Calsonic Corporation Plc - company overview

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CALSONIC LLANELLI RADIATORS PLC

Calsonic Corporation Plc is a leading specialist in design, development and manufacture of heat exchangers, engine cooling systems and air conditioner systems and catalytic converters. It is based in Japan but has spread over many other areas of the world, including Llanelli in Wales.

The Llanelli plant is one of many other company’s which has belonged to the Calsonic Corporation for the past 13 years. The Japanese organisation is a Public Limited Company, which is where the company can offer their shares to the public, often through the Japanese stock exchange.

Calsonic Corporation find that there are many Constraints and benefits from this type of ownership.

These are:

ADVANTAGES

  • Being a larger company, Calsonic Llanelli now gain more finance and because of this finance, they can benefit for economies of scale. This is where the larger companies can buy in bulk for much, much cheaper. This brings down the costs of basic components and raw materials. Very often the larger the company, the cheaper the costs.  

  • While the company has this money permanently, the individual owners can recoup their money by selling shares to others.

  • The company can sell share to any member of the public. And the sale of these shares enables larger sums of money to be raised.

  • Directors may be brought in as experts in certain fields of the business.

DISADVANTAGES

  • There are many legal requirements to fulfil in setting up a public limited company

  • Regulations mean that a company has to raise at least fifty thousand pounds share capital before they can set themselves up as a Plc, although some companies that are already registered can be bought ‘off peg’

  • The accounting of a company is less than private than for other forms of organisations, as audited accounts must be sent to company’s house.

  • Directors must report back to shareholders at the annual general meeting (AGM) where unpopular decisions and poor results must be explained.

Although Llanelli Radiators is part of the Plc Calsonic Corporation, Llanelli Radiators is actually run under a Ltd ownership, which is where they cannot offer their shares to the public, this is because they are owned by the larger Calsonic corporation in Japan. LTD’s tend to be smaller organisations although many have substantially more share capital than some of the smaller Plc’s.

Calsonic Llanelli Radiators find it very helpful being owned by a large, more mature organisation n Japan, this way the two organisations can share ideas learn from each other and Japan can fund Llanelli with new projects and features. Although it is very useful for Calsonic to be owned by Japan, there can also be some drawbacks, like the problem of speaking different languages and the distance needed to be travelled for visits.

ADVANTAGES OF BEING AN LTD

  • Being a ltd, Calsonic Llanelli Radiators get to choose their shareholders, they can invite customers to buy shares .
  • Limited liability means that if the company fails then the owners and managers of Calsonic do not lose their houses, possessions etc

Disadvantages of being a ltd

  • Decisions must not be made by a single person everyone must have their own say in decision making
  • Profits must be shared between the company owners.

CALSONIC LLANELLI RADIATORS – OBJECTIVES

Calsonic Llanelli radiators have many main aims and objectives, some of which are listed below.

  1. Profits – This objective is important to any company in any market. Calsonic need to make a profit to stay in the market and to stay alive. Once they are gaining a large profit, Calsonic then have the option of future expansion and growth and therefore this could allow them to become more powerful within the markets they operate in.
  2. To expand sales to 250million by 2005 – If Calsonic do this they will be increasing their sales, profits and market share. This can make them the market leaders. It is important for any company to have a strong and secure foothold within the market/s they operate in. Calsonic are seeking to increase their market share as one of  their main objectives in order to improve their strength secure placement in the market place.
  3. Improve quality to the global Calsonic standards – if Calsonic improve the quality of their products to make them as good as the other Calsonic corporations around the world this will help them sell more, therefore they will increase sales and increase profits. They will do this to keep their customer loyalty and increase their market share. If the customers are satisfied with their products they will come back to Calsonic and this will increase their market share.
  4. Develop products to support customer global requirements – improve their radiators to make them what the customer wants – the customer is always right! Again if they do this they will keep the customers happy and gain customer loyalty. This could increase their market share and profits.
  5. Develop strategic alliances for future business expansion – if they do this then they will be able to expand and become a better company. By expanding they may lose profit for a while but once they get started they can gain the profit back easily. If they do expand it will increase customer awareness and increase sales and profits
  6. Improve employee involvement and development – involve the employees more, train them to achieve NVQ’S and further qualifications. If they can do this then they can improve everything, if the employees are trained to do their individual jobs, they will improve the quality of their products and therefor decrease customer complaints and increase sales and profits.

In my opinion, Calsonic’s works teams are working together really well to meet the organisation objectives.

All the departments do their own part in making the business successful.

To make sure they make a good profit Calsonic need to increase sales and reduce costs.  I was given the sales figures for the past 7 years which showed sales increasing from £56 million in 1993 to £116.45 million in 2000, this shows they are successfully managing to increase sales which will help them achieve their objective of more profit.  I am also able to look at how successful they have been in reducing costs which will also help increase profit.  I have based my opinion on the graphs that Calsonic use to record the year’s progress.  The scrap graph shows the number of scrap decreasing which will reduce costs as will machine downtime, because if their machines are working efficiently they can get more radiators made.

 By reducing the scrap and the process defects they are helping to achieve objective number1 of increasing their profits, if there is less scrap then they will not be throwing away their money and then can increase their profits. By reducing the process defects, there will be fewer problems with their products and therefore less money lost on replacing products.

With the customer defects graph shown in the appendix, I can see that they are well on their way to developing products to meet customer global requirements another of their objectives, near the end of 2001 there were many less customer defects than in 1999, this shows that they are trying harder and are nearly near their target.

By looking at the skill development graph, I can see that they are also not far from meeting objective number 6, they are much closer and sometimes meeting their target of employee involvement.  This is because they have set up improvement teams which work like quality circles where workers are asked for their opinions before decisions are

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made.

All these graphs have convinced me that Calsonic are on their way to achieving 100% of their objectives. I think that they are going about achieving them well and are on the right track to success.

Appendix 1,2 and 3  are the graphs that help me decide whether Calsonic were meeting their objectives

MEASURING SUCCESS

Calsonic measure their success in many different ways, using graphs and diagrams. One of the main ways Calsonic measure their success is by benchmarking their business against Japans business.

Benchmarking is a technique for comparing the performance of one ...

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