NEC Corporation: SWOT Analysis &
Reference code: BRME004CP10-Q4
Published: Sep 2010
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NEC Corporation - SWOT Profile Page 1
NEC Corporation - Company Overview
NEC Corporation (NEC) is a leading IT and network technology integrated service providers in the world. The company is
engaged in the provision of internet, broadband network and enterprise products such as servers, projectors, storage
devices, monitors, networking and electron devices, and software such as middleware, ERP software, and embedded
system design software across North America, Latin America, Europe, and Asia Pacific markets. NEC offers tailored
solutions in the areas of computer, networking and electron devices through its six business segments, namely, IT
Services Business, IT Products Business, Network Systems Business, Social Infrastructure Business, Personal Solutions
Business and Electron Devices Business. The company is headquartered in Tokyo, Japan.
The company reported revenue of JPY 3,583,148 million during the fiscal year ended 2010. The company's revenue
declined at a compounded rate of 11.91% during the period 2008-2010 with a year on year decline of 15% over fiscal year
2009. During the fiscal year 2010 its operating margin was 0.69% as against the operating margin of -5.51% in fiscal year
2009. During the fiscal year 2010 the company registered a net margin of 0.32% as against the net margin of -7.04% in
the fiscal year 2009.
NEC Corporation - Key Facts
NEC Corporation, Key Facts
5-7-1 Shiba, Minato-ku, , 108-
Ticker Symbol, Stock 6701 (The Tokyo Stock
8001, Japan Exchange Exchange)
Telephone + 81 3 34541111 No. of Employees 119,599
Fax N/A Financial Year End March
URL www.nec.com Revenue (in JPY Million) 3,583,148.00
Industry Medical Equipment Revenue (in USD Million) 38,273.32
Australia, Bangladesh, China, Hong Kong Special Administrative Region of China, India, Indonesia,
Japan, Malaysia, New Zealand, Pakistan, Philippines, Republic of Korea, Singapore, Taiwan,
Thailand, Vietnam, Denmark, France, Germany, Italy, Netherlands, Poland, Portugal, Russian
Locations Federation, Spain, Sweden, Turkey, United Kingdom, Algeria, Egypt, Iran (Islamic Republic of Iran),
Kenya, Saudi Arabia, South Africa, United Arab Emirates, Canada, United States, Argentina, Brazil,
Chile, Colombia, Mexico, Venezuela
Source: Annual Report, Company Website, Primary and Secondary Research
NEC Corporation - SWOT Profile Page 2
NEC Corporation - Business Description
NEC Corporation (NEC) focuses on providing internet, broadband network and enterprise solutions across the globe
through a network of subsidiaries in Japan, North America, Latin America, Europe, Middle East and Africa and Asia
Pacific regions. As of March 31, 2010, the company employed 119,599 employees across all the regions.
The company operates its business in seven business segments, namely, IT Services, IT Products, Network Systems,
Social Infrastructure, Personal Solutions, Electronic Devices, and Others segment.
The IT Services segment of the company offers system integration, maintenance and support, and outsourcing services to
government agencies and private-sector companies. During the fiscal year 2010, the IT Services segment contributed
24.4% towards the total revenues of the company, generating JPY 876,470 million, a decrease of 6.9% over the previous
The IT Products offered by the company include IA Servers, UNIX Servers, Mainframe Computers, Supercomputers,
Storage Products, Professional Workstations, Operating Systems, Middleware and Application Software. The key
customers of IT products and services include the communications service providers, government agencies and
enterprises. During the fiscal year 2010, the IT Products segment contributed 5.8% towards the total revenues of the
company, generating JPY 209,217 million, a decrease of 21.5% over the previous year.
The Network Systems segment offers network systems for communications and enterprise network system. Network
System for communications include network infrastructure, network control Platforms systems and network service
delivery platform. Network infrastructure offers mobile communications systems and fixed-line communications systems.
Backbone networking systems provides sDH systems, WDM systems, routers/switching systems and access networking
systems. Broadband access networking systems comprise of mobile access networking systems and microwave
communications systems. During the fiscal year 2010, the Network Systems segment contributed 21.9% towards the total
revenues of the company, generating JPY 785,881 million, a decrease of 21.6% over the previous year.
The company’s Social Infrastructure segment offers video equipment, broadcasting equipment, control systems,
transformational, Aerospace and Defense, and Fire & Disaster Prevention systems to airports and local governments.
During the fiscal year 2010, the Social Infrastructure segment contributed 8.8% towards the total revenues of the
company, generating JPY 316,566 million, a decrease of 6.9% over the previous year.
The Personal Solutions segment of NEC provides a wide range of mobile terminals such as mobile phone handsets, and
personal solutions including personal computers, personal communications equipment and BIGLOBE internet services.
BIGLOBE Internet service is an information terminal, which aimed at providing better connectivity to its customers. These
NGN tend to form a very strong network and connectivity between various types of networking devices including the
computes, mobile devices and various other users. During the fiscal year 2010, the Personal Solutions segment
contributed 20.6% towards the total revenues of the company, generating JPY 737,870 million, a decrease of 13.0% over
the previous year.
The Electron Devices segment of the company provides semiconductors such as system LSIs, micro controllers, discrete
devices and optical and microwave devices and electronic components such as LCDs, capacitors, Lithium Ion batteries,
Piezo electric devices and Relays. It offers these semiconductors and electronic devices to medical companies for better
solutions. During the fiscal year 2010, the Electron Devices segment contributed 15.9% towards the total revenues of the
company, generating JPY 572,774 million, a decrease of 14.7% over the previous year.
All other operations of the company are reported under Others segment. During the fiscal year 2010, the Others segment
contributed 2.4% towards the total revenues of the company, generating JPY 84,370 million, a decrease of 41.7% over
the previous year.
NEC focuses on research and development (R&D) activities to strengthen its existing technology, as well as to develop
and commercialize new products. Its products are marketed through a network of distributors around the world. The
company's principal market includes Japan and Europe. It holds numerous subsidiaries spread across the world.
The company's geographic segment comprises of four regions, namely, Japan, Asia, Europe and Others. Its Japan region
accounted for 84.4% of the total revenue for the fiscal year 2010, followed by Asia (5.8%), Europe (4.3%) and Others
Recently, NEC has signed an agreement with Aerojet of GenCorp to jointly supply HAYABUSA-derived ion propulsion
systems for the US and Japanese aerospace markets. These ion propulsion systems provide significant advantages for
geosynchronous satellites and deep space missions through fuel efficiencies over 10 times higher than those of
conventional propulsion systems. The company also formed a partnership with Virtensys