JVC 2005 Annual Report Download - page 16

14 Victor Company of Japan, Limited
The Driving Force behind Leap Ahead 21
The Consumer Electronics segment creates flagship prod-
ucts and generates a substantial portion of the Group’s
sales. The segment’s display and optical disk operations,
which include such products as DVD recorders and play-
ers, have been designated as priority businesses under
Leap Ahead 21. Focusing on these priority businesses and
such core businesses as camcorders, car electronics, and
AV systems, the segment will lead the Company toward
achieving the goals set out in Leap Ahead 21 by securing
growth in revenues and earnings. To this end, we will con-
centrate on select products and work to manufacture a
steady stream of truly unique products that deliver high
definition sound and images.
Substantial Decline in Profits due to Internal Factors
In the fiscal year under review, although the drop in retail
prices greatly exceeded expectations, the weak perform-
ance was also largely a result of internal factors—primarily,
numerous product introduction delays, which rendered us
unable to launch products during peak retail periods. These
delays were attributable to insufficient model-based devel-
opment management. Specifically, we had problems with
new manufacturing processes and core technologies, we
were unable to appropriately allocate resources in response
to an increase in the number of man-hours devoted to soft-
ware development, and we spread our limited resources
too thinly among an overly broad product lineup.
Domestic sales, however, grew 24%, to ¥135.3 billion,
supported by a rise in sales of digital products that out-
paced growth in the domestic audiovisual industry.
Overseas, the July 2004 launch of HD-ILA rear projection
TVs in the United States was a success, and sales of car
These TVs are equipped with
Image Intelligence LSI incorporat-
ing the world’s first 32-bit CPU
dedicated to image processing.
This hard disk camcorder utilizes
a one-inch hard disk drive as a
storage device and incorporates
a newly developed 3-CCD cam-
era system to deliver a high qual-
ity picture.
electronics products were strong; however, sluggish sales
of digital video cameras and the weak performance of
audio products, mainly in Europe, led to a 7% decline in
total overseas sales, to ¥492.0 billion. As a result, seg-
ment revenues and earnings were lower than in the previ-
ous fiscal year.
Eliminating Negative Internal Factors
In fiscal 2006, we will launch products on time during peak
retail periods—learning from the fiscal year under review—
while taking steps to keep pace with shorter and shorter
product life cycles. We will focus our initiatives on achiev-
ing the following three objectives.
Our first objective is to shrink development lead time.
We aim to reduce lead time by one full month, to five
months, by reforming development processes and clearly
stipulating development volumes, time frames, and target
specifications from the initial stage of development. To this
end, we will bolster our framework for variable-volume,
multiproduct production, including product procurement
functions, concentrating efforts on the Yokosuka Plant.
Our second objective is to strengthen our software devel-
opment capabilities. We will add 100 members annually to
our current team of 600 software engineers, outsource soft-
ware assessment and verification to specialists, and
strengthen cooperation with overseas R&D divisions to
accomplish this.
Our third objective is to enhance our products’ added
value. We will fine-tune our product offerings to establish a
focused lineup that is consistent with our goal of becom-
ing a top high-end niche player and concentrate develop-
ment resources on this select product lineup. For instance,
we plan to reduce the total number of camcorder and
DVD recorder models by 20%.
High Definition LCD TVs “Everio”
Hard Disk Camcorder