Epson 2013 Annual Report Download - page 30

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5. Issues for Fiscal 2013
Epson began fiscal 2012 under the SE15 Second-Half Mid-Range Business Plan (FY2012-14), a three-year
income growth plan that upheld the basic direction of the strategies outlined in Epson's SE15 Long-Range
Corporate Vision but was predicated on revenue growth. Despite executing the plan, however, Epson found
itself forced to twice revise its financial forecasts downward in the first half of fiscal 2012, largely because
of a persistently difficult business environment.
Given this situation, Epson reviewed and revised the strategies and financial targets set forth in the SE15
Second-Half Mid-Range Business Plan and, in March 2013, established a new three-year plan, the Updated
SE15 Second-Half Mid-Range Business Plan (FY2013-15). We remain firmly committed to the course
charted in SE15 but the tactics and emphasis will change. Under the updated basic policy we will pursue a
basic strategy of managing our businesses so that they create steady profit while avoiding the singleminded
pursuit of revenue growth. Our top priority will be steady income and cash flow. To achieve this in existing
segments, we will readjust our product mixes and adopt new business models. Meanwhile, we will
aggressively develop markets in new segments. Epson will work steadily during the three years of the
updated plan to lay the foundation for a metamorphosis during which Epson will change from being
primarily a company that provides consumer imaging products into a company that once again posts strong
growth by creating and providing new information solutions and equipment for businesses and
professionals, as well as consumers.
The global economic situation remains as unpredictable as ever. While the economies of the U.S. and Japan
are showing signs of picking up, the pace of economic growth in China and other emerging nations is
slowing. Meanwhile, significant uncertainty remains about the future of the European economy in the face
of financial crises and other problems. Society is changing, shifting increasingly toward sustainable
industry and sustainable economic activity. This trend will likely alter the kind of customer value that
Epson will need to provide.
Under this type of business environment, we will remake Epson into a company that once again posts
strong growth. We will achieve this by focusing our management resources on strategic segments where we
can continue to leverage our unique strengths, by expanding our business segments, and by building
stronger new businesses that will carry the future. Ultimately, we aim to achieve 10% ROS and 10% or
better ROE on a sustained basis as early as possible during the mid-range business plan that starts in fiscal
2016, by which time Epson will have established a stable profit structure.
Management Policies and Basic Strategies in Each Business
The names of the business segments were changed as of April 2013, in conjunction with the establishment
of the updated mid-range business plan.
Printing Systems Business
In the printing systems business we will look to create an innovative printing environment by leveraging
inkjet technology. In inkjet printers we will, over the medium term, improve the model mix, realign the
product mix and business model, and boost competitiveness by launching inkjet units that sport a new print
head. At the same time, we will further enhance service and support, including IT solutions. In the business
systems business, we will achieve steady income growth by uncovering new demand while maintaining a
grip on the top share in existing segments.
Visual Communications Business
In the visual communications business we will create new forms of visual communication using
microdisplay technology. In projectors, we will strengthen Epson's position in existing product domains
and in new product domains, such as high-brightness projectors, by enhancing our ability to provide new
solutions and boosting our sales network. This will lead to the growth of new business domains and
profitability improvements. Head-mounted displays (HMD) have the potential to change the way we live
and work. Going forward, we will open up new applications and generate new value by unlocking the
potential of these products as hands-free information tools.