JVC 1999 Annual Report Download - page 7

JVC 1999 5
JVC has positioned itself to take decisive action and
measures necessary to prosper as a global company
amid intensifying competition.
First, headquarters will be streamlined to formulate
and supervise Groupwide strategy for the creation of a
flexible organization. JVC continues to lower overall
costs. Fixed costs will be cut by more than 10% this
term. Through the introduction of full-scale supply chain
management, the Company also aims to maintain appro-
priate inventory levels with reductions of more than 10%
this term and further reductions of inventory during the
next term.
JVC is reviewing and withdrawing from unprofitable
operations. In Japan, we have already closed compo-
nents factories generating low profits. The Company
continues to manufacture high-value-added products in
Japan while disposing and restructuring excess do-
mestic production capacity and expanding overseas
production.
As part of restructuring, we dramatically downsized
the wholly owned subsidiary Largo Entertainment Inc. in
April 1999 by transferring its movie rights acquisition
business to JVC Entertainment, Inc., a wholly owned
subsidiary that specializes in distributing movies to the
Japanese market. In January 1999, we established the
Management Administration Office to strengthen consol-
idated management and increase profitability of the
entire Group. The office is responsible for guiding man-
agement and the early detection of unprofitable busi-
nesses through audits of subsidiaries and affiliated
companies.
To advance consolidated management on a global
scale, JVC is strengthening management at four
overseas regional headquarters. While lowering costs for
deploying Japanese employees overseas, we are foster-
ing regional managers and independent companies with
strong local ties. Increasing awareness in each region,
JVC rapidly promotes the localization of management,
marketing, products, strategy and development. We aim
to create a sound corporate foundation able to weather
exchange rate fluctuations.
JVC is also reviewing domestic marketing, and aims
to increase productivity more than 20% by improving
efficiency in the existing management structure and dra-
matically increasing the efficiency of mass marketing
sales routes.
During the current term, JVC is strengthening product
development and building a solid structure for the 21st
century by withdrawing from fields that are unsuitable for
the digital era. The Company is in position to stop a two-
term slide in profits, and aims to achieve consolidated
net sales of ¥950.0 billion and net income of ¥4.5 billion.
We thank our investors, customers and associates for
their continued support.
Takeo Shuzui
President