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Mitsubishi Ufj Financial Group Sun Zi’s Art of War & Business Strategies

Autor:   •  November 10, 2017  •  3,412 Words (14 Pages)  •  174 Views

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strong and invulnerable or the enemy does not know how to attack”

MUFG’s business strategy is designed to increase overall global financial strength and to contribute to the restoration of the Japanese market. Based on the largest customer foundation and world-wide network among Japanese financial institutions and solid financial standing, they aim to continuously enhance corporate value by strengthening cooperation among Group companies, retail and corporate divisions follow by domestic and overseas divisions.

MUFG has planned to become No. 1 in several aspects:

(1) Total Financial Service for Individuals: No.1 in Optimal Life Cycle Planning

(2) MUFG Corporate Solutions Business: No.1 in Total Group Strength (Commercial Bank, Trust Bank, and Securities Company)

(3) Emerging Markets in Asia and Elsewhere: Deposits/Lending, Settlement, and Market-related Businesses : Becoming the No. 1 Financial Services Provider in Asia

(4) Global CIB : Provide World-class CIB Solutions

(5) Domestic and Overseas Asset Management: No. 1 in Pension Trusts

3.0 SWOT Analysis

3.1 Strengths

3.1.1 Leadership in Japanese Financial services industry

Mitsubishi is one of the world’s leading financial groups, with total assets of more than US$1.8 trillion as of 2008. Mitsubishi’s services include commercial banking, trust banking, credit cards, securities, asset management, consumer finance and leasing in more than 40 countries. Besides that, subsidiary the bank of Tokyo-Mitsubishi UFJ operates about 500 branches across Japan and another 80 overseas. Mitsubishi UFJ Financial Group’s operating companies include BTMU, Mitsubishi UFJ Trust and Banking Corporation and Mitsubishi UFJ Securities, all are the Japan’s largest financial service companies.

3.1.2 Largest overseas network owned by a Japanese banking company

MUS, a part of Mitsubishi UFJ Financial Group’s global network of securities broker-dealer. MUS engaged in capital markets origination transactions, collateralized financing, private placements, securities lending, domestic and foreign debt and equity securities transactions. MUS had overseas subsidiaries and affiliates in Tokyo, Hong Kong, Geneva, Singapore and London, which active in markets in America, Europe and Asia. It provided corporate and institutional clients with a complete range of securities and investment banking products and services, with a significant global presence and a strong platform for international growth.

3.1.3 Strong Strategic Alliance with major banks

MUFG invest $9 billion equity and build a global alliance with Morgan Stanley which a global financial services firm and also a market leader in investment banking. Morgan Stanley gives MUFG a 21% ownership interest and becoming the U.S. bank’s biggest shareholder. This alliance relationship will provide both MUFG and Morgan Stanley with a valuable strategic partner in order to enhance their global footprints and capture financial services opportunities around the world.

3.1.4 Have over 33,000 employees

MUFG had over 33,000 employees on 200 operating bases in 80 countries worldwide. Mitsubishi create and sustain a responsive and dynamic workplace for all the employees where everyone can focus on providing outstanding customer service. Recruited the diversity of employees and foster a strong spirit of teamwork in order to achieve the highest levels of professionalism and build the long-term stakeholder relationships.

3.2 Weakness

3.2.1 Limited awareness globally as compared to other big banks

MUFG introduced VASCO to secure its online banking services in order to protect retail banking customers when accessing the bank’s online banking service. However, criminals of attempting steal banking customer’s user IDs and passwords through spoofing tactics had increase in Japan. This hacking was attack on financial institutions in every region of the world. Banking through mobile and online transaction was convenience to customers. However it was also consist of risk of the IDs and password being stolen.

3.2.2 Lack of presence in economies crisis

During economics recession and falling stock markets globally, there are many Japan’s banks managed to avoid the worst of subprime mortgage market’s collapse. However, MUFG invested $9 billion equity into Morgan Stanley, the major bank in U.S. Lately, it have been hammered by the deepening global recession and the dropped in stock prices. Mitsubishi UFJ Financial Group’s profit during that year had lowered its full-year profit forecast by 77%.

3.2.3 Fluctuating margins

MUFG has witnessed fluctuating profit margins during past few years. Based on the Mitsubishi’s financial review, the operating margin of the company decreased from 8.1% in 2007 to 5.8% in 2008 and in 2009 the operating margin increased to 9.7%. However, the net profit margin of the company decreased from 8.3% in 2007 to 7.8% in2008 and in 2009 its net profit margin decreased to 6%. The company’s fluctuating profit margins implies poor decision making and in efficient cost management. This trend had reduced availability of resources to pursue growth plans of the MUFG.

3.2.4 Significant amount of debt

In 2009, Mitsubishi have significant amount of debt. The total long term debt of the company increased 12% from $30,968.2 million in 2008 to $34,677.7 million in2009. Due to an increasing of the debt, the company future borrowings may not be available and insufficient to pay its obligations or to fund other liquidity needs. Therefore, it caused a negatively affect to its liquidity position and credibility in the market and also operations.

3.3 Opportunities

3.3.1 Growing retail banking

Mitsubishi UFJ Financial group (MUFG) is the one of the largest diversified financial services groups in world. Based on the largest customer foundation and world-wide network among Japanese financial institutions and their solid financial standing, MUFG wascontinuously enhance its’ corporate value by strengthening cooperation among Group companies through their corporate divisions in both domestic and overseas divisions. In recent development,

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