Olympus 2015 Annual Report Download - page 11

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One of the new organizations established in the transition to a
matrix style of business operation was the Business Develop-
ment Office, which has been tasked with exploring business in
new fields to support Olympus in the coming era. This organi-
zation will seek out business opportunities and incubate new
businesses in order to expand operations, primarily in medical
and imaging technology fields. At the moment, there are some
opportunities we are still feeling out and some that are coming
together. I am confident that all the investments conducted on
this front will begin producing results over the next several years.
Specific policies for business exploration will be detailed in
the next corporate strategic plan, but I will say that we intend to
expand operations in medical fields in which we can capitalize
on the existing strengths of the Medical Business, namely the
orthopedics and regenerative medicine fields. In the regenerative
medicine field, for example, we are conducting R&D ventures on
treatment techniques that entail extracting cartilage cells from
sufferers of gonarthrosis—osteoarthritis of the knee—and then
cultivating these cells and reintroducing them into the patient.
I feel there is significant potential for this technique given the
projected rise in suffers of this ailment in conjunction with the
aging of the population as well as the fact that Olympus deals
in arthroscopes. Presently, the primary treatment options for
gonarthrosis include artificial joints or open surgeries. For this
reason, the advent of minimally invasive therapies using
regenerative medicine techniques and arthroscopes could
substantially reduce the burden on patients. In this manner,
these fields represent areas in which Olympus can leverage its
existing strengths.
In regard to imaging technology fields, we will strengthen
operations focused on fields in which we can expect ongoing
growth, including automobile-mounted cameras and security
cameras. Strategic investments in the Imaging Business have
been directed at these fields since 2014, and a number of proj-
ects are already under way. The automobile-mounted camera
field is a massive market, and is also highly appealing due to
the potential for cameras to be used in various vehicle models
for long periods of time. At the same time, the need for security
cameras is increasing, and the market for these cameras is
growing rapidly. In these markets, Olympus will target segments
in which highly specialized, high-value-added products are in
demand. We will compete in these segments not by chasing
sales scale through mass production, but by setting sights on
market areas in which we can leverage Olympus’ technological
prowess. For example, our industry-leading image stabilization
technologies could be used to develop security cameras that
are exceptionally resilient to the impacts of seismic vibrations
and wind.
Such technologies are viewed as incredibly valuable.
Even if only in niche markets, we aim to determine the areas
in which Olympus can become No. 1, and devote our
resources accordingly.
Achieving long-term growth requires the development of tech-
nologies for use in future products. The market for our core
surgical endoscopes is currently undergoing a technological
revolution, and we recognize that the tides are turning toward
3D and 4K imaging technologies. Visual cues portraying depth
are incredibly important when conducting surgeries, and 3D
imaging technologies are highly effective at providing these
cues. The 3D laparoscopy surgical system Olympus launched
previously has earned an incredibly strong reputation, and its
sales are exceeding expectations, despite the fact that it is more
expensive than 2D systems. Olympus already has sophisticat-
ed technological foundations related to 3D and 4K imaging
The main point of the next corporate strategic plan will be to in-
corporate a perspective that balances considerations regarding
growth, capital efficiency, and financial soundness, and to live
up to the expectations for Olympus as a global player in the
medical field. Accordingly, a major focus will be determining how
investments should be conducted in the Medical Business to
ensure robust growth while securing a level of capital that can
be considered appropriate based on the Company’s charac-
teristics as a medical equipment manufacturer. To reiterate,
investments are to be directed at the Medical Business, a growth
market. We are considering means of effectively utilizing the
Imaging Business resources born out of the structural reforms
that have been instituted in this business. Fortunately, the trend
toward limiting medical expenses has placed Olympus in an
advantageous position. Accordingly, an important element of
the next corporate strategic plan will be the degree to which
we can leverage this advantage to fuel the overall growth of
the Company, and this will form the framework for the plan.
Another issue of crucial importance will be our ability to strike
a balance between the need to grow and the need to provide
returns to our shareholders.
For information on shareholder return policies, please refer to the “Message from
the CFO” beginning on page 67.
I believe that Olympus is a manufacturer at heart, and that it
possesses amazing technologies. Moreover, I am confident that
these technologies are unrivaled in any field. Developing such
technologies requires a great deal of time, meaning it will take
that much longer for competitors to catch up even if we were to
remain still. I am fully committed to leveraging this advantage to
guarantee that Olympus continues to beat out the competition
in terms of technologies. However, we have no intention of
simply letting our technologies do the talking. We are therefore
working to strengthen sales capabilities to ensure that Olympus
can properly explain as well as use these technologies to
respond to customer needs.
I feel that, today, the market’s expectations for Olympus
are changing; rather than being concerned with the degree
to which we can rebuild, stakeholders are now interested in
seeing how much we can grow. Looking five and 10 years
into the future, we are shifting gears toward management
that emphasizes aggressive action as we pursue our vision
for the Company and the growth that entails. I look forward
toshowing our stakeholders the results of these efforts.
With regard to investment in new businesses, which fields are being targeted
and when do you expect these investments to begin generating returns?
Also, are M&A activities being considered as an option for creating new businesses?
Olympus’ operations in the gastrointestinal endoscope field are highly competitive, and
the Company’s share of this market is dominating. In the surgical device field, however,
European and U.S. rivals are quite formidable. How do you intend to combat these rivals?
What do you, President Sasa, see as the main points that presently
need to be considered in formulating the next corporate strategic plan?
In Closing
The most important concern for Olympus at the moment is the degree to which it can grow its businesses
over the medium to long term. For this reason, it is absolutely essential that we conduct aggressive upfront
investments for expanding our business scope while actively creating new strategic businesses through
M&A activities and other means.
Although we are behind our European and U.S. rivals in terms of sales and marketing capabilities, as
Olympus is a technology-oriented company, we are unrivaled in terms of our products. This means that if
we strengthen our sales capabilities and arm ourselves with superior products, we should be more than
capable of holding our own against the competition.
The policies for the next corporate strategic plan will be substantially different than those practiced thus
far. We are past the phase in which we need to focus on rebuilding Olympus. Accordingly, we will formu-
late the next corporate strategic plan while considering how Olympus should grow going forward and
establishing a vision for the Company 10 years in the future.
technologies. For this reason, were these technologies to
become the de facto standard, the Company would be placed
in a very advantageous position, differentiated by these founda-
tions. Elsewhere, our THUNDERBEAT energy device is another
differentiated product featuring leading technologies. Armed with
this product and our highly competitive surgical endoscopes,
we plan to expand our share in the surgical device market.
We recognize that sales and marketing capabilities will
need to be strengthened to realize such share expansion. It
isfor this reason that we have been focusing investments on
these capabilities in the surgical device field. We are commit-
ted to quickly developing the systems necessary for ensuring
that new products launched in the future meet robust sales.
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Interview with the President
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OLYMPUS Annual Report 2015
18 OLYMPUS Annual Report 2015
Olympus’ Growth Strategies