Nikon 2013 Annual Report Download - page 10

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8
challenge is how to expand sales in the fast-growing
emerging markets.
It is clear that in each business there are many
factors conducive to growth, and our main challenge
is whether we are able to fully capture these growth
opportunities.
Nikon’s Medium Term Management Plan,
announced in May 2013, identifies three
priority tasks to strengthen existing businesses.
Please summarize what this entails.
The three priority tasks—reducing costs, bolstering
supply-chain management and launching differentiated
products—are similar to measures on which we have
focused previously. Our existing businesses retain
growth potential which, if reinforced, will enable the
businesses to generate cash that can be invested in
new businesses.
To improve profitability, it is essential that we
reduce costs. We are pursuing this objective by
establishing a product development platform,
enhancing productivity and reforming our
procurement system.
Our efforts to bolster supply chain management
include speeding up all processes, from component
procurement to development, production and
logistics. We are also striving to eliminate operational
inefficiencies, so as to create a resilient operating
structure. Thus, although in the Precision Equipment
Company we have halved the production lead time—
from twelve to six months—we are pursuing a further
reduction so that we may be even more flexible in
responding to demand trends.
To improve earnings, we must not only reduce
costs, but also increase the appeal of our products,
and the degree to which they are differentiated. We
are less likely to succeed in developing differentiated
products, if we only improve the functions and
performance of existing equipment. I want Nikon to
develop products based on new concepts that raise
the bar considerably.
We have grappled with these challenges for almost
10 years, yet I want the entire Group to again push
forward with renewed vigor.
Major Challenges (Fiscal years ending March 2014 to 2016)
1. Strengthening of existing businesses
•Cost reductions •Better supply chain management (SCM) •Product differentiation
2. Promotion of new business development