Konica Minolta 2012 Annual Report Download - page 22

While these personnel requirements are pronounced,
competition among companies acquire human resources is
intense. Inability to recruit and retain competent human
resources could adversely affect execution of the Group’s
growth strategy.
(9) Alliances with Other Companies
The Group is enhancing competitiveness and effi ciency by
collaborating with other companies through means including
technology and business alliances and joint ventures.
In the Business Technologies Business, the Group moved
to enhance its IT services by continuing to make acquisitions in
North America and Europe during the fi scal year ended March
31, 2012 that strengthened its business base. In the production
print business, the Group responded to diversifying needs in
the commercial printing market by concluding a global sales
agreement in the commercial printing market in February 2012
with Japan-based Komori Corporation. In May 2012, the Group
also acquired FedEx Kinko's Japan Co., Ltd. to provide various
solutions in the corporate in-house printing market. The Group
will continue to forge alliances and make acquisitions as a
strategic growth option.
Mutually supplementing technology and expertise under
agreements with other companies strongly helps the Group to
provide new products and services that respond to customer
needs in a timely manner. Inability to continue collaborative
relationships for operating, fi nancial or other reasons or
inability to achieve the expected outcomes of such
relationships could adversely affect the Group’s growth
strategy.
(10) Rising Raw Material Prices
Rising prices for metal products including silver, steel and
aluminum; petrochemical products made from crude oil; and
other raw materials that the Group uses in its production
activities could affect the Group’s results. The Group works to
reduce costs and raise the prices of its products as raw
material prices rise, but cannot guarantee that it will be able to
completely compensate higher raw material prices. Raising
product selling prices may also reduce sales volume.
(11) Raw Material and Resource Procurement
The Group procures specifi ed products, components and
materials from external suppliers. Unanticipated contingencies
among these suppliers could adversely affect the Group’s
production and supply capabilities.
In addition, the limited supply of scarce natural resources
such as rare earths remains a concern. While the Group is
working to reduce the amount used and fi nd alternatives for
these scarce resources, supply disruptions could interfere with
production continuity and adversely affect the Group’s results.
Legal and Litigation Risk
(12) Intellectual Property
The Group accumulates differentiating technologies and
expertise in the course of product development to ensure the
competitiveness of its businesses, and works to protect these
intellectual property rights. However, legal constraints in certain
regional areas may preclude full protection of intellectual
property and render the Group unable to prevent third parties
from manufacturing and selling products that employ the
Group’s intellectual property.
Furthermore, the Group tries to avoid infringing on the
rights of other companies in developing products. However,
differences of opinion or other factors may result in the
assumption that the Group is infringing on the rights of other
companies, which could render the Group unable to use
important technologies or make the Group responsibile for
paying signifi cant monetary compensation.
Furthermore, in the future the Group may be prohibited
from using intellectual property rights it currently licenses
from third parties, or such use may be subject to
unreasonable conditions.
(13) Healthcare Systems
The Group’s Healthcare Business is subject to the
ongoing infl uence of the healthcare systems and approval
processes of the countries in which it operates. Factors
including healthcare system reform could result in signifi cant
and unanticipated changes healthcare administration policy.
Inability to respond quickly to changes in the operating
environment in the Healthcare Business could adversely affect
the Group’s results.
(14) Environmental Regulations
The Group is subject to various environmental laws and
regulations governing issues including air pollution, water
pollution, removal of hazardous substances, waste treatment,
product recycling, and soil and groundwater contamination.
The Group may incur expenses and fi nancial liabilities for
environmental obligations associated with past and present
manufacturing activities. In addition, the Group may incur
additional compliance obligations and expenses if
environmental laws and regulations become more rigorous in
the future, which could adversely affect the Group’s results.
(15) Information Leaks
The Group obtains personal and confi dential information
on customers and business partners in the course of
operations. The Group has a system for managing this
information and implements measures including employee
training, but unexpected contingencies could cause this
information to leak externally. This could expose the Group to
liability for damages to injured parties, and could adversely
affect the Group’s credibility and image.
In addition, leakage of the Group’s confi dential information
related to matters including technology, contracts and
personnel could adversely affect the Group’s results.
Disasters and Other Risks
(16) Disasters
The Group centers on a holding company, Konica Minolta
Holdings, Inc., and operates globally. It encompasses bases
worldwide involved in activities including R&D, procurement,
production and sales. Disasters including earthquakes, fi res,
typhoons or fl ooding; pandemics similar to the outbreak of
H1N1 infl uenza; or war, acts of terrorism or computer viruses
could damage the Group’s facilities, temporarily halt operations
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