Hitachi 2004 Annual Report Download - page 15

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The Hitachi Group aims to develop business in regions around the world as a “truly local company.” We
have stationed full-time regional representatives in Europe, North America and China and have decided to
promote locally led business development that takes into account the special characteristics of each region.
From October through November last year, we staged the “Hitachi Exhibition—China 2004” in Beijing,
Shanghai and Guangzhou. This exhibition was staged to promote understanding of the Hitachi Group’s
innovativeness and collective strengths. In addition, in April 2005, we established Hitachi (China) Research &
Development Corporation as an R&D base for supporting the development of Hitachi Group business in China.
Growing Targeted Fields, Creating New Businesses and
Capturing Group Synergies
Besides aiming for growth in targeted fields, “i.e.HITACHI Plan II ” also incorporates elements that look into the
future. An integral part of the plan is to create and nurture businesses that will support Hitachi’s medium- and
long-term growth.
Mainstay and new businesses that will drive our growth have been designated as “Inspire A Businesses.”
For example, businesses where Hitachi can best leverage its strengths, in an environment where elemental
technologies and markets now cut across several business groups, in particular have been designated as
“Inspire A Businesses.” Hitachi will take whatever steps are necessary to reinforce these businesses to support
their future development. This will include allocating resources and establishing an operating framework that
facilitates collaboration among many businesses in the Hitachi Group. Furthermore, Hitachi is continuing with
measures designed to nurture employees and create new businesses, including the establishment of virtual
venture companies by “corporate senior staff.”
In the storage products business, we aim to be the overall number-one in the global marketplace as a vertically
integrated solutions vendor with two key businesses. One is SAN/NAS storage solutions. Here we command a
leading position in the high-end market. The other is HDDs, where demand is growing for use in digital consumer
electronics and other products, in addition to IT applications. In the biomedical business, we are making up-front
investments in R&D and other areas in fields such as imaging analysis and DNA diagnostics. In automotive systems,
where we aim for high growth globally, we are strengthening business to create Intelligent Transport Systems (ITS).
In the urban planning and development systems business, which centers on elevators and escalators, we intend to
expand our solutions business utilizing IT, energy, security and other wide-ranging Hitachi Group management
resources. In digital consumer electronic products, our strategy is to leverage vertical integration with LCDs, PDPs,
optical disk drives and other core components to make our products more competitive.
R&D is another area we are beefing up. We will reinforce R&D in respect of both frontier research, and
platform research that can be used by the whole Hitachi Group. The former aims to cultivate future mainstay
businesses, while the latter has a more immediate focus of improving productivity and quality as well as
quickening the pace of product development. Hands-on skills and techniques for quality manufacturing will also
be reinforced through the passing down of technology through the WorldSkills Competition and in other ways.
In April 2004, we established the Hitachi Group Headquarters to improve management of the Group. This
internal organization is at the center of our efforts to raise our earnings by capturing synergies using the size of
the Hitachi Group and through other means. We have been successful on several fronts. Project C II, which
was initiated to improve the efficiency of working capital, has been instrumental in reducing the number of days
it takes to turn over inventory and accounts receivable from 79.3 days at March 31, 2003 to 74.4 days at
March 31, 2005. Meanwhile, Project D, launched to reduce procurement costs, yielded year-on-year savings of
¥300.0 billion in fiscal 2004.
11Hitachi, Ltd. Annual Report 2005