JVC 2002 Annual Report Download - page 6

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ANNUAL REPORT 2 0 0 240
Organizations aren’t changed by management alone. This process can begin only after the entire
workforce is made aware of the issues so that everyone can work together to bring about change. The
first step at JVC was to ascertain employee thinking. With this in mind, I established a taskforce in
November 2001 to identify and discuss with our employees the main cross-functional issues facing JVC:
redefining our corporate culture; restructuring our business portfolio; originating new products; creating
new businesses; implementing marketing reforms; and modifying procurement processes. This taskforce
is helping to bring about a sea change at JVC, transforming mere words into real commitment among
our workforce to enact change. The clearest benefit of this approach is that both the management team
and the employees are now working together to establish a new JVC corporate culture.
SHIFTS IN RETAILING: A NEW OPPORTUNITY FOR JVC
The onus is now on JVC to formulate a clear growth strategy to drive a recovery in earnings. A change
of tack is needed. We are discarding our existing approach of attempting to compete across all product
categories. Instead, we are aiming to capture a greater share of the high-end market with value-added
products that are more resilient to price competition, thereby improving our margins and generating
stronger earnings. I believe the paradigm shift currently underway in the Japanese retailing industry
provides the perfect opportunity for our new approach.
In Japan, one of the main reasons for JVC’s declining earnings is the intense competition driving
down prices. This trend is also affecting the performance of large-scale domestic retailers. Many of these
retailers are facing difficulties as weak consumer demand and falling prices have prevented chain store
expansion programs from meeting sales targets. To avoid insolvency, they are now being forced to merge
with rivals and shift from products that generate low returns to selling high-value-added products.
At JVC, we are seeking to take advantage of this shift by paring back our product lines and channeling
our resources into key products that fully leverage the value of the JVC brand. In fact, we are forging
M ARKET PRESENCE
Over the years, we have built a formidable presence in the
global market. Based on this foundation, we are aiming to
establish a new position in the market as a company known
for consistently creating market-leading products.
See page1 2 for more