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O LYMPUS 20 05 7
> Today and Tomorrow
in the Medical Systems
Business, the Life
Science Business, and
the Industrial Systems
Business
first time O lympus has had to reduce personnel, with exception to
those times during the aftermath of the Second W orld W ar.
O lympus is fully aware of the extremely important obligation o f
management to assure stable employment. However, if actio n is no t
taken now, further reductions in personnel may become necessary
in the future. W hile this was a very difficult decision for O lympus to
make, it was unavoidable under the circumstances.
In addition, O lympus aims to reduce costs by ¥10 billion annu-
ally by shortening invento ry turnover by 0.5 months, reducing the
amount of partly finished products and sharing molds. Including the
personnel reductions, we plan to lower costs by a total of ¥13 bil-
lion. W ith contributions fro m the aforementioned new product sales
and cost reductions, we believe a return to profitability is possible
in the second half of fiscal 2006.
O lympus is formulating a management vision that brings forward
medium-term targets for restructuring, including a review of the
Imaging Systems Business portfolio. O ur basic direction is to
emphasize earnings o ver sales or market share. Lessening the
reliance of our earnings structure on endoscopes has been a long-
standing management issue. From this point of view as well, we are
making every effort to achieve a recovery in earnings in the
Imaging Systems Business.
As the earnings foundation of Olympus, the Medical Systems
Business centers o n our gastroenterological endoscopes, which
hold an approximate 70% share of the world market. Every year,
endoscopes are expected to perform greater roles in helping to
improve diagnostic accuracy, minimally invasive treatment, and
patients’ quality of life. The Medical Systems Business attained
growth in sales and profits during fiscal 2005 amid pressures to
slash medical expenses across the medical industry.
From its overwhelming competitive advantage in gastroentero-
logical endoscopes, O lympus believes there is significant room for
business expansion in fields related to endoscopes, such as surgi-
cal products and endo-therapy devices. As a comprehensive sup-
plier o f endoscopes, Olympus is taking an aggressive stance
toward increasing its market share in fields other than gastroen-
terological endoscopes.
W e believe that key measures to increasing our market share are
expanding sales personnel, reinfo rcing the marketing structure,
15 .5 15 .2 1 4.8 13.2
Worldwide Digital Camera Market
(Thousands of units)
48 ,60 0
60 ,28 0
72 ,00 0
28 ,38 0
03 04 05 06 (estimate)
O lympus unit share
Source: Camera & Imaging Pro ducts Associatio n
Worldwide