Olympus 2015 Annual Report Download - page 20

Growth Strategies
To accelerate growth in the Medical Business, we will advance
the three basic strategies of working to reinforce foundations
in the gastrointestinal endoscope field, further strengthen the
surgical device field, and expand sales in emerging markets.
The functions for supporting these strategies will also be
enhanced going forward.
Under the new organizational structure, we expanded
the range of units included in the Medical Business to five
business units: the GI (gastrointestinal) Business Unit, GS
(general surgery) Business Unit, Uro/Gyn (urology / gynecol-
ogy) Business Unit, ENT (ear, nose, and throat) Business
Unit, and Medical Service Business Unit. This new structure
will enable us to allocate management resources to fields in
which we have previously failed to conduct sufficient growth
investment, and thereby realize robust growth for the Medical
Business as a whole. Furthermore, we will continue forward-
looking endeavors to expand existing businesses and create
new businesses.
Priority Measures Based on Growth Strategies
1. Reinforce Foundations in the Gastrointestinal
Endoscope Field
In the core gastrointestinal endoscope field, we aim to main-
tain our unrivaled No. 1 position by increasing profitability and
productivity while pursuing ongoing improvements in the high
levels of resolution and the ease of scope insertion and op-
eration of the products we offer. In the endotherapy device
field, an area peripheral to endoscopes, our operations have
previously suffered from an insufficient product lineup and
lack of sales capabilities. Recognizing this issue, we are en-
hancing our lineup through the development of competitive
and differentiated products and strengthening sales systems
in order to expand our market share.
Olympus’ refined technologies and products are also
currently being utilized in the respiratory field. Lung cancer
recently surpassed stomach cancer as the leading cause of
cancer-related death in Japan, and this has resulted in various
checks and detailed examinations being conducted in this
field. For example, endobronchial ultrasound-guided trans-
bronchial needle aspiration is a procedure that utilizes Olympus’
ultrasound bronchoscope to display ultrasound images of
lymph nodes so that samples can be collected using a spe-
cialized aspiration needle. These samples can then be used to
conduct pathological diagnoses for purposes such as providing
a definitive diagnosis of spreading lung cancer.
2. Further Strengthen the Surgical Device Field
Priority measures in the surgical device field including im-
proving Olympus’ brand image, boosting sales of surgical
endoscopes that utilize the Company’s strength in imaging
technologies, and expanding energy device operations. In
particular, we view developing energy devices into a core
business as one of the most important measures to ensure
the growth of operations in the surgical device field. We are
therefore implementing various initiatives in this area, with
one of the most prominent being the strengthening of sales
systems. For example, we established a specialized sales
force in the United States for approaching group purchasing
organizations (GPOs) and integrated delivery networks
(IDNs), which are an important customer segment for the
Medical Business in the massive U.S. market. This sales
force is anticipated to contribute to a rapid growth in sales.
Furthermore, we are promoting the spread of Olympus prod-
ucts by stepping up efforts to provide training in procedures
using these products, and are also enhancing our lineup of
strategic THUNDERBEAT products.
In the surgical endoscope field, the 3D laparoscopy surgi-
cal system launched in 2013 has established an incredibly
strong reputation. Furthermore, in fiscal 2016 we plan to
launch a new product equipped with state-of-the-
art imaging
technologies that was developed by Sony Olympus
Medical
Solutions Inc., a joint venture company created with Sony
Corporation. Armed with our lineup of existing imaging and
energy devices as well as these two prominent new products,
we aim to solidify the position
of the Olympus brand
for
minimally invasive therapies
inthe surgical device field
based on the slogan “See
More and Treat Better.”
3. Expand Sales in Emerging Markets
Emerging countries are experiencing population aging in a
similar fashion to developed countries, and national healthcare
costs are shooting upward. For this reason, fostering new
endoscopists is a pressing task. To address this, Olympus
has established three training centers in China, located in
Shanghai, Beijing, and Guangzhou. The Company is now
amply equipped to respond to the projected growth in train-
ing and after-sales service demand in the Chinese market.
Going forward, we plan to develop training centers in other
parts of Asia with the aim of growing our business by spread-
ing knowledge regarding early diagnosis, minimally invasive
therapies, and other procedures using endoscopes.
4. Enhance Sales, Service, R&D, and Manufacturing
Functions Supporting Business Growth
In addition to strengthening sales capabilities, we are also
actively investing in the enhancement of service, develop-
ment, and manufacturing functions to support the further
growth of the Medical Business.
To strengthen sales capabilities, we conducted strategic
investments in fiscal 2015 to expand our North American
sales forces in the surgical device and endotherapy device
fields by approximately 1,000 people, a move that is contrib-
uting to growth in the surgical device field. We are also in
the process of constructing a new domestic repair base in
Nagano to respond to the rise in repair demand that is ac-
companying sales increases.
At the same time, the Company is expanding production
lines to address the rising global demand for its products. In
Japan, we have invested a total of ¥20 billion to construct
new buildings at our three gastrointestinal endoscope factories,
located in Aizu, Shirakawa, and Aomori. The new building at
the Shirakawa plant is expected to be operational in fiscal
2016. Elsewhere, we are consolidating dispersed manufac-
turing functions for surgical devices and other products in
the United States while also reinforcing existing manufactur-
ing sites. For example, at the new manufacturing site in
Brooklyn Park, in the U.S. state of Minnesota, we are pursu-
ing increases in both production line capacity and efficiency
with a focus on energy devices.
Medium-term
vision target:
Average annual growth of 9%
(gastrointestinal endoscope eld)
Medium-term
vision target:
Average annual growth of 14%
(surgical device eld)
Medium-term
vision target:
Average annual growth of 23%
(emerging markets)
Strategic Policy of GI (Gastrointestinal) Business Unit
• Maintain unrivaled share of
gastrointestinal endoscope market
• Increase sales in emerging
markets
• Expand endotherapy
device operations
• Develop operations
in respiratory eld
• Grow operations
in gastrointestinal
peripheral elds
Improvement of Productivity
Basic Policy of Medium-Term Vision (Medical Business)
• Reinforcement of GI business foundation
• Signicant growth of surgical device eld business
• Sales increase in emerging markets
• Reinforcement of repair / service
• Reinforcement of global sales functions
• Reinforcement of R&D / manufacturing functions
Overview of Fiscal 2015
In the gastrointestinal endoscope field, strong sales contin-
ued for mainstay gastrointestinal video endoscopy systems
EVIS EXERA III and EVIS LUCERA ELITE, making large con-
tributions to overall earnings. Sales growth was also seen
inthe endotherapy device field, where we introduced new
products including QuickClip Pro, a disposable rotatable
clipfixing device to stop bleeding of polyps and lesions.
Inthe surgical device field, favorable sales increases were
onceagain achieved for the VISERA ELITE surgical video
endoscopy system—designed to support endoscopic surgery—
as well as for our 3D laparoscopy surgical system and the
THUNDERBEAT energy device.
We also witnessed the benefits of growth investments
conducted for strengthening sales forces centered on the
surgical device field. As a result of these factors, the Medical
Business achieved year-on-year increases of 13% for net
sales and 11% for operating income, which both set new
records for the second consecutive year.
Aggressive Investment Targeting
Organic Growth
Investments in
R&D
Strengthening of technology
development capabilities
Percentage of R&D
expenditures
to net sales: 8%
Investments in sales
and services
Approx. 1,000 new hires
Establishment of
new repair centers
Investments in
manufacturing
Redevelopment of 3 Tohoku
factories: Approx. ¥20 billion
Reorganization of U.S.
development and
production bases
Investments in
emerging countries
Reinforcement of
sales systems
Activities to promote
spread of endoscopic
procedures
GI Business
Unit
GI
Endoscope
Endotherapy Bronchoscope
CDS* Ultrasound
Endoscope
IT Capsule
Endoscope
Review of Business Segments
* Cleaning, Disinfection and Sterilization
37
OLYMPUS Annual Report 2015
36 OLYMPUS Annual Report 2015
Performance and Strategies by Business