Sharp 2011 Annual Report Download - page 9

Propose total solutions
Strengthen B2B business
• Propose total-solution systems
(Hardware/software/maintenance)
• Royalty income by providing know-how
Cost reduction to match the values of emerging countries
Product planning and sales promotion targeting
households with annual incomes of $10,000 level
• Recruitment and promotion of local employees
• Cost reform by carrying out procurement/product
design/manufacturing in emerging countries
Solutions
Expand value chain
Engineering business
Industrialized
countries
Diverse market
Emerging
countries
Households with annual
incomes of $10,000 level
Stand-alone
products
Focus on value of
each product
Sharp’s
conventional
business
domain
7
Annual Report 2011
Interview with the President
Unpredictable and Challenging Japanese Market;
Ongoing Growth in Emerging Countries
In fiscal 2010, the Japanese economy showed some
signs of recovery owing to the government’s econom-
ic stimulus measures and rising demand from emerging
countries. However, due to the impact of the Great East
Japan Earthquake on supply chains in the manufacturing
sector on top of an appreciating yen and a deflationary
trend, as well as fears of increasing prices of materials,
the future direction of the economy remains unclear.
Overseas, however, China and other Asian economies
continued to show strong growth, and markets in North
America and Europe were generally healthy. Going for-
ward, we can expect to see continued strong growth in
emerging countries due largely to the fact that person-
al consumption increases as a result of rising incomes.
Elsewhere, the outlook appears increasingly uncertain.
Factors include the possibility of a downturn in the U.S.
economy, financial unease in Europe, and concerns over
crude oil price hikes stemming from political instability
in the Middle East and North Africa.
Expanding Business Domain; Increasing Sales in
Overseas Markets
No company in the electronics industry can hope to grow
and remain profitable by relying on an existing business
model. Survival demands that we succeed in powerful
competition with foreign companies, adapting to rapid
changes in business infrastructures, such as communi-
cations and networks, and responding to other challenges.
Therefore, Sharp will broaden its business domain. In
our conventional business domain, we focused on indus-
trialized countries and selling stand-alone products. We
need to expand this into a wider domain that includes a
solutions business and emerging countries. In industri-
alized countries, Sharp must extend beyond the business
model centering on stand-alone products to include other
fields. We must put emphasis on becoming a source of
total solutions and strengthening B2B businesses. In
emerging countries, the number of households with
annual incomes of more than $10,000 is climbing rapid-
ly. We will recruit and promote employees within these
countries, while establishing a new cost structure by
stepping up local procurement, product design and man-
ufacturing operations. These are necessary steps to
achieve business expansion in overseas markets.
Market Conditions
What is your view of current market conditions for Sharp? Also, what measures is
Sharp taking in response to those conditions?
Q
Overseas, especially in emerging countries, markets are growing rapidly. Sharp
must strengthen sales in these overseas markets and expand its business domain
to achieve sustainable growth.
A
Expanding Business Domain