Casio 2004 Annual Report Download - page 14

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3
We are aiming to achieve the
goal of strengthening our
business structure. Therefore,
we will work continuously to
bolster our nancial position
and reduce the ratio of material
costs to sales. At the same time,
we will place more emphasis on
our ve strategic businesses,
described below.
Casio’s Medium-Term Targets
Reinforcement of earnings capacity
1. Major reductions in the ratio of materials procurement costs to sales
We established a new organization (the Production and Purchasing Headquarters) re-
sponsible for materials procurement in December 2003, with the goal of reducing the
cost of sales, which accounts for just over 70% of sales. This organization will lead the
campaign to work to realize the benets of scale by reducing the number of suppliers
of components, and seek cost savings by broadening the scope of local procurement of
components in overseas markets. The organization will also seek the optimal cost struc-
ture from the planning stage of new products, in close collaboration with the Product
Development Headquarters, which is responsible for product development. Specically,
it will make efforts to reduce the number of components, share platforms, and shorten
lead times in development, to drastically reduce the ratio of materials procurement cost
to unit price.
2. Expansion of measures in our strategic business areas
The following is a list of our strategic business areas. We plan to further expand our total
business scale by concentrating management resources in these areas:
• Digital Cameras
• Electronic Dictionaries
• Solar-powered radio-controlled watches
• Cellular phones
• TFT LCDs
Please see pages 13-15 for more details regarding plans for expanding each business.
Reinforcement of management strengths
1. Reinforcement of nancial position
To expand operations, the Company must have a strong nancial position. We will
implement the following measures to bolster our nancial position and make efforts to
generate cash ows:
• Improving operating margins
• Reducing front-loaded working capital, including prompt collection of notes
and accounts receivables and inventory reductions
• Reducing xed costs and improving cost competitiveness through integrated
management of purchasing operations and reductions in purchasing cycle time
• Effective and efcient capital expenditure
During the term under review ended March 31, 2004, we realized a
large expansion in sales prot over the previous term. In the future, we
will make further efforts to increase sales prot while revamping our
management practices to further improve our business performance. We
plan to implement the following measures to meet these goals.
What
we aim
to achieve
13
12 CASIO COMPUTER CO., LTD.