Kenwood 2003 Annual Report Download - page 9

Car Electronics
Sales (Billions of yen)
Operating income (Billions of yen)
Operating income margin (%)
Home Electronics
Sales (Billions of yen)
Operating income (Billions of yen)
Operating income margin (%)
Wireless Radio
Sales (Billions of yen)
Operating income (Billions of yen)
Operating income margin (%)
Others
Sales (Billions of yen)
Operating income (Billions of yen)
Operating income margin (%)
Total (Consolidated)
Net sales (Billions of yen)
Operating income (Billions of yen)
Operating income margin (%)
117
11.7
10.2
41.9
△ 4.5
△ 11.5
36.5
7.3
20.0
30.2
△ 2.2
△ 7.3
225.6
12.3
5.4
102
9.2
9.0
26.5
△ 0.9
△ 3.4
36
7.3
20.3
20.5
△ 0.1
△ 0.5
185
15.5
8.4
Consolidated
performance by business
Results in the
fiscal year ended
March 2003
Targets for the
fiscal year ending
March 2004
129
12.3
9.5
43
2.5
5.8
40
8
20.0
21
1.2
5.7
233
24
10.3
Targets for the
fiscal year ending
March 2006
Principle strategy and policy
Now that the Company has completed its structural overhaul
under the Kenwood Revitalization Action Plan, it will strive to
achieve the above-mentioned targets. To this end, the Company
will drastically reduce costs and generate cash flows by
innovating production systems. The gains will be reinvested to
develop new products and technologies, plants and equipment,
enhance the brand name, and share profits among the
employees, in order to substantially improve market
competitiveness and profitability. Concurrently, the Company will
concentrate its management resources on the three core
businesses: car electronics, home electronics and
communications (wireless radio).
1. Drastic improvement in competitiveness and profitability
through Production Revolution
The Company will fully leverage the effects of Production
Revolution initiatives to: strengthen competitiveness in products;
develop technologies; make capital investment (plant and
equipment); enhance the brand name; and share profits among
the employees. Through these moves, the Company will
substantially improve its market competitiveness and corporate
profitability.
2. Overhaul of domestic sales structure and development
of five-pronged global sales structure
3. Further overhaul of financial structure to realize a zero
net-debt management
4. Group-wide management and IT system reforms to
strengthen consolidated management
5. Enhancing environmental awareness in the operations
6. Active involvement in industrial rearrangement
Drastic improvement in competitiveness and profitability
through Production Revolution
Succeeded in restructuring, the Company has switched its focus
to the strategy for new growth, and began to innovate production
systems in the fiscal year ending March 2004.
As a first step, the Company established Production Revolution
Headquarters under the direct control of CEO as of March 1,
2003, aiming to revive Japan Manufacturing winning to Asia and
enhance competitiveness at overseas factories.
Under the slogan of Kenwood Quarter QCD Revolution, the
Company is proceeding with Production Revolution initiatives
targeting all of the Group's all manufacturing bases, aiming to
reduce the defect rate for products, administration expenses, and
lead time from manufacturing to sales, to one-fourth (Quarter). It
also plans to cut down on material costs by 10% a year, through
further innovations in the procurement process.
Through its efforts, the Company expects to slash overall costs
by 30% and halve inventories over the next two years.
The savings derived from these initiatives will be passed on to
the efforts to strengthen competitiveness in the market, while
spending 3-5 billion yen annually to develop new products and
technologies, make capital investment, enhance the brand
name, and share profits among the employees. By doing so,
the Company intends to substantially increase its overall
profitability.
Strategy by business
Car Electronics Business
Targets
• Become the top supplier in the global market
• Double net sales by the end of the fiscal year ending March
2006 by boosting the OEM business
• Meet the needs of a growing market by elaborating the
strategy for audio/visual products
07
KENWOOD Corporation Annual Report 2003