JVC 2003 Annual Report Download - page 20

Victor Company of Japan, Limited
18 Annual Report 2003
The consumer electronics segment derives the majority of its earnings from the development, manufacture and sale of audio
and visual products. Products in this segment account for about 70% of total sales. Overseas markets account for more than
80% of segment sales, reflecting the popularity of JVC products outside Japan. Consumer electronics performed well in fiscal
2003, achieving an operating margin of 3.7% and making a significant contribution to JVC’s return to profitability.
D-VHS High-Definition Digital Video Recorders
The world’s first high-definition video recorder for
the consumer market
Consumer Electronics
DVD Recorders
Superior picture quality and multi-format
recording and playback capabilities
Plasma TVs (PDPs)
Incorporating unique JVC DIST/DET technology to
realize high-resolution picture quality by making
scanning lines almost invisible
Business Segment Overview
Competing Against Time in Multiple
Geographies
An October 2002 reorganization gave
the consumer electronics segment an
operating structure based on product
category, with eight separate manage-
ment units for each product category.
Our previous system had centered on
two business units, each responsible
for a number of audio or video prod-
uct categories. This new system means
we can conduct all development,
manufacturing and sales for each
product within each of these new
units, allowing us to respond to shifts
in market trends much more rapidly
and save time in product development.
Another advantage is managing oper-
ating results in smaller units. As a
semiautonomous profit center, each of
the eight units has its own manage-
ment and operating targets. To save
costs, we have also centralized the
units’ common administrative func-
tions. This gives JVC’s consumer elec-
tronics segment the optimal structure
for allocating resources and executing
strategies. We are now using this
structure to build a more powerful
JVC’s Primary Growth Driver
JVC has prioritized developing prod-
ucts that incorporate higher levels of
added value for some time. The ben-
efits of this strategy began to show
through in fiscal 2003. Large sales
increases were recorded by relatively
new products such as high definition
TVs and plasma display panel (PDP)
TVs. At the same time, well estab-
lished products such as digital video
cameras, car AV equipment and other
audio products, all of which have high
profit margins, turned in a strong per-
formance. This led to operating in-
come in this segment of ¥25.3 billion.
As part of a global program to realign
manufacturing bases over a number of
years, we positioned the Yokosuka
Plant in Japan as the nucleus of all
consumer electronics production, what
we at JVC call the “mother base” of
manufacturing. Its primary mission is
making “Only One” products—items
unique to JVC. As we enact more struc-
tural reforms, we will continue intro-
ducing strategic products that take
JVC to the next phase of growth.
product portfolio, based on the objec-
tive of developing products that rank
among the top three in their respec-
tive categories in all five of JVC’s major
markets: Japan, the US, Europe, Asia
and China.
A Commanding Market Presence
Through “Only One” Products
Two elements are essential for creat-
ing “Only One” products that stand out
in the market. First are core technolo-
gies. Second are supplier partners that
recognize the value embodied in these
products. JVC will actively disclose its
future product line and technology
strategies to form closer ties with nu-
merous partners in a dispersed, spe-
cialized supply chain. As part of
creating “Only One” products, we also
revised our previous strategy of offer-
ing a full model selection in each cat-
egory. Our new approach focuses
resources on carefully chosen products.
Today, camcorders, displays and
DVD decks make up JVC’s core prod-
uct categories. Clear strategies exist for
each. In camcorders, our goal is to be
number one worldwide in Mini-DV.