Olympus 2006 Annual Report Download - page 13

1.
What is your impression of the rapidly changing digital
camera industr y after your first year as president?
> The change I was most impressed by was the traditional camera
industry’s push into the consumer-electronics industry. I realized
that we were going to confront ever-intensifying competition in
technology development and marketing, as well as product devel-
opment. Amid the severe competition brought about by growing
digital demands of the consumer, we have endeavored to reestab-
lish a business foundation for the creation of sustainable revenues,
and I believe this to be the groundwork for further progress.
2.
Where did you star t this effor t?
> In light of profitability improvements, we reviewed our business
fields that had expanded during the rapid growth era, and we
commenced a policy for the “selection and concentration” of busi-
ness operations. This decision was undertaken in an effort to
concentrate resources on our core competence, which is “Opto-
Digital Technology.” We announced our new business strategies in
November 2005 for the establishment of sustainable profitability,
and with that in mind, we strove to guide our human resources to
meet the sole objective of business recovery.
3.
How far has reform proceeded?
> Given the implementation term of only one year, the achieve-
ment ratio is quite high. This is attributed to our endeavor in the
digital camera business to build a firm relationship with tangible
and intangible assets, namely, our clients and our own human
resources, as we have done over the last 10 years since we com-
menced operations in the industry. In this first year, we placed
the highest priority on establishing a solid groundwork, but when
looking at the medium term, three years for instance, I know that
there are more issues to address.
4.
Specifically, what steps have you taken to implement
reform over the past year?
> Our first approach was the “selection and concentration” of busi-
ness. Returning to our core business, we took measures to rebuild
our foundations as a compact digital camera maker in the global
market. Furthermore, we made every effort to expand the digital
SLR camera business, which will be our core business in the future.
Boasting leading-edge capabilities in optical lens engineering,
we aimed to increase corporate earnings by making sales of lens
barrels a key business.
We also vigorously engaged in the reduction of costs and expen-
ditures in every sector and slashed inventories, while improving
operational efficiency. Inventory control is one of the key factors in
corporate management, because once inventories start piling up,
they impose numerous financial burdens. Eventually high inventory
levels exert a bad influence on the overall business operations,
forming a negative cycle, even as we try to clear them up.
We continue to optimize companywide functions in market-
ing, product development, service, and manufacturing from the
perspective of Platform Reform.
5.
Please tell us more about Platform Reform.
> We promote all-function reform, based on the establishment of a
product platform. We have two visions in this reform: one from
the “product” standpoint and the other from the “business opera-
tion” standpoint. They are based on the same concept in terms
of incorporating our own value creation methods into the system
foundation. On the product front, we are pursuing innovation by
differentiating our technologies, while making full use of common
modules that enhance development and production efficiency.
Meanwhile, on the operations front, we are eliminating complex-
ity in the flow of goods and information, thereby improving our
business operations and IT infrastructure.
15.2 14.8 12.5
48,600
60,280
67,170
Olympus unit share
Source: Camera & Imaging Products Association
Worldwide
04 05 06
Worldwide Digital Camera Market
(Thousands of units)
OLYM PUS 20 06 11