's expectations and needs throughout the various industries that they do business in. Marubeni’s extensive global network combined with their market expertise, give it the ability to penetrate new markets, while also being agile enough to capitalize on new opportunities. The sales teams for Marubeni are equipped with extensive industry knowledge and technical expertise, making it possible to provide personalized support and service for all Marubeni clients.

While conducting this analysis we also used the VRIN model, we looked into Marubeni’s pricing, global network, their diverse portfolio, partnerships, innovation, financial robustness, and sustainability. For the results of the analysis we figured out the most important resource that

Marubeni has and that is its global network, while creating the model we thought that financial robustness or sustainability would be the company’s best resources but after finishing the model we realized that while yes financial robustness is very valuable and so is sustainability, we soon realized that these two resources are not rare, many other competitors to Marubeni also have robust financials and are also quite sustainable, meaning that its not as rare. Even with that we asked whether or not these two resources could be inimitable and it was a yes for sustainability, because competitors can figure out a way to also become sustainable and however the robustness of their finances is not imitable. The reason for that being is that while there are other companies with great financials which might be better or worse but it can’t be imitated, because of the way that Marubeni created that financial robustness.

Marubeni reached its financial robustness through making its own financial decisions that did not use the help of their competitors, but it did use partnerships in order to achieve this robustness of its finances. Moving into the next resource for Marubeni, this one is their valued partnerships with different companies world wide. From producing new bug protein with their new partner Ynsect() or develop hyperscale data centers with Yondr Group.() Partnerships for Marubeni are very import, they bring a high value, but they are not rare, many companies expand into new market sectors with the use of partners that are already in the sector that said company wants to enter. This becomes a partnership where the companies can come together and bring new innovation into a new market or just introduce a new product that may help the sector or in like in Marubeni’s case, they bring a diverse knowledge and years of expertise that can become valuable when implemented in the correct way. This however does not mean that partnerships are rare and with it not being rare it is not the company’s best resource.

Moving onto pricing, and to be quick with pricing, the ability to price your products and services at a competitive price brings a lot of value for Marubeni, however, this is not rare, it is very imitable, it it can be replaced with a new company undercutting your price then a price war can occur and that won’t be good for either company. The next resource for Marubeni is its diverse portfolio, the company is involved in many different business sectors and it has been quite valuable for them as they can reduce risks by spreading themselves over different business sectors. Is it rare, it is rare, however when we are analyzing big companies like Marubeni it is not as rare for these companies to be in many business sectors as well, so we chose to say that it i8s not as rare only for the reason being that these corporations are huge companies. Their portfolio can not be imitated even if a competitor like Mitsubushi tried, it would take decades to acquire the portfolio that Marubeni has and even with all the money it may not be possible. And it can not be substituted.

The final two valuable resources are Marubeni’s global network and its ability to be innovative and be able to adapt to their markets and anything that they may need to overcome. The ability to be innovative and become adaptable to any market change is very valuable, so valuable that many companies like Marubeni have whole sectors where they invest money and other resources into being able to adapt and change with the markets. This is a very rare resource and can be very hard for a company to want to put in the initial investment which could lead to

an issue with liquidity, especially if it doesn’t go well at first. It is also very hard to imitate, and there are also no other substitutes for innovation and adaptability.

Without a doubt the most important resource for Marubeni is its global network, it is very valuable, the ability to access markets globally while also being able to operate in an efficient manner, makes it very valuable. It also is very rare, as not many companies are able to extend their reach globally while also being in so many different business sectors. The hardest part of this model is it inimitable, the answer is yes. This was not an easy feat for Marubeni, it took many long years, where the company invested highly in and used its expertise to build this amazing global network. The final part of the model, and yes this global market can not be substituted, no way that Itochu or any other competitor can build such a unique network that spans throughout the globe and includes so many different sectors of business, from food, energy, aviation, transportation and many more. This resource is one that can not be substituted and if it were to be removed from Marubeni, it would be the end for the company as they would lose the most important resource that they possess.

Ordering Rationale 2:

With a strong comprehension of Marubeni’s internal environment, now the focus will be shifted to analyzing the industry environment. The internal analysis has provided a comprehensive understanding of Marubeni’s resources and capabilities, which is vital when assessing their ability to respond to trends in the industry. By examining the industry environment we are able to position their strengths and weaknesses in the context of the larger landscape of the industry, identifying regulatory issues, key drivers of the industry, and market trends which affect the industry as a whole.

Industry Environment Analysis:

Rivalry among competitors:

The rivalry among competitors in Marubeni’s industry is highly competitive. Marubeni has many big-name competitors such as Mitsubishi, SOJITZ, ITOCHU and many more. Marubeni is in such an intense industry due to all the large competitive firms that are either similar size or even bigger. All these competitors also offer similar products making it difficult for products to stand out, hence increasing competition. Due to the nature of high price, low frequency each competitor pushes immensely to close a deal. Capacity added in large increments was rated a 3 …

Marubeni’s industry was rated a 2 meaning that this industry shows a great struggle for market share. High exit cost of the industry Marubeni is in is tremendous, which discourages firms from leaving the market and this only makes the rivalry among competitors substantial. Our overall score for rivalry among competitors was a staggering 3.33.

Threats of Potential Entry:

The threat of potential entry for Marubeni’s industry is relatively low due to many factors. In order to get into this industry, it requires a lot of capital and major partnerships. This goes into the lack of scale based and non-scale-based leverage newcomers have to offer in this industry. Due to the inadequate product proliferation and insufficient product differentiation, it is nearly impossible for new firms trying to enter the industry to compete with all these established big-name firms. There is little fear of retaliation due to the focal firm’s lack of excess capacity… new entrants don’t face a problem with this?? Regarding government policy and discouraging entry there is little to none, meaning any firm could enter the market. It is just difficult to enter these markets hence our average score of threats of potential entry is a solid 1.17.

Bargaining Power of Suppliers:

The bargaining power of suppliers is relatively moderate. This is particularly influenced by the small number of suppliers. This means each firm has a little less negotiating power when it comes to these suppliers. On a bright side, these suppliers do offer unique and differentiated products that help each firm's position. Marubeni has little leverage when it comes to these supplies because it is not completely an important customer of suppliers. Marubeni is able to and willing to vertically integrate forward meaning they can be progressive and create their own products themselves, leading them to increase their bargaining power with supplies and competing firms. All together the average score of bargaining power of supplies is 2 which is pretty moderate.

Bargaining Power of Buyers:

The bargaining power of buyers is relatively low. This industry is global and has a vast number of buyers all around the world. Products provide little cost saving or quality of life enhancement..??

Although there are many competitors in this industry all products sold are very similar to other products sold by different firms. Leading the buyers to not have much bargaining power. With buyers not being able to vertically integrate backward this leads them to have to buy from any of these firms in this industry. The average score of bargaining power of buyers is a low 1.25.

Threat of Substitutes:

The threat of substitutes for Marubeni is slightly below moderate. Substitutes are not really superior to existing products in quality and function. Which leads Marubeni to be a great option because there is a lack of substitutes. “Switching costs to use substitutes are low” is a fairly true statement. The threat of substitutes is low with an average score of 2.5.

Is this industry highly attractive, moderate attractive, attractive, or unattractive.

AVERAGE SCORE (3.33 + 1.17 + 2 + 1.25 + 2.5) / 5 = 2.05

Overall this industry is less attractive??? with an average score of 2.05. This industry is really competitive and challenging to maintain profit.

Rivalry Among Competitors

· A large number of competing firms

· Rivals are similar in size, influence, and product offerings

· High-price low-frequency purchases

· Capacity is added in large increments

· Industry slow growth or decline

· High exit costs

Average score

4

4

3

3

2

4

3.33

Threat of potential entry · Little scale-based advantages (economies of scale)

· Little non-scale-based advantages

· Inadequate product proliferation

· Insufficient product differentiation

· Little fear of retaliation due to the focal firm’s lack of excess capacity

· No government policy banning or discouraging entry

Average score

1

1

1

1

2

1

1.17

Bargaining power of suppliers

· A small number of suppliers

· Suppliers provide unique differentiated products

· Focal firm is not an important customer of suppliers

· Suppliers are willing and able to vertically integrate forward

Average score

1

3

2

2

2

Bargaining power of buyers

· A small number of buyers

· Products provide little cost savings or quality-of-life enhancement

· Buyers purchase standard undifferentiated products from focal firm

· Buyers are willing and able to vertically integrate backward

Average score

1

1

2

1

1.25

Threat of substitutes · Substitutes are superior to existing products in quality and function

· Switching costs to use substitutes are low

Average score

2

3

2.5

Ordering Rationale 3:

After assessing the industry environment, it's crucial to widen our focus to include the general external environment. The industry analysis has pinpointed specific factors that affect Marubeni’s sector, but larger political, economic, social, technological, legal, and environmental elements also significantly shape the industry By looking at these factors we can uncover potential opportunities and threats beyond the immediate industry that could greatly influence Marubeni’s success in the long run and strategic choices as well.

General External Environment Analysis:

1. Political Factors: The way politics are in different countries affects how Marubeni does business because it

operates around the world. One big problem is the trade arguments between the US and China. As Posen (2018) says, this fight is about more than just taxes on imports. It also involves who has the most advanced technology and the most power in the world. Marubeni has a hard time doing business in both markets because of the tensions. For example, Marubeni helps supply parts made in China for American products. Infrastructure projects could be carefully examined because of increased security worries8 (Marubeni Annual Report, 2022).

Also, there is a risk of political problems in places like the Middle East and Africa, which have a lot of valuable resources. Incidents like the coup in Myanmar in 2020-2021 show the importance of having strong plans to manage political risks, especially in places where Marubeni has power projects. Kobrin (2020) says that in the 21st century, political risk is not just about taking people's property, but also includes more hidden risks like changes in rules and protests from the public.

The increase in economic nationalism around the world also brings difficulties. Many countries are starting to use protectionist policies, which could disrupt Marubeni's global supply chains. This trend is a reaction against globalization and can cause higher taxes on imports, rules about using locally made products, and limits on foreign investment.

2. Economic Factors: The world economy has been unsteady lately because of things like the COVID-19

pandemic and rising prices. The pandemic caused a recession in 2020, which made industries like energy, commodities, and transportation struggle. This affected many of Marubeni's main businesses. However, the company's mix of different investments helped it stay strong during

8 Marubeni Corporation, www.marubeni.com/en/. Accessed 10 June 2024.

difficult times. This strategy is backed by modern finance theory.After the pandemic, the world's economy is expected to experience higher prices for goods and services. Central banks all over the world, like the Bank of Japan, are making their monetary policies stricter (IMF, 2023). Marubeni has to pay more money to borrow when interest rates are higher. This might make it harder for the company to fund its energy and infrastructure projects that require a lot of money. But, Blanchard and Summers (2020) say that some inflation can mean the economy is getting better. This might make more people want to buy Marubeni's products9.

Changes in the value of money compared to other currencies are also very important. Marubeni is a Japanese company that operates around the world. This means that it can be affected by changes in currency values. The worth of the yen compared to other big currencies like the U.S. The value of the dollar affects Marubeni's ability to compete with other companies and how much money it makes from its overseas business. Research from Döhring in 2008 shows that big companies like Marubeni can use natural hedges to reduce risks. This means they can match the money they make in other countries with the money they spend there, to help protect themselves.

3. Social Factors: Changes in the population and how people buy things are changing markets all around

the world. One important change is that more and more people are getting older in countries like Japan. As Bloom, Canning, and Fink (2010) talk about, this trend can cause not enough workers and changes in what people want to buy for healthcare and for older people10. Marubeni could have chances to invest in healthcare buildings and products for old people.On the other hand, Marubeni operates in many new markets like India and Southeast Asia, where there are lots of young people and the population is getting bigger. This population growth can bring good things like more kids going to school, more people buying things, and more building of roads and buildings. Marubeni is investing in things like smart cities in India, which matches the changes in the population11. (Marubeni Press Release, 2022)

One more important social factor is the increasing number of people in the middle class around the world, especially in Asia. As Kharas (2017) says, this group of people buy a lot of good food and want better technology and buildings. This trend is in line with what Marubeni is interested in. They are interested in food supply chains, telecommunications, and transportation projects.

4. Technological Factors:

11 "Marubeni and Masdar to Develop Offshore Wind Projects." Press Release, 18 Jan. 2023.

10 Bloom, D. E., et al. "Implications of Population Ageing for Economic Growth." Oxford Review of Economic Policy, vol. 26, no. 4, 2010, pp. 583-612.

9 Blanchard, O., and L. H. Summers. "Rethinking Stabilization Policy: Evolution or Revolution?" NBER Macroeconomics Annual, vol. 35, no. 1, 2020, pp. 1-25.

Fast improvements in technology are changing industries all over the world. The Fourth Industrial Revolution is when digital, physical, and biological technologies come together. This can be good and bad for Marubeni.In the energy industry, improvements in renewable technologies are making it cheaper. According to Bloomberg New Energy Finance (2021), solar and wind power are now the most affordable options for building new electricity generation in countries that are home to two-thirds of the world's population. This change helps Marubeni's increasing renewable energy collection, including its investments in offshore wind projects (Marubeni Annual Report, 2022). Digital technologies like artificial intelligence, internet of things, and blockchain are changing how supply chains work. As Treiblmaier (2018) talked about, blockchain can make it easier to see what's happening and follow the path of products in complicated supply chains. Marubeni, a company that handles the worldwide trade of goods, can become more efficient and lower risks by using these technologies. However, new technology can also be dangerous. Online shopping websites and digital business marketplaces are changing the way that businesses buy and sell goods without using traditional middlemen. Porter and Heppelmann (2014) say that smart, connected products are changing how companies compete. Marubeni needs to come up with new ideas to stay important, maybe by using its skills to offer extra helpful services instead of just connecting people.

5. Legal Factors: Laws are getting harder to understand, especially when it comes to things like keeping

data private, stopping corruption, and protecting the environment. The European Union's GDPR has made a new rule for how data should be protected around the world. Marubeni is growing its digital business, and it's important to follow rules to avoid big fines and damage to our reputation.Anti-corruption laws, like those in the United States, are made to prevent and punish dishonest or illegal actions by people in power. The FCPA and UK Bribery Act have a global impact. Because Marubeni operates in places with a lot of danger, it's very important for them to have strong programs to follow the rules. In 2014, Marubeni had to pay a lot of money because they didn't follow the rules. This was because of how they did business in Indonesia. Department of Justice, 2014). Translation: The Justice Department in 2014.Trade deals also affect the laws. The CPTPP, which Japan is part of, makes it easier to trade across the Pacific Ocean. Banga (2016) says that these agreements can make it easier to trade between countries, but they also make countries follow stricter rules on things like workers' rights and protecting the environment12.

6. Environmental Factors: Climate change is one of the biggest environmental problems and has a big impact on

businesses. The Paris Agreement aims to stop the Earth from getting too hot by cutting down on the gasses that make it warm up (UNFCCC, 2015). This change has potential dangers and

12 Banga, R. "Impact of Global Value Chains on the Indian Economy." Asian Development Bank Institute, 2016.

chances for Marubeni.Marubeni's investments in fossil fuels, especially coal, are being looked at more closely for potential risks. According to Ansar, Caldecott, and Tilbury (2013), fossil fuel assets could lose value because of new rules, technology changes, or people’s preferences13. In response, Marubeni has promised to cut its coal power generation in half by the year 2030. However, moving towards using less carbon also brings big chances. In 2021, the International Energy Agency said that we need to invest a lot more money in clean energy every year to reach our climate goals by 2030. Marubeni is ready to take advantage of this trend because it has invested in wind, solar, and hydrogen projects. In 2023, Marubeni partnered with Abu Dhabi's Masdar to work on offshore wind development, showing its new strategic focus. Climate change not only affects energy, but also has an impact on farming, water supply, and buildings. Severe weather can mess up global supply chains, says the Intergovernmental Panel on Climate Change14. Marubeni, which deals with global food trade and water infrastructure, needs to focus on being able to survive extreme weather caused by climate change in order to keep doing business.

External Factor Evaluation (EFE) Matrix:

14 Intergovernmental Panel on Climate Change. "Climate Change 2022: Impacts, Adaptation and Vulnerability." IPCC, 2022.

13 Ansar, A., et al. "Stranded Assets and the Fossil Fuel Divestment Campaign: What Does Divestment Mean for the Valuation of Fossil Fuel Assets?" University of Oxford's Smith School of Enterprise and the Environment, 2013.

External Factors Weight Rating Weighted Score

Opportunities:

O1: Growing demand for renewable energy 0.15 4 0.60

O2: Technological advancements in supply chain management 0.12 3 0.36

O3: Infrastructure development in emerging markets 0.10 4 0.40

O4: Expansion of middle class in Asia 0.08 3 0.24

O5: Trade agreements opening new markets 0.05 3 0.15

Threats:

T1: Climate change regulations impacting fossil fuel investments 0.18 2 0.36

T2: U.S.-China trade tensions 0.12 2 0.24

T3: Political instability in key markets 0.08 3 0.24

Marubeni is doing well because it has a weighted score of 2.90, which is higher than the average score of 2. 5 That means they are handling outside factors well. Marubeni is doing a good job of taking advantage of the booming renewable energy industry and the growing infrastructure needs in developing countries, as shown by the high ratings for opportunities O1 and O3. However, the company needs to work on its plans for dealing with climate regulations and geopolitical tensions because it received lower ratings for those threats.

Overall, Marubeni has a variety of investments and is established in many countries, which can be both positive and negative in this situation. They help the company to bounce back from difficulties and give chances to improve, but they also make the company vulnerable to many risks. Marubeni is good at handling complex situations with a score of 2. 90, but they need to keep adapting and making proactive strategies to stay successful.

T4: Currency fluctuations 0.07 3 0.21

T5: Disintermediation by digital platforms 0.05 2 0.10

Total 1.00 2.90