Nikon 2005 Annual Report Download - page 18

instruments
review of
operations
Solid growth in sales and operating income
In biological microscopes, Nikon introduced the
ECLIPSE 90i as an advanced research instrument
with outstanding digital imaging capabilities and
system scalability. Sales of microscopes also grew
in the year ended March 2005 due to the promo-
tion of digital cameras and other accessory items.
Although sales were stagnant in Japan and the
United States, Asian markets generated compen-
sating growth. In industrial microscopes, Nikon
posted growth due to the launch of the ECLIPSE
L300/L300D models for 300mm wafer inspec-
tion, combined with higher sales in Asian mar-
kets. Overall, sales expanded 8.7% year-on-year
to ¥52,184 million, while operating income rose
5.3% to ¥2,826 million.
Trademark Nikon creativity to drive
establishment of new market segments
Nikon recognizes that simply extending the exist-
ing lineup of biological and industrial microscopes
is insuffi cient to expand the total scale of opera-
tions. The fi eld of biological microscopes reliably
delivers stable if non-explosive growth due to a
customer base composed of universities, hospitals
and research institutions. The industrial micro-
scopes business is by its nature more cyclical, since
demand is linked to production levels of semicon-
ductors and electronic components. This earn-
ings structure means that Nikon must create new
market segments in order to boost growth. Nikon
is investing heavily to create the necessary techno-
logical breakthroughs with the aim of applying core
technical skills in microscopes to new fi elds. Nikon
is confi dent that its trademark creativity can spark
the development of entirely new markets, thereby
enhancing growth.
Reforms to corporate culture and
organization
The primary challenge in creating products for
entirely new markets is one of changing the
internal ethos of the Instruments Company. This
involves a major change in mindset toward a mar-
ket-oriented, global focus with speedy decision-
making and action, in which the customer rather
than Nikon sets the pace of product development.
With this goal in mind, Nikon implemented major
organizational reforms in June 2005. The new sys-
tem eliminates previous functional divisions sepa-
rating sales, design and production teams, replac-
ing them with a more market-oriented structure
with vertically linked teams focused on different
market segments. The revised organizational struc-
ture divides the Instruments Company broadly into
biosciences and industrial instruments. Authority
is delegated extensively to product development
teams in each half. Nikon hopes that this new sys-
tem will promote a more open exchange of views
worldwide and foster greater creativity.
Bioscience offers huge potential
Governments worldwide are investing in the biosci-
ences, which makes it a fi eld with unique poten-
tial. However, although biological microscopes are
expected to deliver stable growth going forward,
this is insuffi cient to generate signifi cant gains.
Nikon is working to develop new markets by focus-
ing on the general theme of the observation and
measurement of living cells. Linked to this core idea
is some emerging areas with signifi cant potential,
such as cell culture and regenerative medicine.
Nikon also aims to combine original digital technol-
ogies with bio-application software to expand cur-
rent markets. For instance, there is the possibility of
“The main objective is to boost earnings power
through greater scale so that we can contribute to
higher Nikon Group growth.”
Hidetoshi Mori
Director, Member of the Board & Executive Offi cer
President of Instruments Company
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