Olympus 2012 Annual Report Download - page 29

We will also apply the advanced technologies cultivated in the development of mirrorless interchangeable-
lens cameras to high value-added compact cameras. For instance, the XZ-1 is equipped with a bright,
high-performance lens and the PEN image engine. It has been well received and has maintained a high
share of the market in its category since its introduction in February 2011. Furthermore, in June 2012, we
added a new model equipped with the world’s fastest autofocus available in a mirrorless interchangeable-
lens camera to the Tough series of waterproof, shock-resistant cameras at which Olympus excels. This
model has met with high acclaim.
In this way, we will work to increase product profitability by regularly introducing unique, high-value-
added compact cameras unmatched by competitors while efficiently leveraging development resources, that
is, applying advanced technologies cultivated in the development of mirrorless interchangeable-lens cameras
to high-value-added compact cameras.
In addition to such product innovation, we will greatly improve the profit structure. One way is to
reinforce cost competitiveness by raising manufacturing value-added and enhancing productivity. For
instance, we will increase productivity by introducing the latest production technologies at the Shenzhen
plant in China, focus production on high-value-added lens barrels and interchangeable lenses, and actively
utilize outside production in assembly processes, in which it is generally difficult to create added value.
Furthermore, by fiscal 2015, we will achieve an improvement of eight percentage points in the SG&A ratio in
the Imaging Business through selection and concentration of advertising investment and personnel optimization
in Japan and overseas.
As I mentioned previously, the Imaging Business is simultaneously a brand driver and an optical and
imaging technology driver. An important purpose of the Imaging Business is to apply imaging
technologies created in an adverse competitive environment to the medical and life science fields.
For instance, one strength of Olympus’ Medical Business is technological capabilities in the imaging
field. For gastrointestinal endoscopes and surgical endoscopes alike, the existence of high-value-added,
excellent imaging technologies is a prerequisite to the establishment of new diagnostic methods. Since
product cycles in the Imaging Business are extremely short, Olympus continually operates on the leading
edge of imaging technologies. In the Medical Business, however, to cite one example, the development
period for the EVIS EXERA III, a core endoscopy system introduced this spring, was seven years. Products in
the Medical Business have different lifecycles from those in the Imaging Business, and development cycles
are rather long. If we didn’t have the Imaging Business, a seven-year gap would occur in imaging technologies
that might make it difficult to introduce the latest innovations into the medical field. This would result in a
wide technological gap between Olympus and competitors and might lead us to lose our competitive edge in
development. That is not to say that it is acceptable for the Imaging Business to operate at a loss. By reliably
implementing the measures in the medium-term vision, we will devise ways of creating a business structure
that can continuously and reliably generate
operating income.
Q5
The competitive environment facing
the Imaging Business and the profit
structure seem more adverse than
those facing the other core business
domains. In such circumstances,
what reasons are there for Olympus
to continue the Imaging Business?
A
Providing superb imaging technologies
to the Medical Business and the life
science field
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