Nikon 2006 Annual Report Download - page 6

as well as the observation of live cells. Besides seeking to
aggressively develop highly creative new products that
match the needs of the market and the times, Nikon
will expand business and boost profi tability by further
strengthening sales and marketing competencies.
Nikon is also proactive in its stance towards enter-
ing new markets in which we can apply our technical
advantages. For example, we are presently planning to
advance into the fi eld of industrial consumption mate-
rials with our glass materials and component related
businesses. This fi eld is expected to contribute to higher,
more stable profi ts for the Nikon Group.
Initiatives to shorten
development lead-time and
reduce manufacturing costs
One of the key factors behind greater-than-expected
profi tability in Precision Equipment and Imaging
Products was the shortening of development lead-time.
Promoting simplifi ed design and module standardiza-
tion enabled us to boost profi t-earning capability in
Precision Equipment, while we were successful in drasti-
cally cutting development lead-time for digital cameras
in Imaging Products. As a result, we are well on the way
to establishing a structure that allows swift response to
fast-changing market needs.
Moving ahead, we will strive to further reduce manu-
facturing costs through the inauguration of a company-
wide project that aims to trim both lead-time and cost.
Activities such as these are expected to help expand
Nikon’s profi tability.
Increase capital investment and
R&D investment to drive
future growth
One of the focus points of the medium term manage-
ment plan is to increase capital investment and R&D
investment. In the three-year period that the plan cov-
ers, Nikon plans to raise capital investment by 20%
and R&D investment by 60% compared with the prior
three years. Apart from investment in the development
of next-generation steppers and scanners in Precision
Equipment, and of second-generation digital cameras
in Imaging Products, we will work to strengthen com-
petitiveness in the bioscience fi eld in Instruments while
aggressively channeling funds into R&D for new busi-
nesses and elemental technologies.
Bolster corporate governance
Amid continued globalization of the business environ-
ment, increasing management effi ciency and transpar-
ency, and strengthening the monitoring and supervision
of business execution are integral to achieving stable
corporate growth over the medium- to long-term. At
Nikon, corporate governance is viewed as a top manage-
ment priority, and as such, we are working hard to create
and enhance crucial organizational controls and systems.
Initiatives taken to strengthen corporate governance are
outlined on pages 22-23 of this Annual Report.
Finally, as members of top management, it is our duty
to relay the fact that Nikon is now undergoing immense
change. Another key objective of the medium term man-
agement plan is to foster a free and open-minded corpo-
rate culture so that motivation levels are optimum and the
opinions of all employees, including young engineers, are
more readily heard at the management level.
Although we achieved record profi ts in the year ended
March 2006, this marks but one step towards our goal of
new innovation. Numerous issues remain if we are to lift
the bar even further, but with the collective and unifi ed
efforts of all management and employees, we are confi -
dent we can meet the expectations of shareholders and
investors.
We look forward to your continued guidance and sup-
port as we strive to achieve the objectives we have set.
Michio Kariya
President, Member of the Board,
Chief Executive Offi cer & Chief Operating Offi cer
Ichiro Terato
Executive Vice President,
Member of the Board & Chief Financial Offi cer
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