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[OM] Translation: Olympus' Successful Digital Camera Business

Subject: [OM] Translation: Olympus' Successful Digital Camera Business
From: Tomoko Yamamoto <tomokoy@xxxxxxxxx>
Date: Thu, 29 Jan 1998 00:11:43 -0800
Here is my translation of the summary of an article in Nikkei Business.

The Reason for Olympus' Lead in the Digital Camera Market

Olympus continues to lead in the consumer-oriented digital camera market
where the field is crowded by about 30 makers of camera, home electronics,
and PCs.  According to Olympus, they have been holding the top position in
the number of digicams sold in the major retail stores in Tokyo since
August, 1997.

The first reason for the good news is that their marketing strategy of
focusing on the high-quality digital cameras hit the target correctly.
With the digital cameras, the clarity of picture quality is determined by
the number of pixels in the light sensor callled CCD.  Until a few years
ago the number of pixels in most of the digital cameras was about 3 million
pixels.  This number is sufficient for display on TV and computer monitors.
 However, Olympus predicted from their marketing suvey of digicam consumers
that "The consumer wants to print out a picture in addition to displaying
the picture on the screen."  When the picture is printed, difference in the
numbers of pixels becomes obvious.  Thus, in October, 1995 they formulated
a product development plan that Olympus is going to sell a product with 8
million pixels in one year, and a more than 10 million pixel camera in two
years and decided on entering the general consumer market for digital cameras.

The question was whether Olympus would be able to develop such a product
according to the schedule of the development plan because the company has
been known to have a character that they are so super cautious  that they
would tap a stone bridge so many times to the extent of knocking down the
bridge. (There is an expression in Japanese,"Ishibashi wo tataite wataru"
meaning "to tap a stone bridge before crossing it") In order to accomplish
their digital camera goals, they changed  the existing method of product
development.  The technical staff involved in the development switched
their focus on the perfection of a product to the sense of urgency to
develop the product so that they meet the deadline which is the time to put
the product on the market.  Their success in this new digital camera
venture is due to making the speed of development as most important.

For Olympus the successful new venture had been their earnest wish.  The
company has had a diversity of products from cameras to microscopes to
endoscopes to blood analyzers.   However, on the profit side the company
has had to rely heavily on the endoscope business and they needed to
establish new areas of profitable  business.  On the other hand, the
earnings from the endoscope business have been too good to the extent that
their sense of having to make profit in new ventures has been weakened.  As
a result even though they have tried new areas of business in the past,
they never succeeded.

However, the management had a strong sense of crisis when they faced with
the declining profit which had peaked in March, 1993.  The new president,
Mr. Seiju Kishimoto who took his post in June, 1993, emphasized reform and
challenge and asked the division heads to increase the speed of product
development and efficiencies.  However, each business division has a
different environment to compete and  different sets of problems to solve.
Thus the new president greatly expanded the authority of  the division
heads.  The division heads were able to start their reform by
reorganization of subdivisions and setting up of various tasks based on
their own ideas.

The revenue of this past period for Olympus has exceeded the previous
highest amount.  In addition to the success of the new digital camera
business, it appears that Olympus is regaining the growth of the existing
businesses of cameras and endoscopes which have experienced a hard time in
increasing profit. It seems that the results of various reforms in each
division are responsible for the good news. 



Tomoko Yamamoto
Photographer, Composer, Soprano
mailto:tomokoy@xxxxxxxxx
http://www.charm.net/~tomokoy/
-All the photos (except panorama) with OM's-
http://ep.com/ep/csp.html?csp=1130
-Olympus Equipment Classifieds-

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