Konica Minolta 2005 Annual Report Download - page 14

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12
Overview of the V-5 Plan
AIMING FOR SMALLER SCALE AND AN EARLY RETURN TO PROFITABILITY
IN PHOTO IMAGING
While the Group focused its efforts on structurally reforming the Photo Imaging
business, as the market environment deteriorated faster than anticipated, these
reforms in retrospect did not proceed fast enough.
In photo materials, the main color film business continues to see a significant
shrinkage in demand in keeping with the growth of digital cameras. In addition,
the photographic paper business remains weak.
As profitability in the camera business continued to deteriorate because of
intensified competition in digital cameras, the Group shifted its emphasis from
volume to profitability. While good momentum was achieved as a result of the
release of high value-added products, the Group was unable to reverse the structural
losses in the business.
Under the V-5 Plan, the Group aims to take the rapid changes in the market
environment and competitiveness into account in working to scale back the business
and achieve an early return to profitability.
In terms of specific countermeasures to achieve an early turnaround, the Group is
forecasting extraordinary losses of ¥34 billion over the four years covered by the V-5
Plan, as it works to scale back the business and implement further restructuring in
eliminating unnecessary production facilities and consolidating sales offices.
PRODUCT SELECTION AND CONCENTRATION
One of the basic tenets of Konica Minolta’s strategy is selection and concentration,
while the Group was admittedly loose in its product selection and concentration in
responding to the fast-paced changes in the Photo Imaging business in fiscal 2004.
Consequently, in color film, photographic paper and other photosensitive material
segments, the Group intends to scale back the business and focus on establishing
profitability.
In digital cameras, the Group will also focus on profitability in paring back single
lens reflex and other high value-added products, and intends to thoroughly
implement other policies to stem the flow of red ink. In the camera business, the
Group is developing new businesses leveraging its technological strengths, such as
Konica Minolta’s proprietary anti-shake, auto-focus and zoom technologies.
Photo Imaging
Sales Trend
(Billions of Yen)
300
200
100
0
20042003 2005 2009
(Plan)
Photo / Camera
Sales
(Billions of Yen)
Camera
Photo
0
100
200
300
20042003 2005 2009
(Plan)