Sharp 2010 Annual Report Download - page 9

Sharp will have its 100th anniversary in 2012. The two business
visions that we established for this anniversary year represent
Sharp’s core strengths. First is to “Contribute to the world with
environment and health conscious business, focusing on energy-
saving and energy-creating products.” Second is to “Contribute to
ubiquitous society with one-of-a-kind LCDs.” For example, in energy-
saving technologies, in addition to our many technologies centering
on LCDs, we also possess LED technologies. We have been
researching laser diodes, which are technically very close to LEDs,
for 40 years now. Knowledge gained from this research is now part
of our LED operations, too. In the field of energy creation technolo-
gies, we began mass production of solar cells 47 years ago. Today,
no other company has manufactured more solar cells than Sharp. We
established this leading position by preserving a clear competitive
edge in many applications and regions of the world. These kinds of
technological capabilities allow us to create a vertically integrated
business model centered on developing devices with innovative
features. This model has underpinned our ability to create a consis-
tent stream of revolutionary products—another major strength of
ours. One more valuable strength is a corporate culture and work-
force that can continue to create new technologies year after year.
Major structural changes are occurring in the global economy. The
world is moving closer to creating a low-carbon society. The
framework for global decision making is shifting from the G7,
which consists mostly of industrialized countries, to the G20,
which includes emerging countries, too. We are seeing a dramatic
worldwide shift in consumers’ values. Two capabilities will be vital
to success in this environment. One is developing technologies
for saving and creating energy that can support economic growth
while cutting CO2 emissions. The other is becoming more cost
competitive in relation to prices in emerging countries. These
Having ended last year’s losses, Sharp appears to be preparing a business base to start growing again. What strengths
will support Sharp’s growth and what are the issues you need to tackle to achieve this growth?
Please explain your outlook for the business climate and Sharp’s goals for business operations. In particular, how do
you plan to utilize the core strengths you have explained for us, and resolve the two most pressing issues?
Outstanding technical expertise backed by many years of experience is our greatest strength. But I am strongly aware
that our success will require resolving two major issues: making our brand more powerful worldwide and balancing
our business portfolio.
We will target opportunities created by shifts in the global economic frameworks and the values of consumers. Our
goal is to increase profitability by promoting the local production for local consumption business model and optimiz-
ing allocation of management resources.
Sharp’s Strengths and Priority Issues
Goals for Business Operations
On the other hand, increasing our brand power and balancing
our business portfolio are our most pressing issues.
In terms of brand power, in Japan, we have the largest share in
the LCD TV and mobile phone markets. Overseas, we are well
known in China for our LCD TVs and in the ASEAN countries for our
health and environmental equipment businesses. The Sharp brand
is very well established in these regions. Despite these strengths,
in the global LCD TV sector, Korean companies have a very high
market share, while in mobile phones we account for only about
1% of global handset sales. We must therefore continue to raise
the profile of our brand.
In our profit structure, two key issues are that our business
portfolio has become heavily weighted toward LCD related busi-
nesses and that our device production is based mostly in Japan.
The LCD business requires a large amount of capital investments.
Therefore, we must deal with the substantial effect that large
up-front LCD investments have on our cash flows. Also, manufac-
turing most devices in Japan makes us vulnerable to movements
in foreign exchange rates. This is a problem in LCDs as well as
solar cells, which we plan to develop into a core business. One of
our highest priorities will be to determine how to shield our profits
from these kinds of risks.
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capabilities are combined in our corporate vision of making Sharp
an Eco-Positive Company. To achieve this vision, we are changing
to a business structure centered on products for saving and creat-
ing energy that take advantage of the core strengths I explained
earlier. In this respect, I believe that building environmentally-
friendly plants like those in GREEN FRONT SAKAI will be vital to
our success in the future.
No company in the electronics industry can hope to grow and
remain profitable by relying on an existing business model. Sur-
vival demands that we succeed in powerful competition with
Interview with the President
Annual Report 2010 07