Omron 2010 Annual Report Download - page 20

20
Interview with the President
decided to spin off AEC to leverage the benefits of
autonomous management, resulting in the establish-
ment of Omron Automotive Electronics Co., Ltd., on
May 6, 2010.
——— What was involved in strengthening the mar-
keting capabilities of IAB?
One of IAB’s key strengths is domestic marketing,
through which it sells general-purpose products to
many unspecified users via its distributor sales chan-
nels. However, IAB’s share of the domestic market
for control equipment had decreased over the previ-
ous decade (according to NECA* data), so we asked
distributors to help IAB increase its market share by
5 percentage points over the next four-year period. For
our part, we have promised to launch more competitive
products, provide distributors with comprehensive
support, and enhance the sales structure to make a
sales pitch together. By transferring employees in fis-
cal 2009, we increased the number of staff in IAB’s
domestic sales & marketing division and strengthened
customer contact.
Our survey results show that during fiscal 2009,
when we experienced challenging business condi-
tions, we succeeded in raising our domestic market
share by 1.2 points. We will target a further 1.5-point
rise in fiscal 2010, and get as close as possible to our
target increase of 5 percentage points.
——— What do you mean by IAB’s “competitive
products,” both in Japan and overseas?
When we think of competitiveness, we tend to think
of function, performance, quality, and price. Of course,
price is a vital component, but it’s not everything. It’s
important to use a client’s situation and true needs as
a starting point, and not make a product with specifi-
cations that are too high or start a price-cutting war.
In fact, ensuring proliferation of the Omron brand
among the ultimate end-users (the customers of our
customers) helps bolster competitiveness.
IAB conducts marketing activities in various emerg-
ing countries. These activities indirectly enhance the
product value of customers who export machinery
from Japan to emerging countries. For example, there
are many regions where IAB’s marketing activities
have raised the profile of the Omron brand. In such
regions, when end-users introduce products contain-
ing Omron-brand components, they automatically feel
more assured.
As seen here, competitiveness is not only deter-
mined by superficial elements, such as price and
specifications. It is important that we achieve a bal-
ance with all sorts of added value, including the power
of the Omron brand.
*NECA: Nippon Electric Control Equipment Industries Association
Update on Structural Reforms
Decided on
March 10,
2009
▼
Decided on
July 30,
2009
▼
Decided on
November 26,
2009
▼
Decided on
January 28,
2010
▼
Implemented
during April-May
2010
▼
• Establishment of a new switch
business company
• Management integration of
the relay business
• Establishment of an automotive
electronic components
business company
• Spin-off of
the automotive
electronic
components
business
• Dissolution of large-size backlight businesses (3 sites)
• Closure of the Minakuchi factory in Japan
• Closure of OMRON AUTOMOTIVE ELECTRONICS
UK LTD.
• Closure of OMRON MANUFACTURING OF
AMERICA, INC.
• Establishment of
a new switch
business company
• Management
integration of the
relay business
• Details of the
automotive electronic
components business
company
• Consolidation of production of OMRON
DUALTEC AUTOMOTIVE ELECTRONICS, INC.
(Operations at production sites in Canada consolidated
into production sites in Chicago.)
• Details of the switch
business company
Restructuring of
3 control-based
businesses
Consolidation of
production sites
February 2009 March 2011
Structural Reforms (Revival Stage)