Kenwood 2003 Annual Report Download - page 10

Numerical targets
• Sales growth: 12.5% annually (Growth through increase in
the OEM business)
• Operating income margin: 9.5% (Gradual rise according to
changes in products and the market)
Strategy
The Company is determined to maintain its top spot in the
global audio field, through continued development of creative
products with the emphasis on the audio to human interface.
In an aim to consolidate its presence in the rapidly growing
navigation/visual market, the Company will boost the
development structure, increase product lineups and expand
sales, thereby improving profitability.
To increase OEM sales, Kenwood will strive to raise this
segment's market share and form alliances with more
automakers. For this purpose, we will develop products for
OEM, enhance production systems and expand sales
structures at home and abroad.
The Company will respond to growing market demand by
enhancing the development structure of navigation/visual
products (navigation and DVD systems) and developing
telematics products.
In R&D, the Company will actively seek cooperation from
other firms.
Home Electronics Business
Targets
• Become the world's top manufacturer specializing in
profitable home entertainment products
• Proceed with operations worldwide, centering on
multimedia, pure audio and portable systems
• Integrate home and car/mobile multimedia, and portable
audio systems under a unified concept, by developing
networked audio devices
Numerical targets
• Sales growth: 27.4% annually (Growth through increase in
new product lines)
• Operating income margin: 5.8% (To make the business
profitable through elaborate product and sales strategies)
Strategy
The Company will strive to become the world's top
manufacturer specializing in home entertainment products,
by proposing new products that are being developed on the
basis of home theaters. The Company will evolve networked
audio devices into home entertainment network systems,
while putting an emphasis on the pure audio (sound) quality
of products.
Communications Business
Targets
• Maintain its 10% share of the global market for commercial
radio communication systems
• Establish a business for supplying industrial-data
communication systems, including wireless LAN
technologies
Numerical targets
• Sales growth: 5.4% annually (Growth expected mainly in
the Americas and Asia, including China)
• Operating income margin: 20% (Maintaining solid
profitability)
Strategy
Kenwood will shift from being a terminal manufacturer to
becoming a system provider in the Americas, the primary
market, by digitizing commercial radio communication
systems and enhancing sales of systems (packages
comprise of communications infrastructure and terminal).
We will expand our communications technology business
in Asia, particularly China, where demand is expected to
grow in the years ahead. Furthermore, we will establish new
business platforms in the industrial-data communication
market, including wireless LAN technologies, aiming to make
them the core of the communications business.
Financial strategy
• Eliminate loss carryforwards and resume dividend
disbursements at an early date.
The Company will dispose of loss carryforwards and resume
dividend payments as early as possible, by strengthening
profitability and tapping into additional paid-in capital.
• Achieve a zero net-debt management, by substantially
increasing cash flows through an improvement in profitability
and reduction in inventories.
Strategy for technological development
• The Company will strive to become a knowledge-based group
that provides customers with exciting through Surprising Ideas,
strengthen the brand name, and provide products that are
suitable for the brand. To achieve this, we will implement the
following technological measures:
We will make great efforts to polish our core competence, while
developing cutting-edge technologies for digital, network and
audio/visual products.
As for the R&D structure, we will enhance expertise and
Kenwood's differentiating characteristics in technologies and
products as we have already established a sound quality
laboratory and technological strategy development center.
08 KENWOOD Corporation Annual Report 2003