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Winners

ORIX Corporation Corporate Finance Section

2002 2nd Porter Prize Winner General Finance
Using its grasp of the needs of small and medium enterprises and its exceptional financing capability to cross-sell 40 types of financial products and services through offices located across the nation

Unique Value Proposition

ORIX Corporation's Corporate Finance Section offers the presidents of small and medium enterprises of both intermediate scale and stability one-stop access to the various financial products and services they need, through 644 business offices located across the nation. This unit has assembled the systems necessary for cross-selling a wide variety of products. For example, each business office's marketing team - not specialized departments - develops plans and creates custom proposals for each customer. These plans and proposals are accumulated and shared, as is know-how for offering solutions to customers, and marketing is a joint effort of product specialists and marketing teams. Furthermore, credit-granting and research capabilities are found not only in the headquarters, but also in individual business offices. And the evaluation system rating marketing staff and business offices is unique for its focus on gross profit, provision and sharing of information, etc.

Unique Value chain
ORIX has created the optimal system for meeting the financing needs of the presidents of small and medium enterprises. This system is characterized by the existence of 644 business offices located across the nation because customers are also located across the nation. Furthermore, the cross-selling of various products and services by individual employees appropriately addresses the needs of small and medium enterprises where the primary decision-making power is concentrated in presidents. And the examination capabilities necessary for financing small and medium enterprises has, through leasing operations that are essentially unsecured financing, been accumulated in each business office.

Profitability
ORIX's return on invested capital exceeds the industry average, and its profit margin greatly exceeds the industry average. The margin of superiority for both is increasing year-by-year and both are rising in absolute terms, as well. It should be noted that the Corporate Finance Section sells the products of other business units and that sales and profit figures for these products accrue to those other business units. This means that they financial results of the Corporate Finance Section are conservatively stated.

Return on invested capital (ROIC)   (Unit = percentage point)
Difference from industry averag
over 5 year period
Difference from industry average, by year
1997 1998 1999 2000 2001
0.40%P 0.23%P -0.60%P 0.53%P 0.785%P 1.13%P
Return on invested capital = Operating income / Average invested capital

Return on sales (ROS)   (Unit = percentage point)
Difference from industry average
over 5 year period
Difference from industry average, by year
1997 1998 1999 2000 2001
19.67%P 16.55%P 11.29%P 19.35%P 22.15%P 28.09%P
Return on sales =Operating income / Net sales

Note 1: Return on Invested Capital = Consolidated invested capital × the Corporate Finance's percentage share of consolidated invested capital / Operating profit.
Note 2: Profit Margin = Operating profit / Operating revenue.
Note 3: ORIX reports accounting information in conformity with US GAAP. If it were to report accounting information in conformity with Japan GAAP, the difference between its performance measures and industry averages would be even greater. Regarding profit margin, this figure should be viewed with the understanding that in the financial sector, profit margin differs significantly among companies due to their individual accounting practices. The Porter Prize Organizing Committee has taken account of this situation and has attempted to at least partially deal with it by computing industry averages with samples of sufficient size.

Activity System Map

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