Amazon is also split? Separated from store and EC?Reasons for "Corporate Split" Discussion in US Retailing Series: Business Compass to Understand Trends in the US

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Amazon is also split? Separated from store and EC?Reasons for "corporate split" debate in US retail

Series: Business compass to read from trends in the United States

In Japan, in November 2021, Toshiba, which is undergoing restructuring, announced a policy to split into three companies, which became a hot topic. At the same time in the United States, it was decided that the former conglomerate General Electric (GE) and pharmaceutical giant Johnson & Johnson (J & J) would be split in the form of drinking the demands of "shareholders who say things". There is a trend toward deconglomerate. Meanwhile, management said that Macy's, a long-established department store, is considering a plan to spin off the EC department. However, it can be said that this trend is contrary to the movement toward omni-channel that integrates physical stores and e-commerce, which has been promoted throughout the retail industry. We will analyze the US tone as to whether separating real and EC in a company split will lead to growth.

Journalist in the United States Taro Iwata

Journalist in the United States Taro Iwata

Learn the basics of financial and economic reporting at the Tokyo General Bureau of NBC News, the English newspaper department of the Yomiuri Shimbun, and the Nikkei International News Center. Currently, he publishes articles that analyze the US economy widely and deeply in paper media such as "Weekly Economist", while also contributing to multi-channel web media such as "Japan In-Depth" and "ZUU Online". do. He is also involved in long-term interviews with overseas big names, and is good at writing and translating articles such as finance, macroeconomics, energy, and corporate analysis. He provides a wide range of social analysis, including international politics, parenting, education, justice, and crime. He keeps in mind "analysis that is one step ahead of the times".

1. To de-conglomerate, GE, Toshiba, etc. one after another
2. Next, "Amazon" and "Microsoft" decide to split the company?
3. Why the decision of the department store "Macy's" attracts national attention
4. Should Real and EC really be spun off?What is the voice of a US expert?
5. What are the drawbacks of omni-channel?

To de-conglomerate, GE, Toshiba, etc. one after another

It is said that it will help diversify business risks for leading growth companies to own related businesses of their main business and businesses that are candidates for "future rice seeds" and to promote comprehensive manufacturing, and it has been practiced throughout most of the 20th century. I came. Conglomerate will stabilize the overall management by covering the deterioration of profits of some businesses with the high profits of other businesses, and will also enable low-cost financing using the creditworthiness of the main business. There was also a merit. GE and Toshiba are representative examples of such prestigious diversification, and in the past boasted high profitability and influence. It was also a good company with a swelling market capitalization and increased value for investors. However, in some conglomerates, such as the failure of corporate governance like Toshiba and the mistake of management resource investment strategy seen in GE, the giants rather hindered swift management decisions. Contradictions such as high cost constitution due to competition for management resources of each department and duplication of management departments, excessive risk taking due to "stability of giant trees", and oversight of market changes have become apparent. As a result, the past wisdom about conglomerating is being overturned among investors. Under such circumstances, a company aiming to "create an environment in which each split company concentrates on its specialty and specialty fields, achieves the best performance, and the total corporate value of each individual after the split exceeds that before the split." Division and spin-off (separation) have been attracting attention. It has also been pointed out that it will be easier for shareholders to obtain detailed information on the businesses of each new company, which will lead to more accurate investment decisions. Thus, Toshiba will be split into three companies, infrastructure services, POS systems, and various devices, and GE will be split into three companies responsible for aviation, energy, and healthcare. In addition, Johnson & Johnson is a new corona virus for medical institutions and the consumer sector, which has the leading adhesive plaster brand "Band Aid", the representative over-the-counter analgesic "Tylenol", and the medicated mouthwash "Listerine". Divided into two divisions into the pharmaceutical sector, which sells drugs and medical devices containing vaccines.

Next, "Amazon" and "Microsoft" decide to split the company?

In response to this trend, Wall Street has begun searching for candidates as to which company will be the next split. At the U.S. investment site The Motley Fool, forecasts were made at a roundtable discussion by analysts, including Berkshire Hathaway, led by global chemical and electrical materials maker 3M (3M) and well-known investor Warren Buffett. , The names of tech giants Microsoft and Amazon were mentioned. Of these, regarding Amazon, the division of the EC department and the AWS department of the cloud is not only in line with the purpose of the division theory of IT majors that is increasing in the United States, but some investors have said that "Amazon should be divided. Investment returns from each sector will increase. ”There is a possibility that further discussions will proceed in 2022. Microsoft's case is even more specific. CNBC, the US Department of Economic Affairs, aired an interview with Ben Slibka, general manager of the Microsoft Consumer Commerce Group, on January 11. "Microsoft should leave the cloud business centered on Azure in the main body and spin off the Windows operating system and the Office business of productivity services," Slibka said. He pointed out that the competition for management resources within the company would hinder Azure, which is a growth field, as a cause for concern. In addition, Michael Tarin, an analyst at Wells Fargo Securities, predicts that "Microsoft's Azure market share will overtake Amazon's AWS in 2028," and the future where Microsoft will concentrate on the cloud as a spin-off. The figure may increase support. [Next page] The reason why the judgment of the department store "Macy's" attracts the attention of the United States

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