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Day 5 - IFA International

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  • Pioneer

spotlight on JAPAN

spotlight on JAPAN Region Susumu Kotani Susumu Kotani was appointed President and CEO of Pioneer Corporation in November 2008. Mr. Kotani has held various important posts at the Pioneer Group, including those at car electronics sales and marketing and General Manager of Pioneer’s Home Entertainment Business Group, as well as General Manager of International Business Group and presidents of overseas subsidiaries (including the USA). He has been working with Pioneer Corporation since 1975, having graduated from the Department of Economics of the Meiji Gakuin University the same year. Susumu Kotani President and CEO, Pioneer Back to the Top New growth strategy and new company vision “IFA is much more positioned as an occasion for us to communicate about our technology... not just to Europe, but to the whole world” In April 2012, a major reorganisation was undertaken at Pioneer. IFA International this year again had the chance to have an in-depth face-to-face interview with the company’s President, Susumu Kotani, who is renowned for having “saved” the company three years ago, when he took, amongst other things, the bold decision to cease production of Plasma displays. We asked Kotani-san to explain the latest changes, and how they will help Pioneer on the path to further success... [ Interview by Richard Barnes ] We had very painful restructuring three years ago, when we shut down the plasma business, closed the factory and reduced the size of the company. As a result of this, more than ten thousand people left Pioneer. We established a new organisation then, but the concept at that time was to create a more efficient structure. Two and a half years on, we had tried and tested a lot of new ideas. I realised we needed yet again to change the organisation, because our forecast had been shifting from efficiency to growth. The key of this new company structure is to promote our new growth strategies, so we need new organisational functions and people. We therefore have announced a new growth strategy and a new 2015 company vision. Our goal is now to achieve that 2015 vision. Within this, how will the creation of the Home Electronics Business Management Group help you move forward? The old organisation was seeking efficiencies, but the new organisation is aiming towards growth. So we are shifting some key functions to each business group or division, such as our home audio division or car electronics division. In the past, these divisions did not have sales and marketing or engineering functions, as these were part of a different organisation. But the demerit of this was that it took a long time to make a decision. So this speeding up of management decision-making is one of the concepts of this new organisation. The Home Electronics division now covers not only planning and development of the product, but also the engineering and production functions, as well as sales and marketing. This new organisation is vertical, from conception, through production to marketing, so decisions can be made much faster. It is also interesting to note that among your 20

spotlight on JAPAN changes, you have introduced a Corporate Brand Management Division. What was the goal behind this move? We believe that brand management is very, very important for Pioneer. Firstly, Pioneer is moving into a number of new technologies and products, so brand management will be one of the keys for the success in these areas. The Pioneer brand is already established around the world, and there are many Pioneer fans, but these people are often middle aged or elder people. The brand does not have enough awareness among younger people, so one of our challenges is to introduce our products and increase brand awareness with this group. For this we need a clear brand image of Pioneer for the new demographics. Secondly, we have to work on introducing the brand to the key emerging markets, where partner manufacturers are producing Pioneer branded products - reducing total costs. The Pioneer brand is not yet established in those areas, so to establish a solid brand image, we need the function of controlling brand management all over the world. A separate division also manages intellectual property. Will this division be concentrating on licensing and/or license pooling, or simply protecting patented property? Pioneer has a lot of patents, so taking care of these all over the world is an important function. We are also working on new alliances. Rather than sell licences, we are tying up with new partners using Pioneer’s patents, making new technologies and new products. A good example is in the Organic LED lighting applications. This is a new challenge in which Mitsubishi Chemical is our partner. They are a material supplier, but Pioneer has a lot of patents for Organic LED lighting technology. So together with them, we are developing new lighting applications. “The themes of the 2015 vision are simple: Spread the smiles... Feel the vibes... Share the passion...” In November last year, you announced a new four-point plan for driving forward growth: to grow existing businesses; enter emerging markets and expand business; develop new businesses and promote strategic alliances. How is this plan going? Yes, these are the four key points of our new growth strategy: The first one is to grow existing business. That is the key point, because we are now entering a lot of new areas... but without stable growth in existing car and home electronics businesses, it is almost impossible to challenge in these new areas. So we need to build on current business. We have set new targets this fiscal year in order to deal with new challenges, for example in the car electronics sector, where we have both after-market and OEM businesses. This year, we are trying to increase sales in both segments, while trying to reduce the cost of operations, to make the business more profitable. The second point is that of entering emerging markets. In this sense, we have been developing Joint Ventures in China, and Brazil. The third point is developing new businesses. There are two aspects here. One is the development of new business within our existing sectors of car and home electronics. The second is to establish or nurture completely new business areas. New challenges in existing fields such as in-car technologies include our tieup with DoCoMo, where we are supplying not only all the navigation hardware but also the software. We are also now proposing intuitive communicability and excellent driving experiences through the use of head-up displays. In home electronics, the new area is that of multimedia receivers. We are creating a new musical culture through the fusion of AV and different cultural sectors, with the STEEZ series – a fusion of AV systems and street dance culture, and the fusion of car electronics and DJ culture using MIXTRAX (Eds: software and song analysis technology). We are also entering several other totally new fields such as OLED lighting and even medical and health care related device. Point four concerns the promotion of strategic alliances. Now, the market Region is changing so fast and our competition circumstances have totally changed. Our competitors are not only Japanese electronics companies, but also Chinese, Korean and even from other areas, such as communication companies and content providers. They are our new competitors, and to compete with them, if we try to do everything on our own, we will not keep up with the market. This is why we are developing strategic alliances. Another good example is our strategic alliance with Sharp. Sharp is the Pioneer’s biggest shareholder, and we have established a JV for the manufacturing of optical discs. Pioneer had a lot of patents in this segment, but did not have the volume. Sharp did not have the patents, but the volume. In the past, they had to pay very expensive licence fees when they sold each product, but now we have established a joint venture company, Sharp can use Pioneer’s patents free of charge. This is a win-win model and is very successful. What is your "2015 Vision"? Three years ago, we decided to create a new Pioneer. But you can’t just say, “OK, from today a new Pioneer starts!” I understood that we had to make the direction and strategy clear... So I created a new corporate vision, to unite the employees in one organisation and seek one target. This is why we made such an ambitious longerterm goal. The themes of the 2015 vision are simple: Spread the smiles... Feel the vibes... Share the passion... Pioneer engages you anytime, anywhere. How important is IFA as part of your global marketing strategy? IFA gives us excellent opportunities for European business development. This year, we aim to firmly reestablish Pioneer as an audio brand. In this area, our new network audio products will be making important inroads this year. This is the only occasion we get to present new products on a European scale. IFA is a very, very important occasion for Pioneer when it comes to product or technology development. Traditionally, Christmas time is the best season for sales of home audio products, especially in Germany, but our aim at IFA is much broader than that. We are developing and promoting new business in new categories and so IFA is much more positioned as an occasion for us to communicate about our technology... not just to Europe, but to the whole world. Hall 1.2 Stand 151 Pioneer's new head-up display © Pioneer IFA International • Tuesday 4 th September 2012 21

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