Oki 2002 Annual Report Download - page 5

Oki Electric Industry Co., Ltd. Annual Report 2002 3
The revisions to Phoenix
21 Sky-High place a new
emphasis on a qualitative
business structure. Can
you provide more details
about this change?
INTERVIEW WITH THE PRESIDENT
We used to emphasize sales growth,
assuming that profits will grow if
sales grow. We realized, though, that
growth might slow and business become unprof-
itable if we can’t compete with other companies.
So our revised plan stresses qualitative improve-
ments, such as concentration of resources in
businesses in which we have a competitive
advantage and withdrawal from those that are
not yielding a profit. With these measures, I
think it’s realistic to expect ¥800,000 million in sales and ¥48,000 million in
operating income by fiscal 2006.
Our information systems segment focuses its resources on business areas
that stand out for their high potential. One of these is banking branch
systems and ATMs for financial institutions. We gave this business area
new independence by setting it off as a separate in-house company, the Financial
Solutions Company.
Also, Japan’s financial institutions are gradually reorganizing. This will probably
spur domestic investment in IT systems in Japan, which has been slow to date. We
should be ready to offer network solutions such as VoIP and CTI, in addition to ex-
isting financial systems, by the time this reorganization is complete.
We can also improve revenue by shifting from the saturated domestic market for
ATMs to the People’s Republic of China (PRC), taking advantage of the lower
production costs. This is also an opportunity to gain a foothold in the Chinese market.
The IT market for government and public offices has high potential. So many
companies have entered this market, however, that price competition has become
quite severe. Despite this fierce competition, e-government and ITS sectors have
great potential to grow, and since more revenue can therefore be expected in these
areas, we will focus on them.
On the other hand, we expect to see strong growth in color printers for corpora-
tions and the small office–home office (SOHO) market. I think our LED engines
will improve sales of high-speed and small-scale color printers. That’s a prime
example of the way we can use our competitive advantages to raise revenue.
It looks as if the informa-
tion systems segment has
very low revenue relative
to the level of sales. What
will the Phoenix 21 Sky-
High plan do to improve
revenue measures?
Q
QA
A
Revised Goals for the Phoenix 21 Sky-High Plan
Fiscal 2003 Plan Fiscal 2006 Goal
Net Sales ¥640 billion Over ¥800 billion
Operating Income ¥8 billion Over ¥48 billion
Return on Equity (ROE) — Over 12%
Oki Electric Industry Co., Ltd. Annual Report 2002 3