Kenwood 2006 Annual Report Download - page 14

The fiscal year ending March 2007 is the mid fiscal year of the
mid-term business plan, “Value Creation Plan,” which started in
the fiscal year ended March 2006, and the Company will
implement the following strategies, including the active
execution of investments in strategic development, in order to
achieve the plan.
The “Zero Net Debt,” one of our goals, has already been
achieved with debt falling to a sufficiently low level, so we
have excluded this goal from our targets as we expect to make
increased investments for future growth.
Improving Competitiveness in Businesses
Improving competitiveness in businesses by
investments in strategic development, and new
organization systems
Responding to technological innovation by
investments in strategic development, and
implementing new product strategies
The Company plans to focus on strategic development of new
technologies and products in the fiscal year ending March 2007,
and make investments in strategic development amounting to JPY4
billion per annum, in addition to research and development activities
that we conduct each year, so that it can swiftly respond to rapid
changes in management environments caused by technological
innovations such as the rising popularity of digital media content
and the progress of digital/network environments, and implement
new product strategies of the next generation by looking at these
changes as major business opportunities.
Such plan mainly consists of strategic development of car
multimedia products, i.e., development of the core of global
navigation system, development and application of mobile
multimedia tuners for ground-wave digital broadcasting, satellite
digital broadcasting, construction of the “Seamless Entertainment
World” for digital media integrating car electronics and home
electronics that the Kenwood Group proposed for the first time at
IFA (an international consumer electronics exhibition) held in Europe
in September 2003, development of a new digital method for
wireless radio equipment, and new consortium activities (joint
development by the Company, Icom Inc. and Trident Microsystems,
Inc.: announced on May 16 in the U.S. before IWCE* (held on May
17, 2006 in the U.S.).
Strengthening the business base under a new
organization system
For rapidly changing consumer electronics, the Company reorga-
nized its Consumer Business Sector, effective April 1, 2006, to form
the “Consumer Business Sector” and “Car Electronics OEM Sector”
in order to activate speedy organization activities, promote the
realization of the “Seamless Entertainment World” for the
strengthening of the business bases of the next generation, expand
the OEM business further, and accelerate the growth strategies
further based on the second mid-term business plan.
The Consumer Business Sector places the Car Electronics
Consumer (Audio) Division, Car Electronics Consumer (Multimedia)
Division and Home Electronics Division under its control, each of
which handles consumer businesses, and seeks to enhance the
competitiveness and growth of these businesses. With regard to the
speaker system business, the Speaker System Division was reorga-
nized to reinforce the structure for contributing to these three
Realizing a Seamless Entertainment World by taking advantage of business opportunities generated by the
rising popularity of digital media content
Management Policy for the Fiscal Year Ending March 2007
Promoting the strategy to expand corporate value based on the second
mid-term business plan, the “Value Creation Plan”
2007.3
* IWCE：International Wireless Communications Exposition, the largest scale exposition of
wireless communication technology held in U.S.
Illustrated progress of the second
mid-term business plan
"Value Creation Plan"
Operating Profit margin
Net Income margin
Net Sales
2001/3
JPY in Billion
2002/3 2003/3 2004/3 2005/3 2006/3 2007/3 Forecast 2008/3 Target
(%)
4
2
6
0
8
-2
-4
-8
-6
-10
250
200
50
150
100
400
350
300
450
0
Historical High Net
Income Updated
Historical High Net Income
the mid-term business plan
"Excellent Kenwood Plan"
the second mid-term business plan
"Value Creation Plan"
Investments in strategic development
Strategic Investments
14