Omron 2005 Annual Report Download - page 36

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INTELLECTUAL PROPERTY STRATEGY
Intellectual property is one of Omron’s most important manage-
ment resources. It determines our growth potential, profitability,
and sustainability.
year, the overall trend for our R&D expenses ratio has
remained steady at an annual rate of around 8%. Despite
the effects of annual fluctuations in the business environ-
ment, we believe that increasing our medium to long-term
corporate value results in extending merits to our share-
holders, investors, and all other stakeholders. Among these
expenses, the ratio of investment in basic technology
development to investment in product business develop-
ment in fiscal 2004 was about one to five. Looking at the
trends of these two portions of expenses, investment in
basic technology development has remained stable, while
the ratio of investment in product development has contin-
ually increased over the past three years.
2) Personnel involved in R&D
We believe that R&D greatly contributes to maximizing cor-
porate value. In that regard, we look to further motivate our
R&D personnel in ways that include abolishing ceilings on
compensatory payments and recognizing not only domes-
tic but also overseas sales results. We are also placing
efforts on cultivating personnel who can make business
contributions. For example, for employees who possess
extremely high levels of professional expertise in areas
such as electrical engineering, molding technology, and
license negotiation, we will commence the operation of a
specialist manager system that offers them company-wide
career opportunities.
THE SIGNIFICANCE OF INTELLECTUAL PROPERTY FOR
OMRON’S MANAGEMENT
At Omron, we have set maximizing corporate value as the
goal of GD2010. In keeping with this goal, we are seeking
first to double by 2007 the total business value achieved in
FY 2003, based on the present value (PV) of cash flows
anticipated from the Group’s various business domains.
For this purpose, operating with a balance between
increasing top line growth potential and improving prof-
itability will be essential.
We believe that the core technologies Omron has devel-
oped through the years, along with the intellectual property
that supports them, will be the greatest driving force behind
this simultaneous realization of growth potential and prof-
itability. Strengthening our position in highly unique
technologies or intellectual property (IP) that our competitors
cannot easily duplicate, with the backing of strong patents
and high-caliber expertise, will create a synergistic effect and
contribute to the realization of these elements.
Strategic utilization of intellectual property enables
profitable growth. We therefore regard it as one of our
most important management resources.
R&D SYSTEM AND ORGANIZATION FOR ENHANCING
INTELLECTUAL PROPERTY
1) Investment in R&D
While there have been fluctuations depending on the fiscal
Maximizing corporate value by strengthening and
leveraging our intellectual property portfolio
Creation of highly original core technologies
Doubling of total business value over FY2003
Increased growth potential and elevated profitability
Strengthened intellectual property portfolio
GD2010
Long-term maximization of corporate value
Intellectual property: developing a strategy
and business growth scenario
Foundation of
Intellectual
Property Strategy
Strengthening and Leveraging
our Intellectual Property Portfolio
Patents, know-how, copyrights, trademarks, etc.
Group
Structure
Shared Growth
Strategy
Management/
Business Strategy
Original technologies =
maximization of corporate
value by the power of
intellectual property
Technology
Strategy
Strengthening our
technical edge through
the creation of core
technologies
Intellectual
Property Strategy
Development of
strong intellectual
property and
mitigation of risk
Expansion of business
Development of
core technologies
Overall management
Management Planning Office
/Intellectual Property Dept.
Intellectual property group
for each segment
Technology headquarters