Yamaha 2008 Annual Report Download - page 7

05Annual Report 2008
Question 2:
Prospects for achieving the financial targets in “YGP2010” depend on smooth progress of
“The Sound Company” growth strategy. Could you provide a brief overview of the growth
strategy and progress with its implementation?
When formulating “YGP2010,” we considered the business envi-
ronment Yamaha would face during the coming three to five years.
From that standpoint, I believe the key to achieving our targets
is to grow by nurturing businesses in “The Sound Company”
business domain, which is founded on sound, music and network
technologies. That is why this business domain is now focusing
on the development of appealing products that leverage Yamaha’s
strengths, whether they are for end-users or for businesses. At the
same time, we are putting in place an optimal production structure,
and conducting marketing activities in ways that put the market’s
perspective first.
Specifically, we are developing a new concept in pianos that
transcends the conventional acoustic/digital categorization, and
we plan to make the customer’s perspective central in efforts to
enhance our product range. In the guitar business, we are upgrad-
ing product quality and working to expand sales of electric acous-
tic guitars leveraging Yamaha’s strengths, with a focus on
North America, the largest guitar market in the world. We are also
taking action in manufacturing by further strengthening our musical
instrument manufacturing bases. This entails establishing optimal
production networks to clearly define the respective roles of plants
in Japan, China and Indonesia—the most important production
bases for acoustic musical instruments—with regard to high-value-
added products and affordable-price-range products. In the music
entertainment business, we will finish developing the necessary
infrastructure under Yamaha Music Entertainment Holdings, Inc., a
management company established last year, and make 2008 the
first year of business expansion for related companies.
Emerging markets
· China
· Russia
Music &
Musical
Instruments
Market measures
Piano business (Total Piano Strategy)
Commenced new product development
Prepared for introduction of new marketing policy
Guitar business
Improved product quality and reinforced supply capability (China and Indonesia)
Music entertainment business
Realigned six companies to create Yamaha Music Entertainment Holdings, Inc.
Commercial audio equipment business
Accelerated growth through collaboration
Launched OEM amplifiers for NEXO
Decided on merger of commercial audio equipment
engineering subsidiaries in Japan
AV equipment business
Expanded sales of the Digital Sound Projector
Sound
Networks
Audio
Upgraded capability to pursue M&A/alliances
Acquired Bösendorfer
Enhance acoustic
instrument
manufacturing plants
Increased number of
music schools in China
Established local
subsidiary in Russia
Established local
subsidiary in India
Increased production
in China and Indonesia
Proceeded with integration
of domestic piano
manufacturing plants
Conferencing systems business
Sales channel development delayed
Semiconductor business (new device development)
Achieved growth in sales of graphics LSIs and digital amplifiers
Silicon microphone development delayed
Active investment of management resources
(strategic M&A/alliances, etc.)
Progress of Growth Strategy in “The Sound Company” Business Domain
In commercial audio equipment, business conditions are con-
tinuing to work in our favor, and we are pursuing strategic alliances
to supplement our mixers—a product line in which we excel—by
enhancing the lineup of amplifiers, speakers and other “output-side”
products. At the same time, we are stepping up the pace of our
development as a systems solutions provider that provides services
to meet a wide range of customer needs, including installation and
maintenance. The commercial audio equipment market is expected
to expand in emerging markets such as China, Russia, India and
Brazil as well as in Europe and North America, and we have high
hopes that growth in this sector could even exceed that of musical
instruments. In the AV equipment business, meanwhile, our plans
are to enter new business domains such as desktop audio systems
to complement our mainstay home theater AV receivers, front
surround systems, and HiFi audio products.
Despite these promising developments, however, issues
remain that must be addressed. In the semiconductor business,
existing demand for mobile phone LSI sound chips is expected
to decrease, while demand for silicon microphones, primarily for
use in mobile phones, should increase. However, development
of these products has taken longer than expected, resulting in
delays to market introduction. In addition, our efforts to launch
new conferencing systems leveraging Yamaha’s sound and
network technologies to deliver smooth, high-quality sound were
hampered by delays in developing the relevant sales channels.
As we enter an era in which achieving product differentiation
is more difficult than ever, we continue striving to develop
appealing products with the unique Yamaha identity.