Epson Unveils Mid Range Business Plan
Epson has announced its updated second-half business plan, which follows on from the first-half business plan that ran three years from fiscal 2009.
In the preceding plan, Epson pursued the strategies in its SE15 Corporate Vision and restructured its devices, precision products and business portfolios, which led to income rebounding in fiscal 2009 and 2010.
On the other hand, the company missed its initial income target for fiscal 2011, with the earthquake and tsunami in Japan contributing to the issue.
Following this, Epson assembled a selection of competitive information-related equipment products in line with its growth strategy, which underpinned the company's second-half plan that started in fiscal 2012.
This plan featured the same basic strategic direction but was an income growth plan that was predicated on net sales growth.
Despite this, the business environment in fiscal 2012 was more severe than anticipated, resulting in Epson downwardly revising its forecast. Epson claimed that it needed to review the strategy and business targets shown in its mid-range business plan.
Consequently, the business decided to re-adjust its product mix and adopt new business models in the existing segments in the three years of the Updated Mid-Range Business Plan.
Epson is aiming to aggressively develop markets in these segments, with the company set to transform from one focused on printing and projection in the consumer market to one with eyes on information tools and equipment for businesses and professionals and the general public.
It is hoping to make its updated mid-range business plan as a way to lay the foundation for the transformation, enabling it to work towards its goals in the market.
"Epson's basic policy under the updated mid-range business plan is to manage its businesses to ensure it creates steady profit and avoids the single-minded pursuit of revenue growth. Under this policy, management is determined that the company's results will bottom out in fiscal 2012, and will prioritize the generation of steady profits going forward," the company stated.
As well as focusing on strengthening the company's financial structure, Epson will aim to maintain its fixed costs at their current level and boost its variable cost ratio in an effort to improve profitability.
The printer specialist has also issued new sales targets as part of the plans.
"Epson is looking to increase net sales by 20 billion yen a year and operating income by 10 billion. While our previous plan was predicated on strong net sales growth, we are now focusing on the generation of steady profits by reconstructing existing business segments and developing new business segments," the company announced.
Epson is aiming to boost the competitiveness of its inkjet printers by reducing their size, while accelerating the deployment of office inkjet printers and expanding its commercial printer segment.
"Inkjet printer growth will be flat over the next three years, with growing sales in emerging economies expected to be offset by reduced unit sales in developed economies. In the medium term, we will concentrate on improving the model mix and realigning our business model.
"In fiscal 2012, we completed the capital investment aimed at establishing volume production of our new piezo print head. We plan to improve competitiveness by launching printers with the new print head in fiscal 2013," the company stated.
Furthermore, Epson is aiming to be number one in all of its projector segments and create new value for HMDs as information tools.
"Although the projector market will not expand at the rate we had previously expected, we still forecast growth based on expanding demand in emerging economies.
"Against this background, we will strengthen our position in existing product domains and in high-brightness projectors by presenting new solutions and boosting our sales network," Epson explained.
Posted by Barry Ashmore.