Pentax 2014 Annual Report Download - page 14

HOYA REPORT 2014
The role of COO in the
Information Technology segment
In regard to the Information Technology segment, my role is
to generate stable earnings in mature markets, as part of
HOYA´s business portfolio management, and I aim to increase
the profitability of each product and maximize cash flow. As
many existing products have entered a mature phase in their
growth cycle, we need to continue to be “a big fish in a small
pond.” by further strengthening our competitiveness or
achieving differentiation from our competitors. To that end, as
the Information Technology COO, I am promoting firstly
expansion of market share, secondly restructuring, and thirdly
the use of existing technologies in growth areas.
Regarding the first objective of expanding market share, in
order to reap the benefit of being a survivor in mature markets, we need to have high market
share. At present, in each business in the Information Technology segment, we are drawing
up business strategies focused on becoming “a big fish in a small pond.” Specifically, we are
promoting the kind of initiatives that will put HOYA far ahead of its competitors in all areas,
such as technology, quality, cost, and delivery. There are some businesses where we have
high market share of 80% or 90%, but there are also businesses where even the top market
share is at a level of 30%, so we intend to continue to make efforts there.
I experienced the sale of a business while I was head of the HDD Glass Media Strategic
Business Unit (SBU) (the business transfer to US-based Western Digital Corporation in
2009). I think this was a reasonable decision from the viewpoint of the entire HOYA Group,
but as an interested party of the business, I still regret the fact that we were unable to acquire
top global market share before the sale. Based on this experience, I will manage all the
products that remain in our Information Technology businesses with the aim of achieving top
global market share.
Regarding the second objective of restructuring, we have attempted to shift to a structure
where we can maintain profitability, even while markets are contracting and sales are
declining, through selection and concentration. As a result, sales have decreased by 27%
from ¥218.4 billion in fiscal 2010, but the segment profit margin has risen from 21.3% at the
time to 22.5%. In fiscal 2014, we strove to improve profitability in the HDD substrate and
imaging related businesses, in particular, mainly by consolidating overseas production bases
and reducing the cost of sales. As for restructuring, we have almost managed to realize the
targets we advocated when I was appointed a year ago.
In the case of the third objective of using existing technologies in growth areas, we will seek
business opportunities in new markets that we have not ventured into yet by applying the
advanced technologies that HOYA possesses. Products that we are specifically considering
at present include lens units for smartphones, lenses for security cameras, car-mounted
camera lenses, and HDD glass disks for servers. They are all large markets, but I believe
there are areas in these markets where we can display HOYA´s strengths. In the short term, I
do not think these products will compensate for the decline in sales of mature products, but
in the long term, we intend to boldly take on the challenge of these markets with the aim of
strongly nurturing these products into core earnings sources.
To improve profitability
and maximize cash flow:
1
Expand market share
Beat the competition in all
areas, such as technology,
quality, cost, and delivery
2
Restructuring
Consolidate production
bases and reduce cost of
sales
3
Use existing technologies
in growth areas
Develop new markets and
new applications
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