Please finish this Firm Audit

timer Asked: May 8th, 2018
account_balance_wallet $40

Question description

Task: Choose a firm within the industry your team analyzed. Ex: If your team analyzed the Fast Food Industry, you could choose McDonalds on which to perform a firm audit. (Subaru please)

Format: 5 page report - 12 font Arial / 1.5 spaced / 1" margins. Students may choose to provide a 1-2 page narrative summary and 3-4 pages of "outline" style body OR provide 5 pages of narrative.

Due Date: 5/18/18 at 12:00 midnight with no penalty. Students who submit by 5/11/18 at midnight will be afforded a 1/3 letter grade bonus.

This is a firm audit and I expect those issues relevant to the firm to be explored. I would not expect a complete Porters 5 Forces or PESTEL analysis at the firm level as they are Industry level tools. However, certain issues identified in your Industry Analysis may be more relevant to specific firms. Ex: A McDonalds Firm Audit would likely include a discussion on Healthy Eating and how they are addressing the topic that would have been mentioned in your PESTEL analysis of the industry.

I would strongly suggest you mention the following:

competitors and competitive advantage. Remember, competitive advantage is identified through 3 metrics: Shareholder Value / Economic Value of Product/Service and Accounting or Financial performance.(Return on Assets / Equity etc compared to competition)

Mission / Vision

Your subject company's place in the industry based on Revenue or other metrics

Core Competencies

The following chapters from the book will help: 4 - 10 with some possible use for chapters 11 / 12.

In your conclusion I would like you to make a clear statement about what the company needs to do to gain or sustain its competitive advantage. If you think they have competitive advantage state your support for that and what should they do to maintain that advantage. If they do not have competitive advantage state your support for that and what they need to do to gain it. Your strategy to gain or sustain competitive advantage does not need to be robust but, should give some indication the path forward. Example: I think Google needs to continue to utilize its innovative business strategy to maintain its competitive advantage in the search engine industry. The company has a flat hierarchy and its 80-10-10 rule has been successful based on the creative people they have hired etc.

Tutor Answer

School: Duke University



Subaru Corporation Audit Report
Student’s Name
Institutional Affiliation



Company Overview
Subaru automaker was launched in 1958 with SUBARU 360 marking its start.
Since then, the company has contributed to the development of the automotive industry
of Japan through creation of a succession of unique cars equipped with innovative
technologies like Symmetrical All-Wheel Drive and horizontally opposed engine. The
corporation continues to take new challenges so as to provide all its customers with a
peace of mind and enjoyment. Headquartered in Tokyo, Japan, it manufactures motor
vehicle parts, automobiles, aircraft parts and industrial machinery. It operates through
Automobile, Industrial products, Aerospace, and other segments (Subaru Corporation,
2018). The corporation currently employs 32 599 persons. Subaru’s vision is to pursue
an appealing business with a strong presence. Its mission statement is to, simply
become the best in all areas of its business by providing exceptional customer
experience, strongly, supporting its community, and becoming the best workplace.
Subaru’s core values include integrity, servant’s attitude, accountability, continuous
improvement, teamwork, and fun (Galpin Subaru, 2018).

Subaru’s Automobile segment produces, sells and repairs passenger cars plus
automobile parts. Its Aerospace segment manufactures, repairs and supplies airplanes,
aerospace-related machineries plus components. The segment of Industrial Products
develops and dispenses engine-equipped machinery, generators, and agricultural
machinery, construction machinery, as well as other machine tools. The segment of
others develops, sells, and leases real estate properties (4-Traders, 2018).
Corporate Policy and Code of Conduct



Subaru respects the regulations and laws, international behavior standards,
human rights, and the stakeholder rights and morals its "Corporate Code of Conduct."
The company is also involved in addressing social issues that face society today as a
corporate citizen. Subaru’s code of conduct is to develop as well as provide innovative
services and products while paying enough attention to safety and the environment
(Subaru Corporation, 2018). The company respects the rights plus individualities of
persons, promotes harmony within the society, and contributes to the society’s
prosperity. It meets the social norms plus and acts with honesty and fairness, in addition
to maintaining global perspectives and aiming at being in harmony with the international
The top competitors of Subaru include Honda, which cannot touch Subaru,
Volkswagen, which Subaru has overtaken in the US market, Mitsubishi, which has
followed the claim of Subaru to fame (4-Traders, 2018). Mitsubishi turns rally cars into
street machines. Another competitor is Nissan, Ford and Volvo, but Subaru is much
better than these, and Kia, which Subaru is outselling. Zuzuki is going after Subaru
buyers and MegaCam but Subaru outperforms them. Other competitors include Skoda,
Quattro, and Lexus.
Financial and Capital Strategies
SUBARU Corporation has grown rapidly in the past few years. Their consolidated
sale have increased in volume from 600,000 vehicles to over 1,000,000. The
consolidated net sales of Subaru have grown from 1.5 trillion yen to over 3 trillion yen
(Subaru Corporation, 2017). Its income has also increased. These extraordinary
achievements in operating margins are attributed to expansion of its production
capacity, substantial growth in the sales volume, particularly in American market, low
depreciation plus amortization expenses, as well as R & D expenses, etc (Subaru
Corporation, 2017).



Subaru engages in daily business management with financial soundness,
shareholder returns, and return on capital as its three key capital policy indicators
(Subaru Corporation, 2017). In particular, Subaru has declared a policy of offering
appropriate shareholder returns whilst maintaining higher degrees of the balance
between the return on equity and equity ratio over the long and medium term. The
corporation also balances these objectives skillfully as the cornerstone of their capital
policy. The company has a history of achieving extraordinarily higher profits when
compared to the industry average. In the 2017 FYE, Subaru’s ROE was extremely high
at 20.2 percent (Subaru Corporation, 2017). However, this is in part attributable to the
positive conditions like the time variance between the cost increases and profit growth.

Subaru continues to pay attention to the increasing equity of its shareholders and
creating a steady financial base so as it can survive any swift changes in its business
environment. The corporation also intends to boost the returns to its shareholders. It
makes dividends based on the shareholder returns and its policy of paying continuous



as well as performance-linked dividends. In 2017 and 2016, shareholder dividends was
144 yen per share. The range of consolidated dividend payout ratio for Subaru has risen
from 20-40% to 30-50% so as to keep the dividends stable (Subaru Corporation, 2017).
Subaru does so by considering the business performance each fiscal year, business
environment, and investment plans.

Major Shareholders

Financial Performance
Total assets of Subaru as of 31st March 2017 were 2,762.3 billion yen. This was
an growth of 169.9 billion yen when compared to the previous financial year-end. The
current assets ...

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Top quality work from this guy! I'll be back!

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