Toshiba 1997 Annual Report Download - page 19

17.
The consumer products and others segment has reported an operating loss for the past
several years. What actions is Toshiba taking to return to profitability?
We are already seeing significant benefits from the actions we initiated some time ago. The segment’s
operating loss has declined from ¥29.4 billion in fiscal 1995 to ¥17.3 billion in fiscal 1996. Our basic aim is
to accelerate the pace at which we streamline the management structure and boost efficiency. At the same
time, we are concentrating resources on developing products that can have a significant impact on markets.
One way is improving an existing product, like washing machines that conserve water. Another way is
creating entirely new lifestyle-based products, like interactive TV. We are withdrawing from unprofitable
lines. Audio products and home video cameras are two examples. Toshiba can then concentrate investments
on market sectors with more growth potential. We will continue this process to focus a rising share of our
consumer products businesses on market sectors where we can generate a good return.
In Japan, downward pressure on home appliance prices is becoming more intense. How is
Toshiba responding to this challenge?
In fiscal 1996, domestic shipments of many home appliances rose in terms of volume. However, this
growth coincided with a rapid drop in prices. This situation mandates that we introduce products that can
stimulate new sources of demand. Such products must accurately target today’s consumer needs and incor-
porate clearly defined concepts. With regard to manufacturing, we are continuing to take every step we can
to hold down costs. We are expanding overseas production of high-volume items where price competition is
most pronounced. Much of this growth is taking place in Asia, which is also a region where sales of home
appliances are increasing rapidly. These actions will enable us to continue selling home appliances and
electronics at competitive prices.
A
Q
Q
A
As progress is made in cutting costs, are there plans to foster products and services that can
stimulate higher sales of consumer products?
A variety of new digital video products are now sparking demand for many kinds of consumer goods. In
the second half of 1996, for instance, we launched the CS digital tuner and IT vision interactive broadcasts.
We expect that such digital products will begin to gain widespread consumer acceptance in 1997. And this
should lead to more consumer interest in wide-screen TVs, high-resolution projection TVs and similar
products. Toshiba was a leader in the realization of the IT Vision interactive TV system. There are now two
TV stations, one each in Tokyo and Osaka, broadcasting IT Vision programs. They plan to raise IT Vision to
20 percent of all broadcasts from the present 15 percent. These programs will soon appear in Nagoya too,
and eventually throughout Japan. Toshiba played an instrumental role in establishing the IT Vision standard,
just as we did with DVD. By developing new sources of demand, we are determined to preserve our position
at the vanguard of innovation, creating products that are based on entirely new concepts and lifestyles.
Consumer Products & Others Strategic Overview
Q
A
97CY
0
50
100
150
98 99 2000 2001
(million units)
Global Color TV
Demand Estimate
Wide-screen
Conventional
Source:Electronic Industries
Association of Japan
17.
93March
0
3,000
6,000
9,000
94 95 96 97
(thousand units)
Air Conditioner &
Refrigerator Shipments
in Japan
Air conditioners
Refrigerators
Note: Air conditioner figures are for
years ending in September.
Source: Japan Electrical Industry
Development Association